Exhibit 10.1

Execution Version

AMENDMENT, CONSENT AND FORBEARANCE AGREEMENT

THIS AMENDMENT, CONSENT AND FORBEARANCE AGREEMENT (this “Forbearance Agreement”)
is made and entered into on the 9th day of July, 2010 (the “Effective Date”), by
and among THERMO NO. 1 BE-01, LLC, a Delaware limited liability company (the
“Company”), THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, as Administrative
Lender (the “Administrative Lender”), THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA AND ZURICH AMERICAN INSURANCE COMPANY (the “Lenders”), DEUTSCHE BANK
TRUST COMPANY AMERICAS, as Administrative Agent (the “Administrative Agent”) and
Collateral Agent (the “Collateral Agent”), and (for the limited purposes set out
in Sections 4, 6, 8, 10, 11, 13 and 14 of this Forbearance Agreement) Raser
Technologies, Inc.

W I T N E S S E T H :

WHEREAS, the Company, the Administrative Agent, the Lenders and the
Administrative Agent are parties to that certain Credit Agreement dated as of
August 31, 2008 (as heretofore amended, the “Agreement”) entered into for the
purpose of financing certain costs for the design, development, construction,
installation, financing, testing, start-up and commissioning of the Facility;

WHEREAS, prior to June 29, 2010 Raser performed the Availability Prove-Out and
the Capacity Prove-Out required by Sections 7.1 and 7.2 of the EPC Agreement;

WHEREAS, as a result of the Availability Prove-Out and the Capacity Prove-Out
described above, Facility Substantial Completion and Final Completion were not
achieved which resulted, among other things, in a requirement that the Company
pay the Obligations in full on June 30, 2010, which date was the Guaranteed
Final Completion Date prior to the amendment of that term pursuant to that
certain Schedule Z Amendment dated as of June 30, 2010 (the “June 30
Amendment”);

WHEREAS, as a result of the June 30 Amendment, the Guaranteed Final Completion
Date has been extended to July 9, 2010;

WHEREAS, on such extended Guaranteed Final Completion Date, a Credit Agreement
Event of Default will occur and, as a result thereof and in the absence of this
Forbearance Agreement, the Company would be obligated pursuant to the Agreement
to pay the Obligations in full, and the amount of the Obligations would exceed
the aggregate amounts in the Development Account and the other Security Accounts
under the Account and Security Agreement;

WHEREAS, the Company has requested that the Administrative Lender, the
Administrative Agent and the Collateral Agent agree to the amendment of the
Account and Security Agreement in order that (i) all funds (if any) in any
Security Account, other than the Distribution Account, be transferred to the
Development Account on the Guaranteed Final Completion Date, (ii) the amount to
be disbursed from the Development Account (after giving effect to the
above-mentioned transfers thereto) on the Guaranteed Final Completion Date and
applied at such time to the Obligations will be only $27,000,000 rather than the
full amount of the Obligations, and (iii) the funds remaining in the Development
Account, after payment of such $27,000,000, and funds from time to time in the
Revenue Account, will be transferred to the O&M Account under the Account and
Security Agreement and, subject to the terms and conditions of the Account and
Security Agreement, used for the payment of approximately $450,000 of accrued
accounts payable and for the making of future payments for the operation,
maintenance and preparation for sale of the Facility (including the payment of
the expenses, including legal fees, of the Administrative Lender and the Agent)
pending the sale of the Facility, or the sale of the equity interests in the
Company, as contemplated by this Forbearance Agreement;

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

WHEREAS, the Company desires that the Administrative Lender, the Administrative
Agent and the Collateral Agent (i) consent to the amendment of the Account and
Security Agreement as described above, and (ii) waive compliance by the Company
with certain Sections of the Agreement;

WHEREAS, the Company desires that the Lenders, the Administrative Lender and the
Administrative Agent forbear, subject to the terms and provisions of this
Forbearance Agreement, from exercising their rights and remedies (whether
directly or through the Collateral Agent) with respect to the Credit Agreement
Events of Default existing under the Agreement and described on Exhibit A
attached hereto (the “Specified Defaults”);

WHEREAS, the Administrative Lender has directed the Administrative Agent and the
Collateral Agent to enter into this Agreement;

WHEREAS, Raser is entering into this Forbearance Agreement for the limited
purposes set out herein; and

WHEREAS, the Company, the Lenders, the Administrative Lender, the Administrative
Agent and the Collateral Agent desire to amend the Agreement in certain respects
as set forth herein.

