Commitment Letter Between Raser Technologies, Inc. and Merrill Lynch for Geothermal Project Financing

EXHIBIT 10.1

Execution Copy

CONFIDENTIAL INFORMATION CONTAINED IN THIS EXHIBIT HAS BEEN OMITTED FROM PUBLIC FILING PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE U.S. SECURITIES AND EXCHANGE COMMISSION. THE OMITTED INFORMATION OF THIS EXHIBIT AND HAS BEEN IDENTIFIED WITH THE SYMBOL "***," HAS BEEN FILED SEPARATELY WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION.

January 16, 2008

For the attention of:

Mr. Brent Cook, CEO

Mr. Marty Petersen, CFO

Raser Technologies, Inc.

5152 North Edgewood Drive

Provo, Utah 84604

Dear Messrs Cook and Petersen:

Effective as of the date noted above (the "Effective Date"), this letter (together with the Annexes hereto, the "Commitment Letter"): (1) sets forth the terms and conditions upon which the parties have agreed that Merrill Lynch, Pierce, Fenner & Smith Incorporated or one or more affiliates of Merrill Lynch & Co., Inc. (collectively, "Merrill Lynch") has the right to finance the development of certain geothermal projects by Raser Technologies, Inc. ("Raser") or its affiliates (the "Geothermal Program"); and (2) constitutes a commitment by Merrill Lynch (the "Truckee Commitment") subject to the satisfaction of the conditions precedent set forth in Paragraph 3 hereof, to provide, or arrange the provision of (a) up to $44.0 million for the debt financing, comprised of approximately $38.4 million in senior secured financing (the "Senior Secured Financing") and an approx imately $5.4 million letter of credit in favor of Pacific Gas and Electric Company (the "Letter of Credit Financing") and (b) $157,641 for the tax equity transaction, to be effected by Merrill Lynch's acquisition of Class A Units in Truckee Geothermal No. 1 SV-01, LLC, a Delaware limited liability company, or other special purpose Delaware limited liability company indirectly wholly owned by Raser ("Truckee"), for the construction, by and through Truckee, of a 10.5 MW net nameplate capacity geothermal energy project in Nye County, Nevada (the "Project") (such tax equity transaction, the "Tax Equity Transaction" and together with the Senior Secured Financing and the Letter of Credit Financing, the "Truckee Transaction"). An index of defined terms is attached hereto as Annex 1. The terms of the Truckee Transaction are set forth in this Commitment Letter and in the Transaction Overview attached hereto as Annex 2 (the "Transaction Overview"). Raser agrees to, and to cause its affiliates to, assist and cooperate with Merrill Lynch, as and when reasonably requested by Merrill Lynch after closing of the Truckee Transaction, to obtain a Standard & Poors and/or Moody's rating of the Senior Secured Financing, should Merrill Lynch decide to apply for such a rating.

1. Financing of Geothermal Development Program

1. Right to Finance and Right of First Refusal.

1. Geothermal Projects Subject to the Right to Finance and the Right of First Refusal. During the next 48 months, Raser or its affiliates intend to develop and/or own, in whole or part, geothermal energy projects with an aggregate net nameplate capacity of at least 155 MWs, each of which project is expected to be owned by a separate, single purpose project company. Pursuant to the terms of this Commitment Letter, Raser hereby grants to Merrill Lynch: (A) the exclusive right to provide, or arrange for the provision of, all Project Financings for the first 100 MWs of such geothermal projects, other than Class I Excluded Financings and Class II Excluded Financings (such right to provide or arrange referred to as the "Right to Finance" and such projects, which shall include the Project, referred to as the "RF Projects"), and (B) a right of first refusal to provide, or arrange for the provision of, all Project Financings for the next 55 MWs of suc h geothermal projects, other than Class I Excluded Financings and Class II Excluded Financings (such right of first refusal referred to as the "ROFR" and such projects referred to as the "ROFR Projects"). The RF Projects and the ROFR Projects, collectively are referred to herein as the "Geothermal Project(s)." The term "Project Financing" means a construction, revolving, working capital, term or other debt financing, tax equity structured arrangement (including the sale of membership interests to tax equity investors and other transactions involving tax structuring for a geothermal project and/or preferred or other structured financing for a geothermal project, in each case regardless of how the project financing is structured and including any such financing being consummated within the context of a broader transaction (such as an acquisition, joint venture, partnership or other arrangement); provided that the term "Project Fi nancing," when used herein without qualification, is not limited to financings provided or arranged by Merrill Lynch or those subject to the Right to Finance or ROFR.
2. Financing of Similar Projects. Subject to the terms and conditions set forth herein, Merrill Lynch will provide, or arrange for the provision of, a Financing Commitment for the Project Financings of the RF Projects that are substantially similar to the Project ("Similar Projects"). The terms and conditions of any such Financing Commitment by Merrill Lynch for Similar Projects will be substantially similar to those applicable to the Truckee Transaction, adjusted to account for (A) changes in United States financial, banking or capital markets since the Effective Date, (B) changes to the business, condition (financial or otherwise), operations, performance, assets or prospects of Raser and its affiliates since the Effective Date, (C) the status and performance of other geothermal projects constructed, owned, operated or managed by Raser in whole or in part, (D) accounting, legal and regulatory matters ass ociated with the RF Project contemplated to be financed, and (E) operational and credit characteristics of the RF Project contemplated to be financed, including, without limitation, the background, experience, creditworthiness, performance history and other characteristics of such RF Project's counterparties. The term "Financing Commitment" means a written commitment (whether or not issued by Merrill Lynch) to provide or arrange a Project Financing for a geothermal project, it being understood that such commitment may include provisions permitting syndication of all or a portion of such Project Financing.
3. ROFR Project Procedures. Raser agrees that: (A) in connection with soliciting a Financing Commitment for a ROFR Project from any third party (a "Third Party ROFR Financing Commitment"), it shall notify the third party of Merrill Lynch's ROFR for the ROFR Project; and (B) before Raser is authorized to accept a Third Party ROFR Financing Commitment, (1) Raser shall have provided Merrill Lynch with a copy of the Third Party ROFR Financing Commitment and all other terms and conditions related thereto (the "Competing Offer") and a written offer by Raser to enter into a Financing Commitment with Merrill Lynch on the same terms and conditions set forth in the Competing Offer (the "Offer to Match"), (2) Raser shall have complied with its due diligence obligations under Paragraph 1(j) hereof during the twenty (20) Business Day period after Merrill Lynch's receipt of the Competing Offer and Offer to Match (the "ROFR Match Period"), and (3) Merrill Lynch shall not have accepted the Offer to Match within the ROFR Match Period, or, if Merrill Lynch has accepted the Offer to Match, the matching Financing Commitment issued by Merrill Lynch relating to such ROFR Project shall have expired or terminated without closing or funding for reasons other than a breach or default by Raser or its affiliates thereof or the failure of Raser or it affiliates to satisfy a condition precedent to closing or funding. Upon satisfaction of the foregoing conditions with respect to a ROFR Project, the MWs thereafter subject to the ROFR shall be reduced by the MWs associated with such ROFR Project (the "ROFR Reduction"). For the avoidance of doubt, if any matching Financing Commitment entered into by Raser or its affiliates on one hand, and Merrill Lynch on the other hand, in respect of a ROFR Project expires or terminates without closing and funding due to a breach or default by Raser or its affiliates thereof or the failure of Raser or its affiliates to satisfy a condition precedent to the closing or initial funding thereof, such event shall not reduce the MWs subject to the ROFR.

2. Conditions to Financing Commitments by Merrill Lynch. Raser agrees that any Financing Commitment provided by Merrill Lynch in connection with a Geothermal Project (other than the Project) shall be subject to substantially the same conditions set forth in Paragraph 3 hereof as applicable to such Geothermal Project.
3. Geothermal Projects Structuring Fee. In connection with and out of proceeds on the date of each Merrill Closing, other than with respect to the Project, the applicable borrower shall pay in full to Merrill Lynch the non-refundable structuring fee as set forth in Annex 5. The term "Merrill Closing" means the closing and initial funding of the Project Financing of a Geothermal Project, which Project Financing was provided by or arranged by Merrill Lynch, as the sole or lead arranger.
4. Excluded Financings.

(i) The parties agree that any Class I Excluded Financing is excluded from the Right to Finance and the ROFR. A "Class I Excluded Financing" means any of the following:

(A) a Project Financing of a Class I Excluded Project if and to the extent that such Project Financing is effected pursuant to a Financing Commitment entered into before Raser and/or its affiliates execute any binding agreement for the acquisition of such Class I Excluded Project;

(B) a Project Financing of a geothermal project in which (1) Raser and/or its affiliates do not directly or indirectly hold (a) a majority of any class of equity securities of such geothermal project, (b) a majority of the economic benefit through the ownership of any class of equity securities in and through the receipt of fees and other amounts for licenses, leases, and advisory, consulting, engineering, management, development, construction or other services to the geothermal project or (c) control over such geothermal project, or (2) Raser and/or its affiliates do not directly or indirectly lease all or substantially all of the property, equipment or other assets to such geothermal project;

(C) a financing for the (1) pre-construction acquisition of property, equipment or other assets comprising less than substantially all of the assets of a geothermal project or (2) initial drilling, wellfield development and other pre-construction activities for a geothermal project (any matters in subclauses (1) and (2), a "Pre-Construction Financing"); or

(D) a financing permitted to be obtained by a project company under the terms contained in the definitive debt financing documentation for a Project Financing for such project company.

For purposes hereof, a "Class I Excluded Project" means a project all or substantially all of the assets and properties or equity interests of which are acquired by Raser and/or its affiliates after the Effective Date from a third party or group of affiliated third parties that are not affiliates of Raser or its affiliates.

(ii) The parties agree that the Project Financings of the projects listed on Annex 4 are excluded from the Right to Finance and the ROFR and constitute "Class II Excluded Financings" that are subject to the limitations contained in this Paragraph 1(d)(ii). Subject to applicable confidentiality restrictions relating to the Class II Excluded Financings, Raser shall deliver a copy of each Financing Commitment and all other terms and conditions associated with any such Class II Excluded Financing to Merrill Lynch not less than five (5) Business Days before Raser's acceptance thereof. Raser may engage in Class II Excluded Financings subject to the following limitations:

1. After (1) Raser and its affiliates have entered into Financing Commitments with Merrill Lynch for 20 MWs or more of collective net nameplate capacity of RF Projects and (2) either the Project Financings thereunder have closed or Raser and its affiliates have made (or are making) good faith attempts to satisfy the terms and conditions (including closing conditions within Raser's or its affiliates' control) of all Financing Commitments then in place with Merrill Lynch, Raser may engage in Class II Excluded Financings of up to, but not more than, 35 MWs of collective net nameplate capacity;
2. After (1) Raser and its affiliates have entered into Financing Commitments with Merrill Lynch for 50 MWs or more of collective net nameplate capacity of RF Projects and (2) either the Project Financings thereunder have closed or Raser and its affiliates have made (or are making) good faith attempts to satisfy the terms and conditions (including closing conditions within Raser's or its affiliates' control) of all Financing Commitments then in place with Merrill Lynch, Raser may engage in Class II Excluded Financings of up to, but not more than, 65 MWs of collective net nameplate capacity;
3. After (1) Raser and its affiliates have entered into Financing Commitments with Merrill Lynch for 80 MWs or more of collective net nameplate capacity of RF Projects and (2) either the Project Financings thereunder have closed or Raser and its affiliates have made (or are making) good faith attempts to satisfy the terms and conditions (including closing conditions within Raser's or its affiliates' control) of all Financing Commitments then in place with Merrill Lynch, Raser may engage in Class II Excluded Financings of up to, but not more than, 95 MWs of collective net nameplate capacity; and
4. After (1) Raser and its affiliates have entered into Financing Commitments with Merrill Lynch for 100 MWs or more of collective net nameplate capacity of RF Projects and (2) either the Project Financings thereunder have closed or Raser and its affiliates have made (or are making) good faith attempts to satisfy the terms and conditions (including closing conditions within Raser's or its affiliates' control) of all Financing Commitments then in place with Merrill Lynch, Raser may engage in Class II Excluded Financings without limitation.

