EXHIBIT 4.3
                                   -----------
                                                                      ANNEX I TO
                                                   SECURITIES PURCHASE AGREEMENT
                                                   [PROTOTYPE FOR EACH ISSUANCE]


                                FORM OF DEBENTURE

         THESE SECURITIES HAVE  NOT BEEN  REGISTERED UNDER THE SECURITIES ACT OF
         1933, AS AMENDED, OR  THE SECURITIES LAWS OF  ANY STATE  AND MAY NOT BE
         SOLD OR OFFERED FOR  SALE IN THE ABSENCE  OF AN EFFECTIVE  REGISTRATION
         STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE
         ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

No._________________________                                   US $ ___________


                            RASER TECHNOLOGIES, INC.

5% SENIOR SUBORDINATED CONVERTIBLE DEBENTURE DUE ___________________

         THIS DEBENTURE is one of a duly authorized  issue of up to $ 100,000.00
in Debentures of RASER TECHNOLOGIES,  INC, a corporation  organized and existing
under the laws of the State of Utah (the "Company")  designated as its 5% Senior
Subordinated Convertible Debentures.

         FOR VALUE RECEIVED, the Company promises to pay to Professional Traders
Fund,  the  registered  holder hereof (the  "Holder"),  the principal sum of and
00/100 Dollars (US $ ) on ____________________  (the "Maturity Date") and to pay
interest on the  principal sum  outstanding  from time to time in arrears at the
rate of 5% per annum,  accruing  from , , the date of initial  issuance  of this
Debenture (the "Issue  Date"),  on the date (each,  an "Interest  Payment Date")
which is the earlier of (i) a Conversion  Date (as defined  below).  (as defined
below) or (ii) the Maturity  Date, as the case may be. Accrual of interest shall
commence on the first such  business day to occur after the Issue Date and shall
continue to accrue on a daily basis until  payment in full of the  principal sum
has been made or duly provided for. Additional  provisions regarding the payment
of interest  are provided in Section 4(D) below (the terms of which shall govern
as if this sentence were not included in this Debenture).

         This Debenture is being issued  pursuant to the terms of the Securities
Purchase  Agreement,  dated  _____________  ,  2004  (the  "Securities  Purchase
Agreement"), to which the Company and the Holder (or the Holder's predecessor in
interest) are parties. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Securities Purchase Agreement.

         This Debenture is subject to the following additional provisions:

         1. The Debentures will initially be issued in denominations  determined
by the Company,  but are exchangeable for an equal aggregate principal amount of
Debentures of different  denominations,  as requested by the Holder surrendering
the same. No service  charge will be made for such  registration  or transfer or
exchange.

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<PAGE>

         2. The  Company  shall be entitled  to  withhold  from all  payments of
principal  of, and  interest  on,  this  Debenture  any  amounts  required to be
withheld under the applicable provisions of the United States income tax laws or
other applicable laws at the time of such payments, and Holder shall execute and
deliver all required documentation in connection therewith.

         3. This Debenture has been issued subject to investment representations
of the original  purchaser  hereof and may be  transferred  or exchanged only in
compliance  with the Securities  Act of 1933, as amended (the "Act"),  and other
applicable  state and foreign  securities  laws and the terms of the  Securities
Purchase  Agreement . In the event of any proposed  transfer of this  Debenture,
the Company may  require,  prior to issuance of a new  Debenture  in the name of
such other person,  that it receive  reasonable  transfer  documentation that is
sufficient  to evidence that such  proposed  transfer  complies with the Act and
other  applicable  state  and  foreign  securities  laws  and the  terms  of the
Securities  Purchase  Agreement.  Prior to due  presentment for transfer of this
Debenture,  the  Company  and any agent of the  Company  may treat the person in
whose name this Debenture is duly registered on the Company's Debenture Register
as the owner hereof for the purpose of receiving  payment as herein provided and
for all other  purposes,  whether or not this Debenture be overdue,  and neither
the Company nor any such agent shall be affected by notice to the contrary.