NOW, THEREFORE, in consideration of the agreements and covenants set forth
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

Section 1. Defined Terms. Any capitalized term used in this Forbearance
Agreement but not otherwise defined in this Forbearance Agreement shall have the
meaning ascribed to such term in the Agreement, including by reference to
Schedule Z.

Section 2. Consent. Effective as of the Effective Date, the Administrative
Lender hereby consents to the amendment of the Account and Security Agreement,
such amendment being dated as of the date hereof. The Administrative Lender
hereby waives any claim that such action will constitute a Credit Agreement
Event of Default , specifically including but not limited to a Credit Agreement
Event of Default under Section 7.3.1 of the Agreement arising from a failure to
observe or the covenant in Section 6.16 of the Agreement.

 

-2-

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

Section 3. Waivers. Effective as of the Effective Date, the Administrative
Lender hereby waives compliance by the Company with Section 2.6.3 of the
Agreement, the requirement in Section 5.1.1 of the Agreement that the audited
financial statements of the Company not contain a “going concern” or like
qualification or exception, 5.1.5 of the Agreement, clauses (i) and (iv) of
Section 5.1.11 of the Agreement, Section 5.2 of the Agreement, and Section 5.11
of the Agreement (but only if, not later than 14 days after the Effective Date,
the Company delivers to Prudential an operating plan and budget, in reasonable
detail, covering the period from July 1, 2010 through June 30, 2011).

Section 4. Forbearance. The Company and Raser acknowledge the existence of the
Specified Defaults, including the failure of Facility Substantial Completion and
Final Completion to be achieved. Subject to the terms and conditions set forth
herein, throughout the period commencing on the date of this Agreement and
ending on June 29, 2011 (the “Forbearance Period”), the Lenders, the
Administrative Lender, the Administrative Agent and the Collateral Agent (acting
at the written direction of the Administrative Lender) hereby agree to forbear
from exercising any and all available default rights and remedies under the
Agreement, the Notes. the Account and Security Agreement, the deeds of trust
creating the Liens described in Article XI of the Account and Security
Agreement, the Class B Investors Pledge Agreement and the Special Interest
Investors Pledge Agreement and at applicable law as the result of the occurrence
and continuance of the Specified Defaults. The Company and Raser acknowledge and
agree that the foregoing agreement to forbear exercising such default rights and
remedies throughout the Forbearance Period shall not constitute a waiver of the
Specified Defaults or a waiver of any other Credit Agreement Event of Default or
Credit Agreement Default that is not waived by Section 3 of this Forbearance
Agreement, and that the Lenders, the Administrative Lender, the Administrative
Agent and the Collateral Agent expressly reserve all such default rights and
remedies. The Company and Raser further acknowledge and agree that the Lenders,
the Administrative Lender, the Administrative Agent and the Collateral Agent may
exercise any and all such default rights and remedies at any time following the
earliest to occur of (a) the expiration of the Forbearance Period, (b) the
occurrence during the Forbearance Period of any additional Credit Agreement
Default or Credit Agreement Event of Default, other than those potential Credit
Agreement Defaults or Credit Agreement Events of Default expressly waived in
Section 3 of this Forbearance Agreement (including, without limitation, any
default under this Forbearance Agreement), or (c) any of MLE, Merrill Lynch,
Pierce, Fenner & Smith Incorporated (“MLP”), UTC, the Company, Raser or any of
their respective Affiliates takes any action against the Facility, any other
collateral for the Advances (including, without limitation, the additional
collateral described in Article XI of the Account and Security Agreement), the
Company or Raser or any of its Affiliates which the Administrative Lender
believes would materially adversely affect the interests of the Lenders, the
Administrative Lender, the Administrative Agent or the Collateral Agent (any of
the events described in clause (a), (b) or (c), a “Forbearance Termination
Event”).