In addition, solely for purposes of Paragraphs 1(d)(ii)(A) through (D), (x) any RF Project that is the subject of a Similar Project Pass shall be deemed to be included among Financing Commitments with Merrill Lynch as to which the related Project Financings have closed and (y) the applicable MW thresholds for which such Financing Commitments are required to be issued prior to Raser or its affiliates engaging in Class II Excluded Financings pursuant to Paragraphs 1(d)(ii)(A) through (D) shall be reduced by the aggregate amount of all GP Reductions.

5. No Shop Covenant. Raser agrees that until this Commitment Letter terminates pursuant to Paragraph 11, so long as the Remaining Geothermal Capacity is greater than zero, it shall not, and shall cause its affiliates not to, directly or indirectly, discuss, solicit, respond to solicitations, provide any information relating to, negotiate, facilitate or enter into any commitment for any Project Financing of an RF Project by or with a third party (the "No Shop Covenant"), except as expressly permitted in Paragraphs 1(f) and (g). For the avoidance of doubt, the No Shop Covenant shall not apply to Class I Excluded Financings, Class II Excluded Financings or ROFR Projects.
6. Mechanics for RF Projects; Pursuit of Alternative Financing Transactions. As to each RF Project for which Raser seeks Project Financing, the following terms and procedures shall apply:

1. Commitment Notice. Raser shall provide Merrill Lynch with written notice, which shall include the final or substantially final versions of all material project documentation for such RF Project (a "Commitment Notice"), and an opportunity during the Commitment Period (as defined below) to submit a Financing Commitment with respect to the applicable RF Project;
2. Commitment Process. Merrill Lynch shall either: (A) provide Raser with a Financing Commitment for the RF Project specified in the Commitment Notice within (I) ten (10) Business Days in the case of a Similar Project or (II) fifteen (15) Business Days in the case of all other RF Projects (such 10-day or 15-day period, as the case may be, the "Commitment Period") after Merrill Lynch's receipt of the Commitment Notice (which Commitment Period may be extended by Merrill Lynch for an additional five (5) Business Days by written notice to Raser prior to the end of the Commitment Period) or (B) decline to provide Raser a Financing Commitment within the Commitment Period. Whenever Merrill Lynch declines or fails to provide a Financing Commitment within the Commitment Period with respect to: (x) a Similar Project it shall be referred to herein as a "Similar Project Pass," and (y) any other RF Project it shall be referred to herein as a &qu ot;Project Pass." Upon the occurrence of a Similar Project Pass or a Project Pass, the applicable RF Project shall no longer be subject to the No Shop Covenant or the Right to Finance, and Raser may pursue an Alternative Transaction and consummate any Project Financing for such geothermal project.
3. Acceptance or Rejection of Merrill Lynch Financing Commitment. If Merrill Lynch submits a Financing Commitment for an RF Project within the Commitment Period, then, Raser, in its sole discretion, may either (A) accept such Financing Commitment, or (B) reject or fail to accept such Financing Commitment by the date specified in the Financing Commitment (a "Raser Rejection"); provided, however, that until such time as Merrill Closings have occurred on 20 MWs or more of collective net nameplate capacity of RF Projects, Raser shall not make a Raser Rejection of a Merrill Lynch Financing Commitment submitted within the Commitment Period if the terms and conditions of such Financing Commitment, when viewed in their entirety and adjusted to reflect the net nameplate capacity of the applicable project, are materially the same or better (from the perspective of the borrower) as the terms of the Truckee Commitment.
4. Alternative Transaction and Second Look Matching Right Notice. Upon the occurrence of a Raser Rejection, Raser may pursue a Financing Commitment from a third party (an "Alternative Transaction") with respect to the applicable RF Project after it has:

1. provided Merrill Lynch with at least three (3) Business Days' prior written notice of Raser's intent to do so (an "Alternative Transaction Notice"); and
2. thereafter notified any third party with which it proposes to discuss or negotiate an Alternative Transaction of Merrill Lynch's Second Look Matching Right as described in Paragraph 1(g) hereof.

7. Consummation of Alternative Transactions. In the case of any RF Project that is the subject of a Raser Rejection, Raser may consummate a Project Financing pursuant to an Alternative Transaction with respect to such RF Project only if each of the following conditions is satisfied:

1. Merrill Lynch's Second Look Matching Right. Raser shall have provided Merrill Lynch with a copy of the Financing Commitment for such Alternative Transaction and all other terms and conditions related thereto (a "Permitted AT Offer"), and a written offer by Raser (an "AT Offer to Match") to enter into a Financing Commitment with Merrill Lynch on the same terms and conditions as the Financing Commitment contained in the Permitted AT Offer (the "Second Look Matching Right");
2. Raser's Alternative Transaction Due Diligence Obligations. If Merrill Lynch receives a Permitted AT Offer and AT Offer to Match:

1. within thirty (30) or fewer days after Merrill Lynch's receipt of the applicable Alternative Transaction Notice, Raser shall have complied with its due diligence obligations under Paragraph 1(j) hereof at all times during a ten (10) Business Day period after Merrill Lynch's receipt of the Permitted AT Offer and AT Offer to Match; or
2. more than thirty (30) days after Merrill Lynch's receipt of the applicable Alternative Transaction Notice, Raser shall have complied with its due diligence obligations under Paragraph 1(j) hereof at all times during a twenty (20) Business Day period after Merrill Lynch's receipt of the Permitted AT Offer and AT Offer to Match (the applicable period under subclauses (A) or (B) referred to as the "Due Diligence Period"); and

3. Occurrence of a Second Look Pass. Merrill Lynch shall not have exercised its Second Look Matching Right by accepting the AT Offer to Match in a written notice delivered to Raser (a "Matching Financing Commitment") by the last day of the Due Diligence Period (a "Second Look Pass"), in which case the applicable RF Project shall no longer be subject to the No Shop Covenant or the Right to Finance, and Raser may pursue an Alternative Transaction and consummate any Project Financing for such geothermal project.

8. Failure to Fund. If the Project Financing pursuant to a Financing Commitment or Matching Financing Commitment entered into by Raser or its affiliates on one hand, and Merrill Lynch on the other hand, fails to close and fund for any reason other than the breach or default by Raser or its affiliates or the failure of Raser or its affiliates to satisfy a condition precedent to the closing or initial funding thereof, then the applicable RF Project shall no longer be subject to the No Shop Covenant or the Right to Finance, and Raser may pursue an Alternative Transaction and consummate any Project Financing for such geothermal project.
9. Adjustments to Geothermal Project Megawatts. For each Similar Project Pass occurring subsequent to the occurrence of two consecutive Similar Project Passes, the quantity of MWs included in the RF Projects shall be reduced by the MWs associated with the Similar Project that is the subject of such subsequent Similar Project Pass, up to maximum of 15 MWs for each such Similar Project Pass (the "GP Reduction"). The RF Projects, as reduced by Merrill Closings and each GP Reduction, shall be referred to herein as the "Remaining Geothermal Capacity". The GP Reduction shall be the sole and exclusive remedy of Raser and its affiliates with respect to any and all claims arising from or relating to, directly or indirectly, any Similar Project Pass, and Raser waives, on its own behalf and behalf of its affiliates, any and all rights, claims or causes of action arising under, or based with respect to, any Similar Project Pass.
10. Raser's Due Diligence Obligations. Raser agrees to (i) provide Merrill Lynch with all information deemed reasonably necessary by Merrill Lynch for its due diligence review of any RF Project, (ii) be available during regular business hours to answer questions regarding any RF Project, and (iii) ensure that senior management, representatives and advisors of Raser and/or its affiliates, as applicable, are available to participate in management meetings, information meetings, and status update meetings, where such meetings will include updates on the financing efforts being made and planned to be made by Raser and/or its affiliates in connection with the Geothermal Projects.

2. Exclusivity and Clear Market

Subject to Merrill Lynch's compliance with the terms and conditions herein, Raser agrees that it will not and will not permit its affiliates to:

1. appoint any person other than Merrill Lynch as an arranger, underwriter, book runner, documentation agent, facility agent or lender in connection with the Project or any other RF Project other than (i) to the extent the Project Financing of such RF Project is not subject to the Right to Finance or the No Shop Covenant pursuant to the terms of Paragraph 1, or (ii) as agreed to in advance and in writing by Raser and Merrill Lynch;
2. award any other titles in connection with the Project or any other RF Project, other than (i) to the extent the Project Financing of such RF Project is not subject to the Right to Finance or the No Shop Covenant, or (ii) as agreed to in advance and in writing by Raser and Merrill Lynch;
3. pay any fee or other compensation to any person for providing Project Financing for, or arranging the provision of Project Financing for, an RF Project, other than (i) to the extent the Project Financing of such RF Project is not subject to the Right to Finance or the No Shop Covenant, or (ii) as agreed to in advance and in writing by Raser and Merrill Lynch; and
4. until the Truckee Commitment terminates in accordance with Paragraph 11 (Termination), and except as otherwise contemplated herein, enter into discussions to raise or attempt to raise any other financing in the international or any relevant domestic syndicated loan, debt, bank, capital or equity markets to fund the construction or development of the Project.

3. Conditions to Truckee Commitment

The Truckee Commitment is subject to the satisfaction of each of following conditions precedent:

1. Compliance by Raser, Truckee and the Project with all of the terms of this Commitment Letter and all definitive documentation for the Truckee Transaction (including credit agreements, security documents, guarantees and limited liability company operating agreements, all such definitive documentation being referred to collectively as the "Truckee Transaction Documents") (including, without limitation, the satisfaction of all the conditions precedent in the Truckee Transaction Documents);
2. The absence of a Material Adverse Change as defined in Paragraph 4 hereof;
3. Each of the representations and warranties made by Raser, Truckee and their respective affiliates in connection with the transactions contemplated in the Truckee Transaction Documents being correct and complete in all material respects;
4. The preparation, execution and delivery of the Truckee Transaction Documents, all in form and substance satisfactory to Merrill Lynch in its sole discretion;
5. The absence of any offering, placement or arrangement for financing in the international or any relevant domestic syndicated loan, debt, bank, capital or equity markets of the construction or development of the Project or by or on behalf of Raser or Truckee that competes with, or otherwise would reasonably be expected to disrupt or interfere with the closing or syndication of any portion of the financing contemplated by the Truckee Commitment (which, for the avoidance of doubt shall not include any Pre-Construction Financing);
6. Satisfactory (as determined by Merrill Lynch in its sole discretion) and timely completion by Merrill Lynch of all legal, tax, environmental, accounting and business due diligence relating to Raser, Truckee and the Project in accordance with Annex 2;
7. The absence of any banking moratorium declared by State of New York or United States authorities;
8. Merrill Lynch shall have engaged (at its own cost and expense and not subject to reimbursement pursuant to Paragraph 5) a financial modeling consultant, reasonably acceptable to Merrill Lynch and Raser, to work jointly with Merrill Lynch and Raser and to analyze and advise regarding the financial and tax modeling relating to the Truckee Transaction, and Merrill Lynch shall be satisfied in its sole discretion with the final financial and tax model upon which the economics reflected in the Truckee Transaction Documents are based; provided, however, that if, in the reasonable opinion (reached before the closing of the Truckee Transaction) of either Merrill Lynch or Raser of the Truckee Transaction, the resulting economics as reflected in the Truckee Transaction Documents are materially adverse to such party or its affiliates relative to the economics contemplated by the financial and tax modeling delivered by Merrill Lynch to Raser on January 16, 2008, then such party may te rminate this Commitment Letter as provided in Paragraph 11(b);
9. Merrill Lynch shall have received (i) customary legal opinions from counsel to the Company regarding the Truckee Transaction (including authorization, enforceability, perfection, permitting and capitalization matters), (ii) a tax opinion from Merrill Lynch's counsel regarding such aspects of the tax equity structure as requested by Merrill Lynch, and (iii) customary certificates (including officers' certificates, good standing certificates, lien searches and insurance certificates), resolutions and other customary closing documentation, all of which opinions and other documentation under sub-clauses (i) through (iii) shall be in form and substance satisfactory to Merrill Lynch in its sole discretion; and
10. Merrill Lynch shall have obtained all necessary final internal approvals (including credit and tax approval).
11. The Class A Units in the Tax Equity Transaction shall have been acquired by a third party other than Merrill Lynch who is reasonably acceptable to Merrill Lynch, unless waived by Merrill Lynch in its sole discretion.