 

-3-

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

Section 5. Modification of Certain Payment Obligations Under the Agreement Prior
to the Occurrence of a Forbearance Termination Event. Notwithstanding the
provisions of Sections 2.3, 2.5,2.6.2, 2.8, 2.9, 6.10 and 6.20 of the Agreement,
from and including the Effective Date until but not including the date of the
occurrence of a Forbearance Termination Event, (a) the aggregate respective
principal amounts of the Advances to be repaid on the dates set out in the
amortization schedule attached to the Agreement as Schedule 2.3 shall not be
required to be repaid on such dates, (b) interest on the Advances will accrue at
the rate of 7% per annum and will be payable in kind on each Pre-Completion
Interest Payment Date and on each Quarterly Transfer Date (if any) but will not
be added to the respective principal amounts of the Advances on which interest
will accrue, (c) if a Change of Control occurs in connection with a Qualifying
Sale (as defined in Section 6 below), the terms of Section 6 of this Forbearance
Agreement, rather than those of Section 2.6.2 or Section 6.20 of the Agreement,
will govern the prepayment obligations of the Company as a result thereof,
(d) if the Company sells all or substantially all its assets in a Qualifying
Sale, the terms of Section 6 of this Forbearance Agreement, rather than those of
Section 6.10 of the Agreement, will govern, and (e) the terms of Section 6 of
this Forbearance Agreement will govern the optional prepayment rights of the
Company with respect to the Advances. . From and after the occurrence of a
Forbearance Termination Event, interest on the Advances will be payable in cash
in Dollars, will accrue at the Default Rate and will be payable on demand.

Section 6. Sale of the Facility or the Equity Interests in the Company. The
Company and Raser hereby agree to use their commercially reasonable best efforts
to sell, not later than June 29, 2011, the Facility and the other collateral
described in Article XI of the Account and Security Agreement as an entirety or,
in the case of Raser, to use its commercially reasonable best efforts to cause
the Subsidiaries of Raser that are the owners of 100% of the Equity Interests in
the Company to sell all such Equity Interests as an entirety; provided, that
less than all the Facility and such other collateral, or less than all such
Equity Interests, may be sold in a transaction that otherwise qualifies as a
Qualifying Sale (as defined below) so long as the Lenders receive a $6,000,000
cash payment and all other requirements of the fourth sentence of this Section 6
are satisfied. Any such sale shall be solely for cash in Dollars and shall be
made to a solvent Person that (a) is not an Affiliate of the Company, Raser, any
Member in the Company, MLE, MLP, UTC or any other Person involved in the
operation or development of the Project, (b) is not described in Section 1603(g)
of ARRA, or described as being ineligible to receive payments under Section 1603
of ARRA or under any guidance, terms and conditions, frequently asked questions
or other materials issued by the Department of the Treasury under Section 1603
of ARRA (“Treasury Guidance”), (c) has the requisite experience and resources to
operate the Facility, and (d) agrees to operate the Facility continuously as
“specified energy property” as such term is defined in Section 1603(d) of ARRA,
and under any Treasury Guidance, through at least March 31, 2014 (a sale to any
such Person meeting the foregoing requirements being a “Qualifying Sale”).
Provided that no Forbearance Termination Event has occurred and is continuing at
the time of any Qualifying Sale, the Lenders and the Administrative Agent agree
to instruct the Collateral Agent in writing at such time to release its Liens
under the Financing Documents in respect of the Facility and the other
collateral described in Article XI of the Account and Security Agreement, or in
respect of the Equity Interests in the Company, as the case may be (and any
other collateral for the Obligations for which the Company has requested a lien
release), against (x) payment in cash in Dollars to the Lenders of (i) 50% of
the Net Proceeds (as hereafter defined) and (ii) all expenses (including legal
fees) of the Administrative Lender and the Agents, provided, that the aggregate
amount payable pursuant to subclause (i) of this sentence shall not exceed
$6,000,000, and (y) delivery to the Lenders, the Administrative Lender and the
Agents of a release which shall executed by the Company, Raser and all Members
in the Company and must be acceptable to the Administrative Lender and the
Agents (it being understood that a release containing the terms, mutatis
mutandis, of the release set out in Section 10 of this Forbearance Agreement
shall be acceptable). Upon payment, at any time prior to the occurrence of a
Forbearance Termination Event and whether from the Net Proceeds of a Qualifying
Sale as described above or from a cash payment from the Company or Raser, equal
to $6,000,000 plus the expenses (including legal fees) of the Administrative
Lender and the Agents (and regardless of whether there has been a Qualifying
Sale) and delivery of the releases, described in the preceding sentence, all
obligations of the Company and Raser to the Administrative Agent, the Lenders
and the Agents (other than those in Article IX of the Agreement and any others
that expressly survive repayment of the Obligations) shall be extinguished. As
used in this Section 6, “Net Proceeds” shall mean the gross proceeds of the sale
of the Project and the other collateral described in Article XI of the Account
and Security Agreement as an entirety, or the proceeds of the sale of all the
Equity Interests in the Company as an entirety, as the case may be, less the
normal and customary costs of selling the foregoing (with brokerage commissions
not to exceed 3% of the sales price and which may be payable only to Persons
that are not Affiliates of the Company, Raser, any Member in the Company, MLE or
any other Person involved in the operation or development of the Project).
Normal and customary closing costs shall consist of any legal and professional
fees and, in the case of the sale of the Facility and the other collateral
described in Article XI of the Account and Security Agreement, premiums for a
policy of owners’ title insurance but shall not include the payment of any Debt
or of any obligation secured by a Lien against the asset being sold. The
provisions of this Section 6 are in consideration for the amendments, consents,
waivers forbearances and other agreements under this Forbearance Agreement, and
such provisions shall not be deemed to create a joint venture, partnership or
other joint ownership arrangement or relationship between the Lenders (including
the Administrative Lender) and the Agents, on the one hand, and the Company,
Raser and the Members in the Company on the other hand, and in no event do the
parties intend, and in no event shall such provisions or any other portion of
this Forbearance Agreement or any other Transaction Document be construed, to be
an agreement by the Lenders (including the Administrative Lender) or the Agents
to share in any operating or other losses or costs incurred by the Company,
Raser or the Members in the Company or to be responsible, in any manner or to
any extent, for any liabilities of the Company, Raser or the Members of the
Company to any third party.

 

-4-

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

Section 7. Amendments to the Agreement. Effective as of the Effective Date, the
Agreement is hereby amended as set forth below:

(a) Amendment to Section 2.5. Section 2.5 of the Agreement is hereby amended by
deleting the first sentence thereof and by deleting “, at any time and from time
to time on or after the seventh (7th) anniversary of the Facility Substantial
Completion Date,” from the second sentence thereof.

(b) Amendment to Section 2.6.4. Section 2.6.4 of the Agreement is hereby deleted
and replaced with “[RESERVED]”.

(c) Amendment to Section 2.6.5. Section 2.6.5 of the Agreement is hereby amended
and restated in its entirety to read as follows:

Mandatory Prepayment. The Company, the Lenders and the Administrative Lender
acknowledge and agree that, in the absence of the Amendment, Consent and
Forbearance Agreement dated as of July 9, 2010, by and among the Company, the
Lenders, the Administrative Agent, the Collateral Agent and Raser (as from time
to time amended, the “Forbearance Agreement”), the full amount of the
Obligations (including the outstanding principal amount of the Advances, accrued
interest thereon and the Make-Whole Amount with respect to such principal
amount) would be due and payable on the Guaranteed Final Completion Date and
that the full amount of the Obligations exceeds the aggregate amount in the
Development Account and the other Security Accounts under the Account and
Security Agreement. As a result of the Forbearance Agreement, the Company
instead shall be required on the Guaranteed Final Completion Date to pay only
Obligations in the aggregate amount of $27,000,000, which amount is intended by
the parties to be disbursed pursuant to Section 3.9.3.1 of the Account and
Security Agreement on the Guaranteed Final Completion Date. Notwithstanding the
second sentence of Section 2.11.7, such $27,000,000 shall be applied by the
Lenders to $19,916,332.51 principal amount of the Advances, $51,964.10 of
accrued interest on the Advances from June 30, 2010 to the Guaranteed Final
Completion Date and the $7,031,703.39 of Make-Whole Amount with respect to such
principal amount. The remaining $9,777,440.42 principal amount of the Advances
shall continue to constitute an Obligation and shall bear interest and be
payable as provided in this Agreement and in Section 5 of the Forbearance
Agreement.

 

-5-

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

(d) Amendment to Section 5.1. Section 5.1 of the Agreement is hereby amended by
adding a new Section 5.1.12, which shall read as follows:

Reports Under ARRA and Reports Concerning Sale Efforts. Promptly, and in any
event prior to ten Business Days before any such report would be delinquent
under the American Recovery and Reinvestment Act of 2009, as amended from time
to time, and the regulations issued thereunder (“ARRA”), or under any guidance,
terms and conditions, frequently asked questions or other materials issued by
the Department of Treasury under Section 1603 of ARRA (“Treasury Guidance”), a
copy of each report required to be filed by the Company or with respect to the
Project, including the annual report required by Section 5 of the Terms and
Conditions for payments described in Section 1603 of ARRA currently available at
http://www.ustreas.gov/recovery/1603.shtml. In addition, the Company shall
provide to the Administrative Lender, no less frequently than monthly,
information in reasonable detail regarding the efforts being made by the Company
to sell the Facility, or by Raser and certain of its Subsidiaries to sell the
Equity Interests in the Company, as required by Section 6 of the Forbearance
Agreement.