4. Material Adverse Change

The obligations of Merrill Lynch with respect to the Truckee Commitment are subject to the absence of any event or circumstance occurring or arising after the Effective Date (or any such event or circumstance occurring or arising at any time as to which any employee or representative of Merrill Lynch who is actively involved in the performance of Merrill Lynch's services hereunder first becomes aware after the Effective Date) that, in Merrill Lynch's sole discretion, has adversely affected or would reasonably be expected to adversely affect any of the following (a "Material Adverse Change"):

1. The business, condition (financial or otherwise), operations, performance, assets, liabilities (contingent or otherwise) or prospects of Raser, Truckee or the Project;
2. The ability of Raser or Truckee to perform its obligations under this Commitment Letter or any of the Truckee Transaction Documents;
3. The construction and completion of the Project as contemplated by this Commitment Letter and the Truckee Transaction Documents; or
4. The financial markets, banking markets or capital markets in the United States as determined by Merrill Lynch.

5. Expenses and Fees

Raser and, solely with respect to the Truckee Transaction, Truckee, agree to reimburse Merrill Lynch for the reasonable out-of-pocket expenses incurred by Merrill Lynch upon Merrill Lynch's request made from time to time (including, without limitation, all reasonable due diligence investigation expenses, fees of consultants engaged with Raser's consent (not to be unreasonably withheld), appraisal and valuation fees and expenses, travel expenses, duplication fees and expenses, audit fees, search fees, filing and recording fees, the reasonable fees, disbursements and other charges of counsel (including any local or regulatory counsel), any sales, use or similar taxes (and any additions to such taxes) related to any of the foregoing) incurred in connection with the negotiation, preparation, execution and delivery, waiver or modification of this Commitment Letter and the Truckee Transaction Documents, whether or not such fees and expenses are incurred before or after the Effective Date and whether or not any definitive documentation is entered into or the Truckee Transaction is consummated or any extensions of credit are made under the Truckee Transaction Documents or this Commitment Letter is terminated or expires.

6. Structuring Fee

Upon the closing of the Truckee Transaction, Truckee will pay in full to Merrill Lynch from the proceeds thereof the non-refundable structuring fee relating to the Senior Secured Financing and the Letter of Credit Financing, if applicable, of the Truckee Transaction as and when required by the Fee Letter being entered into concurrently herewith among the parties hereto (the "Fee Letter").

7. Raser Warrants

As additional consideration to Merrill Lynch for the investment risk assumed in connection with the Truckee Commitment, including its tax equity financing, and the other agreements contained in this Commitment Letter, Raser hereby grants to Merrill Lynch warrants to purchase up to an aggregate of 3,950,000 shares of common stock, par value $0.01 per share of Raser ("Raser Common Stock") in connection with this Commitment Letter and for RF Projects (the "Non-ROFR Warrants") as provided in subparagraphs 7(a)(i) through 7(a)(vi) and Paragraph 7(c) below, subject to the vesting provisions contained in such subparagraphs. Separately, Raser hereby agrees to grant to Merrill Lynch warrants to purchase up to an aggregate of 1,925,000 shares of Raser Common Stock for ROFR Projects upon the execution of Financing Commitments between Raser and Merrill Lynch for the ROFR Projects as provided in subparagraph (b) below (the "ROFR Warrants" a nd together with the Non-ROFR Warrants, the "Warrants"). The grants to be made pursuant to each subparagraph of Paragraph 7(a) and pursuant to Paragraph 7(b) shall each be referred to as a "Warrant Installment".

(a) Vesting Schedule for Non-ROFR Warrants. Subject to Paragraph 7(c) below, the Non-ROFR Warrants shall vest and become exercisable as follows:

1. Concurrent with the Effective Date and provided that the Effective Date is on or before December 31, 2007, Non-ROFR Warrants shall vest and become exercisable for the purchase of 250,000 shares of Raser Common Stock. The exercise price for such Non-ROFR Warrants shall be the volume weighted average price ("VWAP") of the Raser Common Stock for the 20 consecutive Trading Day period immediately preceding the Effective Date (the "Original Warrant Price") less a 5% discount. If the Effective Date occurs after December 31, 2007, the aggregate number of Non-ROFR Warrants eligible to vest in accordance with this Paragraph 7(a) shall be reduced to 3,700,000.
2. Concurrent with each Merrill Closing with respect to any portion of the first 10 MWs of RF Projects (on a net nameplate basis and including the Project and the Truckee Transaction), Non-ROFR Warrants shall vest and become exercisable for the purchase of 300,000 shares of Raser Common Stock for each $10 million of financing provided or arranged by Merrill Lynch (without regard to any letter of credit financing or tax equity structured arrangements and with the quantity of shares of Raser Common Stock being pro rated based upon the actual dollar amount of the financing so provided or arranged). The exercise price for such Non-ROFR Warrants shall equal the Original Warrant Price less a 5% discount.
3. Concurrent with each Merrill Closing with respect to any portion of the next 10 MWs of RF Projects (on a net nameplate basis) after taking into account the transactions contemplated by the foregoing subclause (ii), Non-ROFR Warrants shall vest and become exercisable for the purchase of 150,000 shares of Raser Common Stock for each $10 million of financing provided or arranged by Merrill Lynch (without regard to any letter of credit financing or tax equity structured arrangements and with the quantity of shares of Raser Common Stock being pro rated based upon the actual dollar amount of the financing so provided or arranged). The exercise price for such Non-ROFR Warrants shall equal the Original Warrant Price less a 5% discount.
4. Concurrent with each Merrill Closing with respect to any portion of the next 30 MWs of RF Projects (on a net nameplate basis) after taking into account the transactions contemplated by the foregoing subclauses (ii) and (iii), Non-ROFR Warrants shall vest and become exercisable for the purchase of 100,000 shares of Raser Common Stock for each $10 million of financing provided or arranged by Merrill Lynch (without regard to any letter of credit financing or tax equity structured arrangements and with the quantity of shares of Raser Common Stock being pro rated based upon the actual dollar amount of the financing so provided or arranged). The exercise price for such Non-ROFR Warrants shall equal the Original Warrant Price less a 5% discount.
5. Concurrent with each Merrill Closing with respect to any portion of the next 50 MWs of RF Projects (on a net nameplate basis) after taking into account the transactions contemplated by the foregoing subclauses (ii), (iii) and (iv), Non-ROFR Warrants shall vest and become exercisable for the purchase of 50,000 shares of Raser Common Stock for each $10 million of financing provided or arranged by Merrill Lynch (without regard to any letter of credit financing or tax equity structured arrangements and with the quantity of shares of Raser Common Stock being pro rated based upon the actual dollar amount of the financing so provided or arranged). The exercise price for such Non-ROFR Warrants shall equal the Original Warrant Price plus a 25% premium.
6. Concurrent with the Merrill Closing with respect to the final MW (i.e., the one hundredth MW) of RF Projects (on a net nameplate basis) after taking into account the transactions contemplated by the foregoing subclauses (ii), (iii), (iv) and (v), Non-ROFR Warrants shall vest and become exercisable for the purchase of 200,000 shares of Raser Common Stock. The exercise price for such Non-ROFR Warrants shall equal the Original Warrant Price plus a 25% premium.

(b) Grant Schedule for ROFR Warrants. Concurrent with the execution of each commitment letter with respect to any ROFR Projects, ROFR Warrants shall be granted to Merrill Lynch for the purchase of 100,000 shares of Raser Common Stock for each $10 million of financing provided or arranged by Merrill Lynch (without regard to any letter of credit financing or tax equity structured arrangements and with the quantity of shares of Raser Common Stock being pro rated based upon the actual dollar amount of the financing so provided or arranged). Such ROFR Warrants shall vest and become exercisable concurrent with each Merrill Closing with respect to the respective ROFR Project. The exercise price for such ROFR Warrants shall equal the VWAP of the Raser Common stock for the period of twenty (20) consecutive Trading Days immediately preceding the date of grant of such ROFR Warrants (each, an "Original ROFR Warrant Price") plus a 25% premium.

(c) Raser Rejection Grants. Subject to closing and funding of the Truckee Transaction, in the event that there occurs a Raser Rejection with respect to an RF Project (each, a "Rejection Grant Event"), Non-ROFR Warrants will vest and become exercisable concurrent with the closing and funding of a Project Financing for such RF Project provided by another lender or investor in the following amounts:

(i) 50% of the Non-ROFR Warrants that would have vested under Paragraph 7(a) upon a Merrill Closing with respect to such RF Project in the case of the first Rejection Grant Event;

(ii) 40% of the Non-ROFR Warrants that would have vested under Paragraph 7(a) upon a Merrill Closing with respect to such RF Project in the case of the second Rejection Grant Event;

(iii) 30% of the Non-ROFR Warrants that would have vested under Paragraph 7(a) upon a Merrill Closing with respect to such RF Project in the case of the third Rejection Grant Event;

(iv) 20% of the Non-ROFR Warrants that would have vested under Paragraph 7(a) upon a Merrill Closing with respect to such RF Project in the case of the fourth Rejection Grant Event;

(v) 10% of the Non-ROFR Warrants that would have vested under Paragraph 7(a) upon a Merrill Closing with respect to such RF Project in the case of the fifth Rejection Grant Event; and

(vi) no Non-ROFR Warrants in the case of any subsequent Rejection Grant Events;

provided, however, that, for the avoidance of doubt and notwithstanding anything in this Commitment Letter to the contrary, if Raser provides Merrill Lynch with a copy of a Financing Commitment duly executed by another lender or investor for an Alternative Transaction relating to an RF Project within thirty (30) calendar days after Raser issues a Raser Rejection to Merrill Lynch with respect to such RF Project, the closing of a Project Financing related to such RF Project shall not be considered a Merrill Closing even if Merrill Lynch ultimately provides or arranges for such Project Financing and Non-ROFR Warrants will vest and become exercisable with respect to such Project Financing under this Paragraph 7(c) rather than pursuant to Paragraph 7(a) above.