(e) Amendment to Section 5.9. Section 5.9 of the Agreement is hereby amended by
adding a new Section 5.9.4, which shall read as follows:

maintain and operate the Facility, or cause the Facility to be maintained and
operated, so that at all times the Facility shall constitute “specified energy
property” as such term is defined under Section 1603(d) of ARRA and under any
Treasury Guidance.

 

-6-

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

(f) Amendment to Section 6.3. Section 6.3 of the Agreement is hereby amended by
amending clause (b) thereof in its entirety to read as follows:

(b) the Company may make payments not in excess of $50,000 per month, as
payments to Raser under the O&M Agreement. for the salaries and related costs of
personnel who are involved in the efforts of the Company and Raser to consummate
a Qualifying Sale as such term is defined in Section 6 of the Forbearance
Agreement,

(g) Amendment to Section 6.21. Section 6.21 of the Agreement is hereby amended
by revising the introductory clause thereof to read as follows:

Other than as expressly provided for in Article XI of the Account and Security
Agreement with respect to additional collateral described therein and in
Section 6 of the Forbearance Agreement,

(h) Amendment to Article VI. Article VI of the Agreement is hereby amended by
inserting the following immediately after Section 6.23 thereof:

Section 6.24. Limitations on Capital Expenditures. The Company will not directly
or indirectly make any capital expenditure with respect to the Project except
those required for the maintenance of the Facility.

(i) Amendment to Article VII. Article VII of the Agreement is hereby amended by
adding the following immediately after Section 7.16 thereof:

Section 7.17 Breach of Forbearance Agreement. The Company or Raser shall fail to
observe or perform any covenant, condition or agreement contained in the
Forbearance Agreement.

(j) Amendments to Section 15.4.1. Section 15.4.1 of the Agreement is hereby
amended by (i) inserting the word “Agent” immediately after the word
“Collateral” in the second line thereof, (ii) deleting “(a)” in the third line
thereof, (iii) inserting a period after the parenthesis in the sixth line
thereof, and (iv) deleting the remainder of such Section.

(k) Amendment to Section 16.9. Section 16.9 of the Agreement is hereby amended
by inserting the following at the end of such Section:

Notwithstanding the foregoing, nothing in this Section 16.9 or any other
provision of any other Transaction Document shall limit the obligations of, or
the recourse of the Agents or the Lenders against, Raser in respect of its
obligations under the Forbearance Agreement (it being understood and agreed that
the Forbearance Agreement does not create additional obligations of Raser under
any of the Transaction Documents).

 

-7-

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

Section 8. Representations and Warranties. In order to induce the Administrative
Lender and the Agents to enter into this Forbearance Agreement, each of the
Company and Raser represents and warrants (as to itself) that the following
statements are true and correct as of the Effective Date:

(a) Organization; Powers. Each of the Company and Raser is duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite limited liability company or corporate power and authority
to carry on its business as such business is now conducted, and as proposed to
be conducted.

(b) Authority; Enforceability. The transactions contemplated hereby and by the
amendment to the Account and Security Agreement described in Section 2 are
within the Company’s or Raser’s limited liability company or corporate powers
and have been duly authorized by all necessary limited liability company or
corporate action. This Forbearance Agreement and such amendment have been duly
executed and delivered by the Company or Raser and constitute legal, valid and
binding obligations of the Company or Raser, enforceable in accordance with
their respective terms except as such terms may be limited by (i) Bankruptcy,
insolvency or similar laws affecting creditors’ rights generally, or
(ii) general principles of equity, whether considered in a proceeding in equity
or at law.

(c) Approvals; No Conflicts. The transactions contemplated hereby and by the
amendment to the Account and Security Agreement described in Section 2: (i) do
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority or any other third Person, nor is
any such consent, approval, registration, filing or other action necessary for
the validity or enforceability of this Forbearance Agreement, any of such other
documents or the consummation of the transactions contemplated hereby or
thereby, except such as have been obtained or made and are in full force and
effect or are not yet required to be obtained; (ii) will not violate any
Applicable Law or regulation or the Organizational Documents of the Company or
Raser or any order of any Governmental Authority; (iii) will not violate or
result in a default under any indenture, agreement or other instrument binding
upon the Company, Raser or any of their respective Properties, or give rise to a
right thereunder to require any payment to be made by the Company or Raser; and
(iv) will not result in the creation or imposition of any Lien on any Property
of the Company (other than the Liens created by the Financing Documents) or
Raser.

(d) Litigation. There are no claims, actions, suits, investigations or
proceedings (including any arbitration proceeding) of any nature, at law or in
equity, pending or, to the knowledge of the Company and Raser, threatened by or
against the Company, Raser or any of their respective Affiliates which would
materially adversely affect the Company’s or Raser’s ability to execute, deliver
and perform under this Forbearance Agreement, the Agreement or the amendment to
the Account and Security Agreement described in Section 2 and to consummate the
transactions contemplated hereby or thereby.

 

-8-

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

(e) Defaults. There is no Credit Agreement Event of Default outstanding other
than the Specified Defaults.

(f) Totality of Agreements. The only agreements between the Company, Raser, IRP
or any of their Affiliates, on the one hand, and MLE, MLP and any of their
respective Affiliates, on the other hand, that relate to the redemption of the
Class A Interests or the Redemption Note, the Raser Guaranty or Raser Note are
the documents described in the Agreement.

Section 9. Conditions Precedent. The parties hereto agree that this Forbearance
Agreement and the consent, waiver and amendments to the Agreement contained
herein shall become effective upon the satisfaction of each of the following
conditions:

(a) Execution and Delivery of this Forbearance Agreement. The Administrative
Lender and each Agent shall have received a copy of this Forbearance Agreement
executed and delivered by the Company and Raser.

(b) Resolutions. The Administrative Lender shall have received a certificate of
(i) the secretary of IRP setting forth resolutions of its managers with respect
to the authorization of this Forbearance Agreement and the amendment of the
Account and Security Agreement described in Section 2, and (ii) the secretary or
an assistant secretary or Raser setting forth resolutions of its board of
directors with respect to the authorization of this Forbearance Agreement.

(c) Other Documents. The Administrative Lender and each Agent shall have
received fully executed copies of the amendment of the Account and Security
Agreement described in Section 2 (which shall be in form, scope and substance
satisfactory to the Administrative Lender).

(d) Payment of Reduced Prepayment Amount. Simultaneously with the execution and
delivery of this Forbearance Agreement, the Lenders shall have received the
$27,000,000 required to be disbursed from the Development Account as
contemplated by Section 2.6.5 of the Agreement, as amended hereby.

(e) Payment of Costs, Expenses, Etc. The Company shall have paid all costs and
expenses of the Agents and the Administrative Lender in connection with the
preparation, reproduction, execution and delivery of this Forbearance Agreement
and the other instruments and documents to be delivered hereunder (including the
fees and expenses of counsel for the Agents and the Administrative Lender). In
addition, the Company shall have paid any and all stamp or other taxes,
recordation fees and other fees payable in connection with the execution,
delivery, filing or recording of this Forbearance Agreement and the other
instruments and documents to be delivered hereunder, and the Company agrees to
hold the Agents and the Lenders harmless from and against any and all
liabilities with respect to or resulting from any delay or omission in paying
such taxes or fees.

 