(d) Call Provisions. Each Warrant may be called for cancellation by Raser as follows:

(i) In addition to any Warrants that may be called for cancellation pursuant to any other subparagraph of this Paragraph 7(d), any or all of the first 395,000 Warrants to vest and become exercisable pursuant to Paragraph 7(a) (the "First Series of Warrants") may be called for cancellation by Raser (by providing written notice of cancellation to the Holder (as defined in the applicable Warrant Agreement) pursuant to the notice provisions of the applicable Warrant Agreement) if (A) during any period of twenty (20) consecutive Trading Days concluding at any time after the later of (x) thirty (30) days after the first Merrill Closing (the "First Merrill Closing") and (y) March 1, 2008, the closing price of the Raser Common Stock exceeds 150% of the Original Warrant Price (each such period, a "First Call Measurement Period"), (B) Raser provides written notice to the Holder that Raser intends to cancel any or all of the Warrants comprising such First Series of Warrants (a "First Call Notice of Intention to Cancel") prior to 6:30 p.m. New York City time on the third (3rd) Trading Day immediately following the end of the relevant First Call Measurement Period (each such period of three (3) Trading Days, a "First Call Cancellation Notice Period") and (C) the Holder does not provide Raser with a notice of exercise of the Warrants subject to the First Call Notice of Intention to Cancel within ten (10) Trading Days after receipt of the First Call Notice of Intention to Cancel; provided, however, that if Raser fails to deliver a First Call Notice of Intention to Cancel within the First Call Cancellation Notice Period relating to any First Call Measurement Period and the Holder, prior to 6:30 p.m. New York City time on the sixth (6th) Trading Day immediately following the end of such First Call Measurement Period (each such period a "First Call Alert Notice Period"), provides written no tice to Raser to the effect that Raser failed to deliver a First Call Notice of Intention to Cancel when it was eligible to do so (a "First Call Alert Notice"), the First Call Cancellation Notice Period with respect to such First Call Measurement Period shall be extended until 6:30 p.m. New York City time on the third (3rd) Trading Day immediately following the receipt by Raser of such First Call Alert Notice; and provided further that, if Raser receives a First Call Alert Notice with respect to any First Call Measurement Period and Raser fails to provide a First Call Notice of Intention to Cancel within such extended First Call Cancellation Notice Period, Raser shall have no further right to cancel any Warrants in the First Series of Warrants, regardless of whether the closing price of the Raser Common Stock exceeds 150% of the Original Warrant Price for any subsequent period of twenty (20) consecutive Trading Days after such First Call Measurement Period; and provided further, for the avoidance of doubt, if Raser fails to provide a First Call Notice of Intention to Cancel within a First Call Cancellation Notice Period relating to any First Call Measurement Period (without taking into account any extension thereof) and the Holder does not provide to Raser a First Call Alert Notice within the applicable First Call Alert Notice Period relating to such First Call Measurement Period, Raser shall have no further right to cancel Warrants pursuant to this subparagraph 7(d)(i) as a result of the closing price of the Raser Common Stock having exceeded 150% of the Original Warrant Price during such First Call Measurement Period but Raser shall retain the rights set forth in this subparagraph 7(d)(i) with respect to future First Call Measurement Periods.

(ii) In addition to any Warrants that may be called for cancellation pursuant to any other subparagraph of this Paragraph 7(d), any or all of the next 395,000 Warrants to vest and become exercisable after the First Series of Warrants pursuant to Paragraph 7(a) (the "Second Series of Warrants") may be called for cancellation by Raser (by providing written notice of cancellation to the Holder pursuant to the notice provisions of the applicable Warrant Agreement) if (A) during any period of twenty (20) consecutive Trading Days concluding at any time after the later of (x) ninety (90) days after the First Merrill Closing and (y) May 1, 2008, the closing price of Raser Common Stock exceeds 150% of the Original Warrant Price (each such period, a "Second Call Measurement Period"), (B) Raser provides written notice to the Holder that Raser intends to cancel any or all of the Warrants comprising such Second Series of Warrants (a "Second Call N otice of Intention to Cancel") prior to 6:30 p.m. New York City time on the third (3rd) Trading Day immediately following the end of the relevant Second Call Measurement Period (each such period of three (3) Trading Days, a "Second Call Cancellation Notice Period") and (C) the Holder does not provide Raser with a notice of exercise of the Warrants subject to the Second Call Notice of Intention to Cancel within ten (10) Trading Days after receipt of the Second Call Notice of Intention to Cancel; provided, however, that if Raser fails to deliver a Second Call Notice of Intention to Cancel within the Second Call Cancellation Notice Period relating to any Second Call Measurement Period and the Holder, prior to 6:30 p.m. New York City time on the sixth (6th) Trading Day immediately following the end of such Second Call Measurement Period (each such period a "Second Call Alert Notice Period"), provides written notice to Raser to the effect that Raser failed to deliver a Second Call Notice of Intention to Cancel when it was eligible to do so (a "Second Call Alert Notice"), the Second Call Cancellation Notice Period with respect to such Second Call Measurement Period shall be extended until 6:30 p.m. New York City time on the third (3rd) Trading Day immediately following the receipt by Raser of such Second Call Alert Notice; and provided, further that, if Raser receives a Second Call Alert Notice with respect to any Second Call Measurement Period and Raser fails to provide a Second Call Notice of Intention to Cancel within such extended Second Call Cancellation Notice Period, Raser shall have no further right to cancel any Warrants in the Second Series of Warrants, regardless of whether the closing price of the Raser Common Stock exceeds 150% of the Original Warrant Price for any subsequent period of twenty (20) consecutive Trading Days after such Second Call Measurement Period; and provided further, for the avoidance of doubt, if Raser fails to provide a Second Call Notice of Intention to Cancel within a Second Call Cancellation Notice Period relating to any Second Call Measurement Period (without taking into account any extension thereof) and the Holder does not provide to Raser a Second Call Alert Notice within the applicable Second Call Alert Notice Period relating to such Second Call Measurement Period, Raser shall have no further right to cancel Warrants pursuant to this subparagraph 7(d)(ii) as a result of the closing price of the Raser Common Stock having exceeded 150% of the Original Warrant Price during such Second Call Measurement Period but Raser shall retain the rights set forth in this subparagraph 7(d)(ii) with respect to future Second Call Measurement Periods.

(iii) In addition to any Warrants that may be called for cancellation pursuant to any other subparagraph of this Paragraph 7(d), any or all of the next 395,000 Warrants to vest and become exercisable after the Second Series of Warrants pursuant to Paragraph 7(a) (the "Third Series of Warrants") may be called for cancellation by Raser (by providing written notice of cancellation to the Holder pursuant to the notice provisions of the applicable Warrant Agreement) if (A) during any period of twenty (20) consecutive Trading Days concluding at any time after the later of (x) 150 days after the First Merrill Closing and (y) July 1, 2008, the closing price of Raser Common Stock exceeds 150% of the Original Warrant Price (each such period, a "Third Call Measurement Period"), (B) Raser provides written notice to the Holder that Raser intends to cancel any or all of the Warrants comprising such Third Series of Warrants (a "Third Call Notice of Intenti on to Cancel") prior to 6:30 p.m. New York City time on the third (3rd) Trading Day immediately following the end of the relevant Third Call Measurement Period (each such period of three (3) Trading Days, a "Third Call Cancellation Notice Period") and (C) the Holder does not provide Raser with a notice of exercise of the Warrants subject to the Third Call Notice of Intention to Cancel within ten (10) Trading Days after receipt of the Third Call Notice of Intention to Cancel; provided, however, that if Raser fails to deliver a Third Call Notice of Intention to Cancel within the Third Call Cancellation Notice Period relating to any Third Call Measurement Period and the Holder, prior to 6:30 p.m. New York City time on the sixth (6th) Trading Day immediately following the end of such Third Call Measurement Period (each such period a "Third Call Alert Notice Period"), provides written notice to Raser to the effect that Raser failed to deliver a Third Call Notice of Intention to Cancel when it was eligible to do so (a "Third Call Alert Notice"), the Third Call Cancellation Notice Period with respect to such Third Call Measurement Period shall be extended until 6:30 p.m. New York City time on the third (3rd) Trading Day immediately following the receipt by Raser of such Third Call Alert Notice; and provided further that, if Raser receives a Third Call Alert Notice with respect to any Third Call Measurement Period and Raser fails to provide a Third Call Notice of Intention to Cancel within such extended Third Call Cancellation Notice Period, Raser shall have no further right to cancel any Warrants in the Third Series of Warrants, regardless of whether the closing price of the Raser Common Stock exceeds 150% of the Original Warrant Price for any subsequent period of twenty (20) consecutive Trading Days after such Third Call Measurement Period; and provided further, for the avoidance of doubt, if Raser fails to provide a Third Call Notice of Intention to Cancel within a Third Call Cancellation Notice Period relating to any Third Call Measurement Period (without taking into account any extension thereof) and the Holder does not provide to Raser a Third Call Alert Notice within the applicable Third Call Alert Notice Period relating to such Third Call Measurement Period, Raser shall have no further right to cancel Warrants pursuant to this subparagraph 7(d)(iii) as a result of the closing price of the Raser Common Stock having exceeded 150% of the Original Warrant Price during such Third Call Measurement Period but Raser shall retain the rights set forth in this subparagraph 7(d)(iii) with respect to future Third Call Measurement Periods.

(iv) In addition to any Warrants that may be called for cancellation pursuant to any other subparagraph of this Paragraph 7(d), any or all of the next 395,000 Warrants to vest and become exercisable after the Third Series of Warrants pursuant to Paragraph 7(a) (the "Fourth Series of Warrants") may be called for cancellation by Raser (by providing written notice of cancellation to the Holder pursuant to the notice provisions of the applicable Warrant Agreement) if (A) during any period of twenty (20) consecutive Trading Days concluding at any time after the later of (x) 210 days after the First Merrill Closing and (y) September 1, 2008, the closing price of Raser Common Stock exceeds 250% of the Original Warrant Price (each such period, a "Fourth Call Measurement Period"), (B) Raser provides written notice to the Holder that Raser intends to cancel any or all of the Warrants comprising such Fourth Series of Warrants (a "Fourth Call Not ice of Intention to Cancel") prior to 6:30 p.m. New York City time on the third (3rd) Trading Day immediately following the end of the relevant Fourth Call Measurement Period (each such period of three (3) Trading Days, a "Fourth Call Cancellation Notice Period") and (C) the Holder does not provide Raser with a notice of exercise of the Warrants subject to the Fourth Call Notice of Intention to Cancel within ten (10) Trading Days after receipt of the Fourth Call Notice of Intention to Cancel; provided, however, that if Raser fails to deliver a Fourth Call Notice of Intention to Cancel within the Fourth Call Cancellation Notice Period relating to any Fourth Call Measurement Period and the Holder, prior to 6:30 p.m. New York City time on the sixth (6th) Trading Day immediately following the end of such Fourth Call Measurement Period (each such period a "Fourth Call Alert Notice Period"), provides written notice to Raser to the effect that Raser f ailed to deliver a Fourth Call Notice of Intention to Cancel when it was eligible to do so (a "Fourth Call Alert Notice"), the Fourth Call Cancellation Notice Period with respect to such Fourth Call Measurement Period shall be extended until 6:30 p.m. New York City time on the third (3rd) Trading Day immediately following the receipt by Raser of such Fourth Call Alert Notice; and provided further that, if Raser receives a Fourth Call Alert Notice with respect to any Fourth Call Measurement Period and Raser fails to provide a Fourth Call Notice of Intention to Cancel within such extended Fourth Call Cancellation Notice Period, Raser shall have no further right to cancel any Warrants in the Fourth Series of Warrants, regardless of whether the closing price of the Raser Common Stock exceeds 250% of the Original Warrant Price for any subsequent period of twenty (20) consecutive Trading Days after such Fourth Call Measurement Period; and provided further, for the avoid ance of doubt, if Raser fails to provide a Fourth Call Notice of Intention to Cancel within a Fourth Call Cancellation Notice Period relating to any Fourth Call Measurement Period (without taking into account any extension thereof) and the Holder does not provide to Raser a Fourth Call Alert Notice within the applicable Fourth Call Alert Notice Period relating to such Fourth Call Measurement Period, Raser shall have no further right to cancel Warrants pursuant to this subparagraph 7(d)(iv) as a result of the closing price of the Raser Common Stock having exceeded 250% of the Original Warrant Price during such Fourth Call Measurement Period but Raser shall retain the rights set forth in this subparagraph 7(d)(iv) with respect to future Fourth Call Measurement Periods.

(v) In addition to any Warrants that may be called for cancellation pursuant to any other subparagraph of this Paragraph 7(d), any or all of the next 395,000 Warrants to vest and become exercisable after the Fourth Series of Warrants pursuant to Paragraph 7(a) (the "Fifth Series of Warrants") may be called for cancellation by Raser (by providing written notice of cancellation to the Holder pursuant to the notice provisions of the applicable Warrant Agreement) if (A) during any period of twenty (20) consecutive Trading Days concluding at any time after the first anniversary of the Effective Date, the closing price of Raser Common Stock exceeds 250% of the Original Warrant Price (each such period, a "Fifth Call Measurement Period"), (B) Raser provides written notice to the Holder that Raser intends to cancel any or all of the Warrants comprising such Fifth Series of Warrants (a "Fifth Call Notice of Intention to Cancel") prior to 6:30 p.m. New York City time on the third (3rd) Trading Day immediately following the end of the relevant Fifth Call Measurement Period (each such period of three (3) Trading Days, a "Fifth Call Cancellation Notice Period") and (C) the Holder does not provide Raser with a notice of exercise of the Warrants subject to the Fifth Call Notice of Intention to Cancel within ten (10) Trading Days after receipt of the Fifth Call Notice of Intention to Cancel; provided, however, that if Raser fails to deliver a Fifth Call Notice of Intention to Cancel within the Fifth Call Cancellation Notice Period relating to any Fifth Call Measurement Period and the Holder, prior to 6:30 p.m. New York City time on the sixth (6th) Trading Day immediately following the end of such Fifth Call Measurement Period (each such period a "Fifth Call Alert Notice Period"), provides written notice to Raser to the effect that Raser failed to deliver a Fifth Call Notice of Intention to Cancel w hen it was eligible to do so (a "Fifth Call Alert Notice"), the Fifth Call Cancellation Notice Period with respect to such Fifth Call Measurement Period shall be extended until 6:30 p.m. New York City time on the third (3rd) Trading Day immediately following the receipt by Raser of such Fifth Call Alert Notice; and provided further that, if Raser receives a Fifth Call Alert Notice with respect to any Fifth Call Measurement Period and Raser fails to provide a Fifth Call Notice of Intention to Cancel within such extended Fifth Call Cancellation Notice Period, Raser shall have no further right to cancel any Warrants in the Fifth Series of Warrants, regardless of whether the closing price of the Raser Common Stock exceeds 250% of the Original Warrant Price for any subsequent period of twenty (20) consecutive Trading Days after such Fifth Call Measurement Period; and provided further, for the avoidance of doubt, if Raser fails to provide a Fifth Call Notice of Intentio n to Cancel within a Fifth Call Cancellation Notice Period relating to any Fifth Call Measurement Period (without taking into account any extension thereof) and the Holder does not provide to Raser a Fifth Call Alert Notice within the applicable Fifth Call Alert Notice Period relating to such Fifth Call Measurement Period, Raser shall have no further right to cancel Warrants pursuant to this subparagraph 7(d)(v) as a result of the closing price of the Raser Common Stock having exceeded 250% of the Original Warrant Price during such Fifth Call Measurement Period but Raser shall retain the rights set forth in this subparagraph 7(d)(v) with respect to future Fifth Call Measurement Periods.

(vi) In addition to any Warrants that may be called for cancellation pursuant to any other subparagraph of this Paragraph 7(d), any or all of the next 987,500 Warrants to vest and become exercisable after the Fifth Series of Warrants pursuant to Paragraph 7(a) (the "Sixth Series of Warrants") may be called for cancellation by Raser (by providing written notice of cancellation to the Holder pursuant to the notice provisions of the applicable Warrant Agreement) if (A) during any period of twenty (20) consecutive Trading Days concluding at any time after the third anniversary of the Effective Date, the closing price of Raser Common Stock exceeds 375% of the Original Warrant Price (each such period, a "Sixth Call Measurement Period"), (B) Raser provides written notice to the Holder that Raser intends to cancel any or all of the Warrants comprising such Sixth Series of Warrants (a "Sixth Call Notice of Intention to Cancel") prior to 6:30 p.m. New York City time on the third (3rd) Trading Day immediately following the end of the relevant Sixth Call Measurement Period (each such period of three (3) Trading Days, a "Sixth Call Cancellation Notice Period") and (C) the Holder does not provide Raser with a notice of exercise of the Warrants subject to the Sixth Call Notice of Intention to Cancel within ten (10) Trading Days after receipt of the Sixth Call Notice of Intention to Cancel; provided, however, that if Raser fails to deliver a Sixth Call Notice of Intention to Cancel within the Sixth Call Cancellation Notice Period relating to any Sixth Call Measurement Period and the Holder, prior to 6:30 p.m. New York City time on the sixth (6th) Trading Day immediately following the end of such Sixth Call Measurement Period (each such period a "Sixth Call Alert Notice Period"), provides written notice to Raser to the effect that Raser failed to deliver a Sixth Call Notice of Intention to C ancel when it was eligible to do so (a "Sixth Call Alert Notice"), the Sixth Call Cancellation Notice Period with respect to such Sixth Call Measurement Period shall be extended until 6:30 p.m. New York City time on the third (3rd) Trading Day immediately following the receipt by Raser of such Sixth Call Alert Notice; and provided further that, if Raser receives a Sixth Call Alert Notice with respect to any Sixth Call Measurement Period and Raser fails to provide a Sixth Call Notice of Intention to Cancel within such extended Sixth Call Cancellation Notice Period, Raser shall have no further right to cancel any Warrants in the Sixth Series of Warrants, regardless of whether the closing price of the Raser Common Stock exceeds 375% of the Original Warrant Price for any subsequent period of twenty (20) consecutive Trading Days after such Sixth Call Measurement Period; and provided further, for the avoidance of doubt, if Raser fails to provide a Sixth Call Notice of I ntention to Cancel within a Sixth Call Cancellation Notice Period relating to any Sixth Call Measurement Period (without taking into account any extension thereof) and the Holder does not provide to Raser a Sixth Call Alert Notice within the applicable Sixth Call Alert Notice Period relating to such Sixth Call Measurement Period, Raser shall have no further right to cancel Warrants pursuant to this subparagraph 7(d)(vi) as a result of the closing price of the Raser Common Stock having exceeded 375% of the Original Warrant Price during such Sixth Call Measurement Period but Raser shall retain the rights set forth in this subparagraph 7(d)(vi) with respect to future Sixth Call Measurement Periods.

(vii) In addition to any Warrants that may be called for cancellation pursuant to any other subparagraph of this Paragraph 7(d), any or all of the next 987,500 Warrants to vest and become exercisable after the Sixth Series of Warrants pursuant to Paragraph 7(a) (the "Seventh Series of Warrants") may be called for cancellation by Raser (by providing written notice of cancellation to the Holder pursuant to the notice provisions of the applicable Warrant Agreement) if (A) during any period of twenty (20) consecutive Trading Days concluding at any time after the fifth anniversary of the Effective Date, the closing price of Raser Common Stock exceeds 500% of the Original Warrant Price (each such period, a "Seventh Call Measurement Period"), (B) Raser provides written notice to the Holder that Raser intends to cancel any or all of the Warrants comprising such Seventh Series of Warrants (a "Seventh Call Notice of Intention to Cancel" ;) prior to 6:30 p.m. New York City time on the third (3rd) Trading Day immediately following the end of the relevant Seventh Call Measurement Period (each such period of three (3) Trading Days, a "Seventh Call Cancellation Notice Period") and (C) the Holder does not provide Raser with a notice of exercise of the Warrants subject to the Seventh Call Notice of Intention to Cancel within ten (10) Trading Days after receipt of the Seventh Call Notice of Intention to Cancel; provided, however, that if Raser fails to deliver a Seventh Call Notice of Intention to Cancel within the Seventh Call Cancellation Notice Period relating to any Seventh Call Measurement Period and the Holder, prior to 6:30 p.m. New York City time on the sixth (6th) Trading Day immediately following the end of such Seventh Call Measurement Period (each such period a "Seventh Call Alert Notice Period"), provides written notice to Raser to the effect that Raser failed to deliver a Seventh Call Notice of Intention to Cancel when it was eligible to do so (a "Seventh Call Alert Notice"), the Seventh Call Cancellation Notice Period with respect to such Seventh Call Measurement Period shall be extended until 6:30 p.m. New York City time on the third (3rd) Trading Day immediately following the receipt by Raser of such Seventh Call Alert Notice; and provided further that, if Raser receives a Seventh Call Alert Notice with respect to any Seventh Call Measurement Period and Raser fails to provide a Seventh Call Notice of Intention to Cancel within such extended Seventh Call Cancellation Notice Period, Raser shall have no further right to cancel any Warrants in the Seventh Series of Warrants, regardless of whether the closing price of the Raser Common Stock exceeds 500% of the Original Warrant Price for any subsequent period of twenty (20) consecutive Trading Days after such Seventh Call Measurement Period; and provided further, for the avoidance of doubt, if Raser fails to provide a Seventh Call Notice of Intention to Cancel within a Seventh Call Cancellation Notice Period relating to any Seventh Call Measurement Period (without taking into account any extension thereof) and the Holder does not provide to Raser a Seventh Call Alert Notice within the applicable Seventh Call Alert Notice Period relating to such Seventh Call Measurement Period, Raser shall have no further right to cancel Warrants pursuant to this subparagraph 7(d)(vii) as a result of the closing price of the Raser Common Stock having exceeded 500% of the Original Warrant Price during such Seventh Call Measurement Period but Raser shall retain the rights set forth in this subparagraph 7(d)(vii) with respect to future Seventh Call Measurement Periods.

(viii) In addition to any Warrants that may be called for cancellation pursuant to any other subparagraph of this Paragraph 7(d), any or all of the ROFR Warrants granted in respect of a Merrill Closing for a ROFR Project (each a "ROFR Series of Warrants") may be called for cancellation by Raser (by providing written notice of cancellation to the Holder pursuant to the notice provisions of the applicable Warrant Agreement) if (A) during any period of twenty (20) consecutive Trading Days concluding at any time after the issuance of such ROFR Warrants, the closing price of Raser Common Stock exceeds 150% of the Original ROFR Warrant Price applicable to such ROFR Warrants (each such period, a "ROFR Call Measurement Period"), (B) Raser provides written notice to the Holder that Raser intends to cancel any or all of such ROFR Warrants (a "ROFR Notice of Intention to Cancel") prior to 6:30 p.m. New York City time on the third (3rd) Trading D ay immediately following the end of the relevant ROFR Call Measurement Period (each such period of three (3) Trading Days, a "ROFR Cancellation Notice Period") and (C) the Holder does not provide Raser with a notice of exercise of the ROFR Warrants subject to the ROFR Notice of Intention to Cancel within ten (10) Trading Days after receipt of the ROFR Notice of Intention to Cancel; provided, however, that if Raser fails to deliver a ROFR Notice of Intention to Cancel within the ROFR Cancellation Notice Period relating to any ROFR Call Measurement Period and the Holder, prior to 6:30 p.m. New York City time on the sixth (6th) Trading Day immediately following the end of such ROFR Call Measurement Period (each such period a "ROFR Call Alert Notice Period"), provides written notice to Raser to the effect that Raser failed to deliver a ROFR Notice of Intention to Cancel when it was eligible to do so (a "ROFR Call Alert Notice"), the ROFR Cancellat ion Notice Period with respect to such ROFR Call Measurement Period shall be extended until 6:30 p.m. New York City time on the third (3rd) Trading Day immediately following the receipt by Raser of such ROFR Call Alert Notice; and provided further that, if Raser receives a ROFR Call Alert Notice with respect to any ROFR Call Measurement Period and Raser fails to provide a ROFR Notice of Intention to Cancel within such extended ROFR Cancellation Notice Period, Raser shall have no further right to cancel any ROFR Warrants in the applicable ROFR Series of Warrants, regardless of whether the closing price of the Raser Common Stock exceeds 150% of the Original ROFR Warrant Price applicable to such ROFR Warrants for any subsequent period of twenty (20) consecutive Trading Days after such ROFR Call Measurement Period; and provided further, for the avoidance of doubt, if Raser fails to provide a ROFR Call Notice of Intention to Cancel within a ROFR Call Cancellation Notice Period relating to any ROFR Call Measurement Period (without taking into account any extension thereof) and the Holder does not provide to Raser a ROFR Call Alert Notice within the applicable ROFR Call Alert Notice Period relating to such ROFR Call Measurement Period, Raser shall have no further right to cancel ROFR Warrants in the applicable ROFR Series of Warrants pursuant to this subparagraph 7(d)(viii) as a result of the closing price of the Raser Common Stock having exceeded 150% of the Original ROFR Warrant Price applicable to such ROFR Warrants during such ROFR Call Measurement Period but Raser shall retain the rights set forth in this subparagraph 7(d)(viii) for such ROFR Warrants with respect to future ROFR Call Measurement Periods. For purposes of this Paragraph 7, any First Call Notice of Intention to Cancel, any Second Call Notice of Intention to Cancel, any Third Call Notice of Intention to Cancel, any Fourth Call Notice of Intention to Cancel, any Fifth Call Notice of Intention to Cancel, any Sixth Call Noti ce of Intention to Cancel, any Seventh Call Notice of Intention to Cancel and any ROFR Notice of Intention to Cancel shall be referred to as a "Notice of Intention to Cancel".