-9-

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

Section 10. RELEASE. IN CONSIDERATION OF THE LENDERS AND THE AGENTS ENTERING
INTO THIS AGREEMENT, THE COMPANY AND RASER HEREBY ACKNOWLEDGE THAT THEIR
OBLIGATIONS UNDER THE AGREEMENT, THIS FORBEARANCE AGREEMENT AND EACH OTHER
FINANCING DOCUMENT EXECUTED IN CONNECTION THEREWITH OR HEREWITH ARE ABSOLUTE AND
UNCONDITIONAL WITHOUT ANY RIGHT OF RESCISSION, SETOFF, COUNTERCLAIM, DEFENSE,
OFFSET, CLAIM OR DEMAND OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO
REDUCE OR ELIMINATE ALL OR ANY PART OF THE COMPANY’S LIABILITY TO REPAY THE
OBLIGATIONS UNDER THE AGREEMENT, THIS FORBEARANCE AGREEMENT AND EACH OTHER
FINANCING DOCUMENT EXECUTED IN CONNECTION THEREWITH OR HEREWITH OR TO SEEK
AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM ANY RELEASED PARTY (AS
DEFINED BELOW). THE COMPANY AND RASER HEREBY VOLUNTARILY AND KNOWINGLY RELEASE
AND FOREVER DISCHARGE THE LENDERS, THE ADMINISTRATIVE LENDER AND THE AGENTS AND
EACH OF THEIR RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, COUNSEL,
AGENTS, ATTORNEYS-IN-FACT, SUCCESSORS, AND ASSIGNS (COLLECTIVELY, THE “RELEASED
PARTIES”), FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION,
DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN,
ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR
CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE
THE DATE THIS FORBEARANCE AGREEMENT IS EXECUTED, WHICH THE COMPANY OR RASER MAY
NOW OR HEREAFTER HAVE AGAINST THE RELEASED PARTIES, IF ANY, AND IRRESPECTIVE OF
WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR
REGULATIONS, OR OTHERWISE, AND ARISING OUT OF OR IN CONNECTION WITH OR BY REASON
OF THE AGREEMENT, THIS FORBEARANCE AGREEMENT OR ANY OTHER FINANCING DOCUMENT
EXECUTED IN CONNECTION THEREWITH OR HEREWITH, INCLUDING, WITHOUT LIMITATION, THE
EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE AGREEMENT, THIS FORBEARANCE
AGREEMENT AND ANY OTHER FINANCING DOCUMENT EXECUTED IN CONNECTION THEREWITH OR
HEREWITH, AND THE NEGOTIATION FOR AND EXECUTION OF THE AGREEMENT, THIS
FORBEARANCE AGREEMENT AND THE DOCUMENTS EXECUTED IN CONNECTION THEREWITH AND
HEREWITH (BUT EXCLUDING IN ALL CASES ANY OF THE FOREGOING ARISING FROM THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF THE RELEASED PARTIES). THE RELEASES AND
WAIVERS CONTAINED IN THIS SECTION 10 ARE GIVEN AND MADE BY THE COMPANY AND RASER
WITH THEIR FULL KNOWLEDGE AND UNDERSTANDING OF THE CIRCUMSTANCES AND EFFECT
THEREOF AND AFTER THEIR HAVING CONSULTED LEGAL COUNSEL WITH RESPECT THERETO.

 

-10-

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

Section 11. Limited Nature of Forbearance; Effect on Agreement and Other
Transaction Documents; Confirmation. The forbearance by the Lenders and the
Agents described herein shall be effective as of the Effective Date and is
limited to the Specified Defaults. This forbearance is limited to the extent
described herein and shall not be construed to be a consent to or a waiver of
the Specified Defaults or, except as otherwise expressly provided in Section 3,
any other terms, provisions, covenants, warranties or agreements contained in
this Forbearance Agreement, the Agreement or in any of the other Transaction
Documents. The Lenders, the Administrative Lender and the Agents reserve the
right to exercise any available rights and remedies in connection with any other
present or future Credit Agreement Defaults and Credit Agreement Events of
Default. The Company and Raser hereby further agree and acknowledge that (i) the
Specified Defaults have not been waived as a result of this Forbearance
Agreement and that such forbearance is temporary in nature, and
(ii) concurrently with the Forbearance Termination Date, all rights and remedies
that the Lenders and the Agents have agreed not to exercise as a result of
Section 4 of this Forbearance Agreement shall be automatically reinstated. The
execution, delivery and effectiveness of this Forbearance Agreement shall not
operate as a waiver of any right, power or remedy under this Forbearance
Agreement, the Agreement or any other Transaction Document. Without limiting the
generality of the foregoing, nothing in this Forbearance Agreement shall be
deemed (A) to constitute a waiver of compliance or consent to noncompliance by
the Company, Raser or any other Person with respect to any term, provision,
covenant or condition of this Forbearance Agreement, the Agreement or any other
Transaction Document; (B) to prejudice any right or remedy that any Lender or
Agent may now have or may have in the future under or in connection with this
Forbearance Agreement, the Agreement or any other Transaction Document; or
(C) to constitute a waiver of compliance or consent to noncompliance by the
Company, Raser or any other Person with respect to the terms, provisions,
covenants and conditions described herein. Except as specifically modified by
this Forbearance Agreement, the terms and provisions of the Agreement are hereby
ratified and confirmed and remain in full force and effect. The consents,
forbearance and waivers contained herein shall be limited precisely as written
and shall relate solely to the Agreement and the Financing Documents in the
manner and to the extent described herein, and nothing in this Forbearance
Agreement shall be deemed (a) to constitute a waiver of, or deviation from,
compliance by the Company, Raser or any other Person with respect to any other
term, provision or condition of this Forbearance Agreement, the Agreement or any
other Transaction Document or with respect to any other transaction or matter,
or (b) to prejudice any right or remedy that any Agent or Lender (including the
Administrative Lender) may now have, or may have in the future, under or in
connection with this Forbearance Agreement, the Agreement or any other
Transaction Document.