(ix) Notwithstanding anything to the contrary herein or in any applicable Warrant Agreement, (a) Raser may not cancel any Warrant unless, with respect to Warrants in the First Series of Warrants and the Second Series of Warrants, throughout the period from the date of the Notice of Intention to Cancel relating to such Warrant through the date of cancellation of such Warrant, and with respect to Warrants in the Third Series of Warrants, the Fourth Series of Warrants, the Fifth Series of Warrants, the Sixth Series of Warrants, the Seventh Series of Warrants and any ROFR Warrants, throughout the period beginning sixty (60) calendar days prior to the date of the Notice to Intention to Cancel relating to such Warrant and ending on the date of cancellation of such Warrant, (1) a Registration Statement (as defined in the Registration Rights Agreement dated as of the date hereof between Raser and Merrill Lynch (the "Registration Rights Agreement")) has been filed covering the resale of such Warrant and all shares of Raser Common Stock issuable upon exercise of such Warrant, (2) such Registration Statement is effective as to such Warrant and such shares of Raser Common Stock and the prospectus thereunder is available for use by the Holder and any holder of such shares of Raser Common Stock for the resale of such Warrant and such shares of Raser Common Stock, and (3) the Raser Common Stock is listed or quoted for trading on the Trading Market (the conditions described in the foregoing clauses (1), (2) and (3) being hereinafter referred to as the "Registration Conditions"), and (b) if at any time when a Registration Statement covering the resale of any Warrants or the shares of Raser Common Stock issuable upon exercise of such Warrants is required to be effective pursuant to the Registration Rights Agreement, the Registration Conditions are not met with the respect to such Warrants or such shares of Raser Common Stock (each such period a "Restricted Period< /b>"), and at any time during such Restricted Period the Holder of any such Warrants or any holder of such shares of Raser Common Stock provides Raser written notice (an "Attempted Trade Notice") to the effect that it has a bona fide intention to sell such Warrants or any such shares of Raser Common Stock pursuant to a Registration Statement (which notice shall specify the date of such intended sale and the last reported sale price of the Raser Common Stock on the Trading Market on such day (the "Restricted Period Closing Price")), and Raser later issues a Notice of Intention to Cancel any such Warrant that was the subject of an Attempted Trade Notice (or if an Attempted Trade Notice covered any shares of Raser Common Stock issuable upon exercise of a Warrant that was the subject of a Notice of Intention to Cancel), then in addition to any liquidated damages payable by Raser pursuant to Section 2(b) of the Registration Rights Agreement, Raser shall be required to pay to the Holder of such Warrant or the holder of such shares of Raser Common Stock, as the case may be, within five (5) Trading Days of any sale of such Warrant or such shares of Raser Common Stock by such Holder or holder, as the case may be, after the receipt of the Notice of Intention to Cancel an amount equal to the product of (1) the number of shares of Raser Common Stock represented by the Warrant that was the subject of the Attempted Trade Notice (or if the Attempted Trade Notice covered shares of Raser Common Stock issuable upon exercise of a Warrant, such number of shares of the Raser Common Stock) times (2) the difference between (a) the VWAP of the Raser Common Stock on the date of intended sale specified on the Attempted Trade Notice and (b) the greater of (I) the sale price received by such Holder or holder for such Warrant or such shares of the Raser Common Stock pursuant to such subsequent sale and (II) the VWAP of the Raser Common Stock on the date of such subsequent sale.

(x) Raser shall give Merrill Lynch written notice of a Change in Control at least twenty (20) Trading Days prior to closing or effectiveness of such Change in Control, which notice shall describe in reasonable detail the terms of the Change in Control and the anticipated members of the Company's management team after closing or effectiveness of the Change in Control (such notice a "Change in Control Notice"). Each of Merrill Lynch and Raser shall have the right, by providing written notice to the other party (a "Commitment Termination Notice") within ten (10) Trading Days after receipt by Merrill Lynch of a Change in Control Notice, to terminate the Commitment Letter. If either party delivers to the other party a Commitment Termination Notice within such ten (10) Trading Day period, the Commitment Letter shall automatically terminate as of the fifth (5th) Trading Day immediately preceding the Change in Control (the "Change in Control Termination Date") and, notwithstanding anything herein or in any applicable Warrant Agreement to the contrary, the number of Non-ROFR Warrants granted pursuant to subparagraph 7(a) with respect to any RF Projects that represent and are included within the calculation of Remaining Geothermal Capacity (determined as of the date immediately preceding the Change in Control Termination Date ) but which have not yet vested shall automatically vest and become immediately exercisable at or anytime after 9 a.m. New York City time on the Change in Control Termination Date without any further action by Raser or Merrill Lynch (for the avoidance of doubt, the calculation of such number of Non-ROFR Warrants shall assume that Merrill Closings will occur with respect to any RF Projects that represent and are included in the calculation of Remaining Geothermal Capacity as of the date immediately preceding the Change in Control Termination Date).

(e) Additional Terms of the Warrants. Each Warrant (i) shall expire seven (7) years after the Effective Date, and (ii) shall be immediately exercisable at the time of vesting. Each grant of Warrants provided for in this Paragraph 7 shall be granted pursuant to a warrant agreement between Raser and Merrill Lynch substantially in the form of Annex 3 attached hereto incorporating the terms set forth herein (each a "Warrant Agreement"). Other than pursuant to an Exempt Issuance as defined in the Warrant Agreement, if at any time after the Effective Date and prior to the grant of any ROFR Warrants pursuant to subparagraph 7(b), Raser sells or grants an option to purchase or otherwise dispose of or issue any Raser Common Stock or Raser Common Stock equivalents entitling any person to acquire shares of Raser Common Stock, at an effective price per share less than the exercise price applicable to such ROFR Warrants set forth in subparagraph 7(b) at the t ime such ROFR Warrants are granted (the "Dilutive Issuance"), then, at the time such ROFR Warrants are granted, the exercise price applicable to such ROFR Warrants shall be reduced by multiplying the applicable exercise price of such ROFR Warrants set forth in subparagraph 7(b) by a fraction, the numerator of which shall be the sum of the number of shares of Raser Common Stock issued and outstanding immediately prior to the Dilutive Issuance plus the number of shares of Raser Common Stock and Raser Common Stock equivalents that the aggregate consideration received in connection with such Dilutive Issuance would purchase at the exercise price of such ROFR Warrants set forth in subparagraph 7(b), and the denominator of which shall be the sum of the number of shares of Raser Common Stock issued and outstanding immediately prior to the Dilutive Issuance plus the number of shares of Raser Common Stock and Raser Common Stock equivalents issued or issuable in connection with the Dilutive Issuance.< /p>

8. Information and Investigations

1. Each of Truckee (for purposes of this Paragraph 8, only as to and in connection with the Project) and Raser hereby represents and covenants that (i) all information and data (excluding financial and operational projections) that have been or will be made available in written or electronic form by it or any of its respective affiliates, representatives or advisors to Merrill Lynch or any prospective or actual financier or purchaser of Warrants (whether a note purchaser, lender, potential provider of tax equity financing, or any other similar person; each such financier or purchaser, in such capacity is referred to herein as a "Purchaser" and such Purchasers being collectively referred to herein as "Receiving Purchaser") for the Truckee Transaction or any of the other transactions contemplated hereby (the "Information") is and will be, taken as a whole, complete and correct in all material respects and does not and will not, taken as a whole, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make such Information not misleading in light of the circumstances under which such Information is provided, and (ii) all financial or operational projections concerning Truckee and the transactions contemplated hereby that (A) have been made or will be prepared by it or any of its respective affiliates, or pursuant to its or any of its respective affiliates' request and direction and (B) have been or will be made available in written or electronic form to Merrill Lynch or any Receiving Purchaser for the Truckee Transaction or any of the other transactions contemplated hereby (the "Projections"), have been and will be reasonably prepared and reflect the then best currently available estimates and judgment of it and its respective affiliates. Notwithstanding the foregoing, Raser and Truckee make no, and disclaim any and all, representations or warranties as to any Projectio ns prepared or made by any third party (i.e. a non-affiliate of Raser) advisors or representatives, or by Merrill Lynch or any Receiving Purchaser (or any of their respective affiliates, representatives or advisors), and any professional judgments or conclusions of third party (i.e. a non-affiliate of Raser) advisors or representatives, or of Merrill Lynch or any Receiving Purchaser (or any of their respective affiliates, representatives or advisors), as may be contained in any Information or Projections delivered or made available hereunder; provided, however, that the foregoing limitation and disclaimer shall not apply to Information supplied (or omitted) by Raser or Truckee, as the case may be, upon which such Projections or such professional judgments or conclusions are based.
2. Raser recognizes and consents to the fact that Merrill Lynch (i) does not assume responsibility for the accuracy or completeness of the Information or such other information and (ii) has no obligation to undertake an independent evaluation, appraisal or physical inspection of any parts of the Information provided by Raser.
3. Raser and its affiliates hereby acknowledge that (i) Merrill Lynch may make Information and Projections available to a potential or actual Purchaser under a Project Financing (including the Truckee Commitment) through posting on IntraLinks or other similar electronic data site and (ii) certain of the proposed Purchasers may be "public-side" Purchasers (i.e., Purchasers that do not wish to receive material non-public information with respect to Raser, Truckee or their respective affiliates) (each, a "Public Purchaser"). Raser and its affiliates hereby agree that (A) they will use commercially reasonable efforts to identify that portion of the Information and Projections that may be distributed to the Public Purchasers and include a reasonably detailed term sheet in such Information and Projections and that all of the foregoing that is to be made available to Public Purchasers shall be clearly and conspicuously marked "PUBLIC& quot;; (B) by marking materials "PUBLIC," they shall be deemed to have authorized Merrill Lynch and the proposed Purchasers to treat such materials as not containing any material non-public information with respect to Raser, Truckee and their respective affiliates for purposes of United States federal and state securities laws, it being understood that certain of such materials may be subject to the confidentiality requirements of the definitive credit documentation; (C) all materials marked "PUBLIC" are permitted to be made available in such electronic data site designated for "Public Purchasers;" and (D) Merrill Lynch shall be required to treat any materials that are not marked "PUBLIC" as being suitable only for posting to such data sites not designated for "Public Purchasers." Upon reasonable advance request, Merrill Lynch agrees to provide Raser with reasonable access to such electronic postings.