Section 12. Governing Law. This Forbearance Agreement shall be governed by and
construed in accordance with the laws of the State of New York, excluding any
conflicts of law rule or principle that might refer the governance or
construction of this Forbearance Agreement to the law of another jurisdiction.
Each party hereby irrevocably submits to the jurisdiction of the courts of the
State of New York in the County of New York or of the United States of America
in the Southern District of New York and hereby waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to the laying
of venue in an such action or proceeding in any such court.

Section 13. Further Assurances. In connection with this Forbearance Agreement
and the transactions contemplated hereby, upon the request of the Administrative
Lender and at the expense of the Company the parties hereto agree to execute and
deliver any additional documents and instruments and perform any additional acts
that may be reasonably required or useful to carry out the intent and purpose of
this Forbearance Agreement and as are not inconsistent with the terms hereof.

 

-11-

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

Section 14. Public Announcements. The parties hereto shall consult with one
another before issuing any public announcement, statement or other disclosure
with respect to this Forbearance Agreement or the matters contemplated hereby
and no party shall issue any such public announcement, statement or other
disclosure without the prior written consent of the other parties (which consent
shall not be unreasonably withheld or delayed) unless such action is required by
Applicable Law. Each party, upon the request of any other party, shall provide
to such other party, and such other party shall have the right to review in
advance all information relating to this Forbearance Agreement or the matters
contemplated hereby that appear in any filing made in connection with the
transactions contemplated hereby.

Section 15. Counterparts. This Forbearance Agreement may be executed in any
number of counterparts, each of which shall be an original but all of which
together will constitute one instrument, binding upon all parties hereto,
notwithstanding that all of such parties may not have executed the same
counterpart.

Section 16. Joint Efforts. To the full extent permitted by Applicable Law,
neither this Forbearance Agreement nor any ambiguity or uncertainty in this
Forbearance Agreement will be construed against any of the parties hereto,
whether under any rule of construction or otherwise. On the contrary, this
Forbearance Agreement has been prepared by the joint efforts of the respective
attorneys for, and has been reviewed by, each of the parties hereto.

Section 17. Authorization of Collateral Agent. The Administrative Lender (with
the consent of the Lenders) hereby directs the Collateral Agent to enter into
this Forbearance Agreement and the amendment to the Account and Security
Agreement contemplated by Section 2 hereof.

[Signatures on Next Page]

 

-12-

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

IN WITNESS WHEREOF, each party has caused this Amendment, Consent and
Forbearance Agreement to be signed on its behalf as of the date first written
above (with this Amendment, Consent and Forbearance Agreement being executed by
Raser only for the limited purposes set out in herein).

 

THERMO NO. 1 BE-01, LLC,   a Delaware limited liability company   By:  
Intermountain Renewable Power, LLC   Its:   Managing Member     By:  

/s/ Richard D. Clayton

    Name:   Richard D. Clayton     Title:   Manager  

RASER TECHNOLOGIES, INC., a Delaware corporation,

as Contractor and indirect owner of the Equity Interests in the Company

  By:  

/s/ Richard D. Clayton

  Name:   Richard D. Clayton   Title:    

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,

as Administrative Lender

  By:  

/s/ Ric E. Abel

  Name:   Ric E. Abel   Title:   Vice President  

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,

as a Lender

  By:  

/s/ Ric E. Abel

  Name:   Ric E. Abel   Title:   Vice President   ZURICH AMERICAN INSURANCE
COMPANY   By:   Prudential Private Placement Investors, L.P.,     (as Investment
Advisor)   By:   Prudential Private Placement Investors, Inc.     (as its
General Partner)     By:  

/s/ Ric E. Abel

      Vice President  

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

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Administrative Agent and Collateral Agent

By:  

/s/ Yana Kislenko

Name:   Yana Kislenko Title:   Assistant Vice President By:  

/s/ Randy Kahn

Name:   Randy Kahn Title:   Vice President

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

EXHIBIT A

Specified Defaults

Any Credit Agreement Event of Default existing on the Effective Date due to the
Facility Substantial Completion Date or Final Completion not having occurred
before the Guaranteed Final Completion Date

The Credit Agreement Events of Default in existence on the Effective Date due to
the failure of the Company to deliver the reports required by Section 5.1.4 of
the Agreement, the Annual Operating Plan and Budget required by Section 11 of
the Agreement and the notices required by Section 5.19 of the Agreement