9. Indemnity

1. Truckee (for all purposes of this Paragraph 9, only as to and in connection with the Project) and Raser agree to indemnify and hold harmless Merrill Lynch, each other Receiving Purchaser and their respective affiliates, and each such person's respective officers, directors, employees, agents and controlling persons (Merrill Lynch and each such other person being an "Indemnified Party") from and against any and all direct losses, claims, damages, costs, expenses and liabilities, joint or several, arising or resulting from any pending or threatened claim, action, proceeding or investigation brought by any person, including any shareholder derivative action brought on behalf of Raser or its affiliates (but excluding any claim, action, proceeding or investigation brought directly by Raser or any of its affiliates) or governmental body against the Indemnified Party related to or arising out of or in connection with this Commitment Letter, the Sen ior Secured Financing, the loans thereunder and the use of proceeds therefrom, the Truckee Transaction or any related transaction, any of the Geothermal Projects, the performance by any Indemnified Party of the services contemplated hereby or such Indemnified Party's obligations in accordance with the terms hereof or Merrill Lynch's exercise of its Right to Finance in accordance with the terms hereof, and Raser will reimburse each Indemnified Party for any and all expenses (including reasonable attorneys' fees and expenses) as they are incurred in connection with the investigation of or preparation for or defense of any such claim, action, proceeding or investigation, whether or not the Truckee Transaction (or with respect to a Geothermal Project, a Project Financing) is consummated, or the Truckee Commitment or this Commitment Letter is terminated; provided, however, that Raser shall not indemnify or hold harmless the Indemnified Parties with respect to loss of, or allocation of, any tax attri butes related to the Tax Equity Transaction, including without limitation depreciation, amortization and production tax credits. Notwithstanding the foregoing, Raser's and Truckee's obligations under this Paragraph 9 shall not apply to losses, claims, damages, costs, expenses and liabilities to the extent determined by a final judgment of a court of competent jurisdiction to relate to or arise out of or in connection with the Indemnified Party's bad faith, gross negligence or willful misconduct. To the extent that Raser and/or Truckee make any payments hereunder to any Indemnified Party in respect of losses, claims, damages, costs, expenses and liabilities that are subsequently determined by a final judgment of a court of competent jurisdiction to relate to or arise out of or in connection with the Indemnified Party's bad faith, gross negligence or willful misconduct, Merrill Lynch will promptly pay over and return such amounts to Raser and/or Truckee, as the case may be. Raser, Truckee and Merrill Lynch also agree that no party hereto, whether under this Paragraph 9 or otherwise, will have any liability to any other party hereto or to an Indemnified Party for, and no party hereto or Indemnified Party will or will be entitled to assert any claim against another party hereto for, special, indirect, consequential, punitive or exemplary damages on any theory of liability in connection in any way with this Commitment Letter, the Senior Secured Financing, the loans thereunder or the use of proceeds therefrom, the Truckee Transaction or any related transaction, any of the Geothermal Projects or the performance by any party of its obligations hereunder. Notwithstanding any other provision of this Commitment Letter, no party hereto (in such capacity, the "First Party") shall be liable to any other party hereto for any damages arising from the use by third parties of information or other materials of such other party obtained through electronic data site postings, except to the extent such in formation or other materials were obtained as a result of the First Party's bad faith, gross negligence or willful misconduct.
2. With respect to any indemnification involving the Truckee Transaction, if the indemnification of an Indemnified Party hereunder is for any reason unavailable to hold harmless an Indemnified Party in accordance with the terms of Paragraph 9(a), then Raser and Truckee agree to contribute, on a joint and several basis, to the aggregate amount of any such losses, claims, damages, costs, expenses and liabilities subject to indemnification under Paragraph 9(a), as incurred, in such proportion as is appropriate to reflect the relative benefits to Raser and/or Truckee, on the one hand, and Merrill Lynch and any other Indemnified Parties, on the other hand, from the Truckee Transaction (whether or not the Truckee Transaction is consummated), and also the relative fault of Raser and Truckee, on the one hand, and Merrill Lynch and any other Indemnified Parties, on the other hand, in connection with such losses, claims, damages, costs, expenses and liabilities, as well as any other relevant equita ble considerations. With respect to any indemnification involving any matter other than the Truckee Transaction, if the indemnification of an Indemnified Party hereunder is for any reason unavailable to hold harmless an Indemnified Party in accordance with the terms of Paragraph 9(a), then Raser agrees to contribute to the aggregate amount of any such losses, claims, damages, costs, expenses and liabilities subject to indemnification under Paragraph 9(a), as incurred, in such proportion as is appropriate to reflect the relative benefits to Raser, on the one hand, and Merrill Lynch and any other Indemnified Parties, on the other hand, from such transaction as evidenced by a Financing Commitment with Merrill Lynch therefor (if any such Financing Commitment exists and whether or not the transaction contemplated by such Financing Commitment is consummated), and also the relative fault of Raser, on the one hand, and Merrill Lynch and any other Indemnified Parties, on the other hand, in connection with such losse s, claims, damages, costs, expenses and liabilities, as well as any other relevant equitable considerations. No person found liable for a fraudulent misrepresentation shall be entitled to contribution from any other person who is not also found liable for such fraudulent misrepresentation.
3. Raser and Truckee agree that, without Merrill Lynch's prior written consent, none of Raser, Truckee or any of their respective affiliates or subsidiaries will settle, compromise or consent to the entry of any judgment in any pending or threatened claim, action, proceeding or investigation that is subject to indemnification pursuant to Paragraph 9(a) ("Proceeding"), unless such settlement, compromise or consent (i) includes a full and unconditional written release in form and substance satisfactory to the applicable Indemnified Parties of each such Indemnified Party from all liability arising out of such claim, action, proceeding or investigation together with any other claim, action, proceeding or investigation involving the same parties to the Proceeding that arise out of the same facts and circumstances underlying the Proceeding being settled and (ii) does not include any statement as to or an admission of fault, culpability or failure to act by or on beh alf of any such Indemnified Party.
4. The indemnity provided for herein shall remain in full force and effect notwithstanding expiration or termination of the Truckee Commitment or this Commitment Letter (for whatever reason); provided, however, that such indemnity shall have no effect as to matters relating to any Geothermal Project (including the Project and any project that has ever been considered a Geothermal Project under this Commitment Letter) that are or become the subject of a Financing Commitment entered into by Raser or its affiliates on one hand and Merrill Lynch on the other hand, or a Merrill Closing, it being acknowledged and agreed that the Financing Commitment and/or definitive documents entered into in connection with each such Project Financing will supercede and replace this Commitment Letter with respect to such Geothermal Project and Project Financing.

10. Confidentiality; Publicity

This Commitment Letter and its contents and the activities of the parties hereto and their respective affiliates pursuant this Commitment Letter are confidential and shall not be disclosed by or on behalf of any such party or any of their respective affiliates to any person without the other party's prior written consent, except that any party hereto may disclose this Commitment Letter (a) to its respective affiliates, officers, directors, employees and advisors, and then only in connection with the Truckee Transaction and other transactions contemplated hereby and on a confidential need-to-know basis, (b) to any Purchaser, provided that such Purchaser shall execute a confidentiality agreement requiring such Purchaser to maintain the confidentiality of the information to the same extent as required hereunder and (c) as required by applicable law, regulatory or self-regulatory authority, including without limitation, the rules of any stock exchange on which such party's securi ties are listed or compulsory legal process (based on the advice of legal counsel), or requested by governmental authorities; provided, however, that in the event of any compulsory legal process the party seeking to disclose such information shall give the other parties hereto prompt notice thereof and cooperate with such other parties in securing a protective order in the event of compulsory disclosure and that any disclosure made pursuant to public filings (whether pursuant to the rules of any stock exchange or otherwise) shall be subject to such other parties' prior review. Without limiting the generality of the foregoing, each party hereto agrees to permit the other party to review and approve any reference to such other party or any of its affiliates in connection with the Truckee Transaction, the Right to Finance, the Geothermal Projects or any of the transactions contemplated hereby contained in any press release or similar public disclosure prior to public release. Notwithstanding any thing in this Agreement to the contrary, Raser and Truckee agree that Merrill Lynch may use and may share information concerning Raser, Truckee and their respective subsidiaries and affiliates among Merrill Lynch solely in connection with the evaluation and consummation of the Truckee Transaction and any other transactions contemplated hereby, the performance of Merrill Lynch's services and obligations hereunder and Merrill Lynch's Right to Finance. Raser and Truckee also acknowledge that Merrill Lynch may be providing debt financing, equity capital or other services (including financial advisory services) to parties whose interests may conflict with the interests of Raser, Truckee or their respective affiliates including with respect to the Geothermal Projects. Merrill Lynch agrees that it will not furnish confidential information obtained from Raser or Truckee to any of Merrill Lynch's other customers or any other party and that Merrill Lynch will treat confidential information relating to Raser, Truckee and their respective affiliates with the same degree of care as Merrill Lynch treats its own confidential information. Merrill Lynch will not make available to Raser, Truckee or their respective affiliates confidential information that Merrill Lynch has obtained or may obtain from any other customer. Notwithstanding the foregoing or anything in this Commitment Letter to the contrary, to comply with Treasury Regulations Section 1.6011-4(b)(3), each party hereto (and any employee, representative or other agent of such party) may disclose to any and all persons or entities, without limitation of any kind, the U.S. federal income tax treatment and tax structure of the Truckee Transaction or any other Project Financing or related transaction contemplated herein, it being understood and agreed, for this purpose, (1) the name of, or any other identifying information regarding (a) Truckee or other project company or any existing or future investor (or any affiliate thereof) in Truckee or other project company, or (b) any investment or transaction entered into by Truckee or other project company; (2) any performance information relating to Truckee or other project company or its respective investments; and (3) any performance or other information relating to investments sponsored by Truckee or other project company, does not constitute such tax treatment or tax structure information.

11. Termination of the Truckee Commitment and the Commitment Letter

(a) Termination of the Truckee Commitment. The Truckee Commitment shall expire on the earliest to occur of (i) the effectiveness of the Truckee Transaction Documents, and (ii) June 30, 2008, unless extended by mutual agreement of the parties; provided, however, the provisions of Paragraphs 1, 2 and 5 through 18 will survive any expiration or termination of the Truckee Commitment.

(b) Termination of this Commitment Letter. Either Merrill Lynch or Raser may terminate this Commitment Letter in any of the following circumstances: (i) effective upon delivery of written notice of termination, if the other of them experiences a Bankruptcy Event; (ii) as provided in Paragraph 7(d)(x); (iii) effective upon delivery of written notice of termination after such time as no geothermal projects are subject to the Right to Finance or the ROFR as provided herein; (iv) effective upon delivery of written notice of termination in the circumstances described in Paragraph 3(h); (v) effective upon delivery of written notice of termination after the expiration of five (5) years following the Effective Date; provided, however, the last sentence of Paragraph 1(i) and all of Paragraphs 5, 6, 7(d) and 8 through 18 will survive any termination of this Commitment Letter. For purposes hereof, a "Bankruptcy Event" means, with respec t to a person (in such capacity, the "Subject"): (A) the filing of a petition by or against the Subject as "debtor" under Title 11 of the United States Code (the "Bankruptcy Code") seeking the adjudication of the Subject as bankrupt or the appointment of a trustee, receiver, or custodian of the Subject's assets and in case of a petition filed against the Subject, such filing not having been withdrawn or dismissed within thirty (30) days after the date of such filing; (B) the making by the Subject of a general assignment for the benefit of creditors; (C) the entry of an order, judgment, or decree by any court of competent jurisdiction appointing a trustee, receiver, or custodian to take possession of or control over the assets of the Subject unless such proceedings and the person appointed are dismissed within thirty (30) days after the date upon which the court issued its order, judgment, or decree; or (D) the determination by the Bank ruptcy Court or the written admission of the Subject that the Subject is generally unable to pay its debts as they become due within the meaning of Section 303(h)(l) of the Bankruptcy Code. In addition, Raser may terminate this Commitment Letter effective upon delivery of written notice of termination after a total of five (5) of any combination of Similar Project Passes, Project Passes and/or the failure to close and fund any Project Financing for which Merrill Lynch has delivered a Financing Commitment entered into by Raser or its affiliates on one hand and Merrill Lynch on the other hand, unless such failure is due solely to a breach or default by Raser or its affiliates or the failure of Raser or its affiliates to satisfy a condition precedent to the closing or initial funding thereof.

12. Assignment; No Third-Party Beneficiaries; No Fiduciary; Etc.

1. This Commitment Letter and the Truckee Commitment shall not be assignable by any party hereto (other than by Merrill Lynch to its affiliates) without the prior written consent of the other parties hereto, and any attempted assignment shall be void and of no effect; provided, however, that nothing contained in this Paragraph 12 shall prohibit Merrill Lynch (in its sole discretion) from (i) performing any of its duties provided for hereunder through any of its affiliates, and Raser and Truckee will owe any related duties provided for hereunder to any such affiliate, and (ii) selling (in consultation with Raser and Truckee) assignments of all or a portion of the Truckee Commitment pursuant to arrangements satisfactory to Merrill Lynch (provided that the terms of such arrangements do not limit any right or create any additional obligation of Truckee or Raser other than as contemplated by this Commitment Letter without their prior written consent in their sole di scretion). The limitation on assignment provided for herein shall have no effect as to a Financing Commitment entered into by Raser or its affiliates on one hand and Merrill Lynch on the other hand, or a Merrill Closing, it being acknowledged and agreed that the Financing Commitment and/or definitive documents entered into in connection with each such Project Financing will supercede and replace this Commitment Letter with respect to such Geothermal Project and Project Financing.
2. This Commitment Letter is solely for the benefit of the parties hereto and does not confer any benefits upon, or create any rights in favor of, any other person, except to the extent expressly set forth herein.
3. In connection with all aspects of each transaction contemplated by this Commitment Letter, Merrill Lynch, Raser and Truckee each acknowledges and agrees, and acknowledges their respective affiliates' understanding, that (i) the matters set forth in this Commitment Letter constitute an arm's-length commercial transaction, between Raser and Truckee, on the one hand, and Merrill Lynch, on the other hand, (ii) in connection with each such transaction and the process leading thereto, Merrill Lynch will act solely as a principal and not as agent (except as otherwise expressly provided herein) or fiduciary of Raser or Truckee or their respective stockholders, affiliates, creditors, employees or any other party, (iii) Merrill Lynch will not assume an advisory or fiduciary responsibility in favor of Raser or Truckee or any of their respective affiliates with respect to any of the transactions contemplated hereby or the process leading thereto (irrespective of whether Merrill Lynch has advised o r is currently advising Raser or Truckee on other matters) and Merrill Lynch will not have any obligation to Raser or Truckee or any of their respective affiliates with respect to the transactions contemplated in this Commitment Letter except the obligations expressly set forth herein, (iv) neither Raser nor Truckee will have any obligation to Merrill Lynch with respect to the transactions contemplated in this Commitment Letter except the obligations expressly set forth herein, (v) Merrill Lynch may be engaged in a broad range of transactions that involve interests that conflict with those of Raser and Truckee and their respective affiliates, (vi) Merrill Lynch has not provided and will not provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby and Raser and Truckee have consulted and will consult their own legal, accounting, regulatory, and tax advisors, to the extent they deem appropriate, and (vii) neither Raser nor Truckee has provided or will provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby and Merrill Lynch has consulted and will consult its own legal, accounting, regulatory, and tax advisors, to the extent it deems appropriate. Each of the parties hereto (on their own behalf and on behalf of their respective affiliates) hereby waives and releases, to the fullest extent permitted by law, any claims that it may have against any other party hereto with respect to any breach or alleged breach of fiduciary duty.

13. Governing Law; Waiver of Jury Trial

1. This Commitment Letter shall be governed by, and construed in accordance with, the laws of the State of New York (without regard to conflicts of laws provisions thereof other than Sections 5-1401 and 5-1402 of the New York General Obligations law). Any legal action or proceeding with respect to this Commitment Letter, the Truckee Transaction or the other transactions contemplated hereby, or the performance by Merrill Lynch of the services contemplated hereby, shall be brought in the courts of the State of New York in New York County or of the United States for the Southern District of New York, and, by execution and delivery of this Commitment Letter, the parties accept the exclusive jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any final judgment rendered thereby in connection with this Commitment Letter, the Truckee Transaction or the other transactions contemplated hereby, or the performance by Merrill Lynch of the services contemplated hereby, from which no appeal has been taken or is available.
2. WAIVER OF JURY TRIAL. EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION, CLAIM OR PROCEEDING RELATING TO THIS COMMITMENT LETTER, THE TRUCKEE TRANSACTION, THE OTHER TRANSACTIONS CONTEMPLATED HEREBY, OR THE PERFORMANCE BY MERRILL LYNCH OF THE SERVICES CONTEMPLATED HEREBY. EACH PARTY (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF SUCH A SUIT, ACTION, CLAIM OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HAVE BEEN INDUCED TO ENTER INTO THIS COMMITMENT LETTER, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH.

14. Amendments; Counterparts; etc.

No amendment or waiver of any provision of this Commitment Letter shall be effective unless in writing and signed by the parties hereto and then only in the specific instance and for the specific purpose for which given. This Commitment Letter, the Fee Letter and the Registration Rights Agreement are the only agreements between the parties hereto with respect to the matters contemplated hereby and thereby and set forth the entire understanding of the parties with respect thereto. This Commitment Letter may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart by telecopier or portable document format shall be effective as delivery of a manually executed counterpart.

15. Patriot Act.

Merrill Lynch hereby notifies Raser and Truckee that pursuant to the requirements of the USA Patriot Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the "Patriot Act"), the holders of the notes or other debt instruments issued pursuant to or in connection with this Commitment Letter (each, a "Truckee Noteholder") may be required to obtain, verify and record information that identifies Raser and Truckee, which information includes the name, address and tax identification number and other information regarding them that will allow such Truckee Noteholder to identify them in accordance with the Patriot Act. This notice is given in accordance with the requirements of the Patriot Act and is effective as to the Truckee Noteholders.

16. Public Announcements; Notices.

1. Notwithstanding anything to the contrary in this Commitment Letter or any other document related hereto, Merrill Lynch may, subject to the prior consent of Raser (not to be unreasonably withheld, delayed or conditioned) at Merrill Lynch's expense, publicly announce as Merrill Lynch may choose the capacities in which Merrill Lynch has acted hereunder.
2. Any notice given pursuant to this Commitment Letter shall be in writing and delivered by a recognized overnight delivery service (charges prepaid and confirmation of delivery required), or by registered or certified mail with return receipt requested (postage prepaid), if to (i) Raser or Truckee, at the address set forth on page one hereof, with a copy to Raser Technologies, Inc., 5152 North Edgewood Drive, Provo, Utah 84604, Attention: General Counsel; and (ii) Merrill Lynch, Pierce, Fenner & Smith Incorporated, at the following addresses: World Financial Center, North Tower, 250 Vesey Street, New York, New York 10281, Attention: John McGreevey, and 4 World Financial Center, 7th floor, New York, New York 10080, Attention: Ron Torok. All notices shall be deemed delivered: (a) one (1) Business Day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt , or (b) four (4) Business Days after having been sent by registered or certified mail.

17. Representations and Warranties

1. By Raser. Raser hereby represents and warrants to Merrill Lynch that as of the Effective Date:

1. Each of Raser and Truckee is duly organized and validly existing in good standing under the laws of the State of Delaware.
2. Each of Raser and Truckee has the requisite corporate power and authority to enter into and perform its obligations under each of the following documents to which it is a party (collectively referred to as the "Commitment Documents"): the Commitment Letter, the Fee Letter, the Registration Rights Agreement and each additional warrant agreement to be entered into pursuant to Paragraph 7 hereof (each, a "Future Warrant Agreement"). The execution and delivery of the Commitment Documents by each of Raser and Truckee and the consummation by Raser of the transactions contemplated hereby and thereby, including, without limitation, the grant by Raser of the Warrants pursuant to the Future Warrant Agreements, and the reservation for issuance and the issuance of Raser Common Stock issuable upon exercise of the Warrants, have been duly authorized by Raser's Board of Directors and Truckee (as applicable) and (other than the filing with the Securities and Exchang e Commission ("SEC") of one or more Registration Statements pursuant to Raser's obligations under the Registration Rights Agreement and such filings as may be required by the New York Stock Exchange Arca or any successor thereto (the "Principal Market") with respect to the transactions contemplated hereby, by the Future Warrant Agreements) no further consent or authorization is required by Raser, its Board of Directors, its stockholders or Truckee in connection with the transactions or matters contemplated by the Commitment Documents. This Commitment Letter and the other Commitment Documents have been (and with respect to the Future Warrant Agreements, will have been) duly executed and delivered by Raser and Truckee, and constitute the legal, valid and binding obligations of Raser and Truckee, enforceable against Raser and Truckee in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies.
3. The Warrants are (or when granted pursuant to the terms hereof, will be) duly authorized and free from all taxes, liens and charges with respect to the issue thereof. The shares of Raser Common Stock issuable upon exercise of the Warrants have been duly authorized and reserved for issuance, free of pre-emptive rights, and sufficient for the purpose of enabling Raser to satisfy all obligations to issue the Raser Common Stock as and when required by this Commitment Letter and any Future Warrant Agreement. Upon issuance in accordance with any Future Warrant Agreement, the Raser Common Stock will be validly issued, fully paid and nonassessable and free from all preemptive or similar rights, taxes, liens and charges with respect to the issue thereof, with the holders thereof being entitled to all rights accorded to a holder of Raser Common Stock. The offer and issuance by Raser of the Warrants and the Raser Common Stock issuable upon exercise of the Warrants are exempt from registration under the Securities Act of 1933, as amended.
4. The execution, delivery and performance of the Commitment Documents by Raser and Truckee and the consummation by Raser and Truckee of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Warrants and reservation for issuance and issuance of the Raser Common Stock issuable upon exercise of the Warrants) do not and will not (A) result in a violation of the Certificate of Incorporation, Bylaws, Certificate of Formation or other organizational documents of Raser or Truckee (as applicable), (B) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which Raser or Truckee is a party or by or to which any of their assets are bound or affected, or (C) result in a violation of any law, rule, regulation, order, judgment or decree (including federal a nd state securities laws and regulations and the rules and regulations of the Principal Market) applicable to Raser or Truckee or by which any property or asset of Raser or Truckee is bound or affected, except, in the case of subclause (B), such conflicts, defaults, rights, or violations that would not reasonably be expected to have a material adverse effect on the business, condition (financial or otherwise), operations, performance, assets, liabilities (contingent or otherwise) or prospects of Raser or Truckee.
5. Raser and Truckee have obtained all consents, authorizations or orders of, or made all filings or registrations with, any court, governmental agency or any regulatory or self-regulatory agency or any other person required in order for such party to execute, deliver or perform any of its obligations under or contemplated by the Commitment Documents, in each case in accordance with the terms hereof or thereof, other than as may be required by federal and state securities laws and rules and regulations of the Principal Market with respect to Raser's obligations under the Registration Rights Agreement, which consents, authorizations, orders, filings or registrations shall be made or obtained pursuant to and in accordance with the Registration Rights Agreement.

2. By Merrill Lynch. Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Signatory") hereby represents and warrants to Raser that as of the Effective Date:

1. Merrill Signatory is duly organized and validly existing in good standing under the laws of the State of Delaware.
2. Merrill Signatory has the requisite corporate power and authority to enter into and perform its obligations under the Commitment Documents. The execution and delivery of the Commitment Documents by Merrill Signatory and the consummation by Merrill Signatory of the transactions contemplated hereby and thereby have been duly authorized by Merrill Signatory's Board of Directors and no further consent or authorization is required by Merrill Signatory, its Board of Directors or its stockholders. This Commitment Letter and the other Commitment Documents have been duly executed and delivered by Merrill Signatory, and constitute the legal, valid and binding obligations of Merrill Signatory, enforceable against Merrill Signatory in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement o f applicable creditors' rights and remedies.
3. The execution, delivery and performance of the Commitment Documents by Merrill Signatory and the consummation by Merrill Signatory of the transactions contemplated hereby and thereby do not and will not (A) conflict with or result in a violation of the Certificate of Incorporation or Bylaws of Merrill Signatory, (B) conflict with, violate or result in any breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which Merrill Signatory is a party or by which it or any of its material assets is bound or affected, or (C) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and the rules and regulations of applicable securities exchanges) applicable to Merrill Signatory or by which any property or asset of Merrill Signatory is bound or affected, except, in the case of subclause (B), such conflicts, defaults, rights, or violations that would not reasonably be expected to have a material adverse effect on the business, condition (financial or otherwise), operations, performance, assets, liabilities (contingent or otherwise) or prospects of Merrill Signatory.
4. Merrill Signatory has obtained all consents, authorizations or orders of, or made all filings or registrations with, any court, governmental agency or any regulatory or self-regulatory agency or any other person required in order for such party to execute, deliver or perform any of its obligations under or contemplated by the Commitment Documents, in each case in accordance with the terms hereof or thereof.

18. Certain Definitions; Rules of Interpretation; Severability