         4. A. (i) At any time on or after the Issue  Date and prior to the time
this Debenture is paid in full in accordance with its terms  (including  without
limitation  after the  Maturity  Date and after  the  occurrence  of an Event of
Default,  as defined  below),  the Holder of this Debenture is entitled,  at its
option,  subject to the following  provisions of this Section 4, to convert this
Debenture  at any time into  shares of Common  Stock,  $0.01 par value  ("Common
Stock"),  of the  Company of the  Company at the  Conversion  Price (as  defined
below).

              (ii) The term "Conversion Price" means US $2.00.

              (iii) Notwithstanding any other provision of this Debenture to the
contrary, if, on the Maturity Date there is an Unconverted Debenture (as defined
below),  the  Company  shall have the option to pay the  principal  and  accrued
interest  (through  the actual date of payment) of  Unconverted  Debenture  (the
"Maturity  Amount")  either (i) in cash (and such cash shall be applied first to
interest  and  then to  principal)  or (ii) to the  extent  not  paid in cash as
provided in clause (i), by  delivering  to the Holder such number of  Conversion
Shares equal to such unpaid Maturity Amount divided by the Conversion Price then
in effect (such Conversion  Shares,  the "Maturity Date Shares").  The option to
pay any or all of the Maturity  Amount by the  issuance of Maturity  Date Shares
shall be subject to the following  conditions:  (x) the  Registration  Statement
covering  such shares must be effective at the time the Maturity Date Shares are
issued and (y) the  issuance of the  Maturity  Date Shares  shall not exceed the
amount contemplated by Section 4(C) hereof.

         B. Conversion shall be effectuated by faxing a Notice of Conversion (as
defined  below) to the  Company as  provided  in this  paragraph.  The Notice of
Conversion  shall be executed by the Holder of this Debenture and shall evidence
such Holder's  intention to convert this Debenture or a specified portion hereof
in the form annexed hereto as Exhibit A. If paid in Common Stock as contemplated
hereby,  interest  accrued  or  accruing  from the  Issue  Date to the  relevant
Interest  Payment  Date shall be paid in Common  Stock at the  Conversion  Price
applicable  as of such Interest  Payment  Date.  No fractional  shares of Common
Stock or scrip  representing  fractions of shares will be issued on  conversion,

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<PAGE>

but the number of shares  issuable  shall be rounded to the nearest whole share.
The date on which notice of conversion is given (the "Conversion Date") shall be
deemed  to be the date on which  the  Holder  faxes or  otherwise  delivers  the
conversion notice ("Notice of Conversion") to the Company so that it is received
by the  Company  on or  before  such  specified  date,  provided  that,  if such
conversion would convert the entire remaining  principal of this Debenture,  the
Holder shall deliver to the Company the original  Debentures  being converted no
later than five (5) business days thereafter.  Facsimile  delivery of the Notice
of  Conversion  shall be  accepted  by the  Company at  facsimile  number  (801)
377-3314;  Attn: Mr. Jonathan Reid. Certificates  representing Common Stock upon
conversion  ("Conversion  Certificates")  will be delivered to the Holder at the
address specified in the Notice of Conversion (which may be the Holder's address
for notices as contemplated by the Securities  Purchase Agreement or a different
address), via express courier, by electronic transfer or otherwise, within three
(3) business days (such third business day, the "Delivery  Date") after the date
on which the Notice of Conversion is delivered to the Company as contemplated in
this paragraph B, and, if interest is paid by Common Stock, the Interest Payment
Date.  The Holder shall be deemed to be the holder of the shares  issuable to it
in accordance with the provisions of this Section 4(B) on the Conversion Date.

         C.  Notwithstanding  any other provision  hereof or of any of the other
Transaction Agreements,  in no event (except (i) as specifically provided herein
as an exception to this  provision,  or (ii) while there is outstanding a tender
offer for any or all of the  shares of the  Company's  Common  Stock)  shall the
Holder be  entitled  to  convert  any  portion of this  Debenture,  or shall the
Company have the obligation to convert such Debenture (and the Company shall not
have the right to pay interest  hereon in shares of Common  Stock) to the extent
that, after such conversion or issuance of stock in payment of interest, the sum
of (1) the number of shares of Common Stock beneficially owned by the Holder and
its  affiliates  (other  than  shares  of  Common  Stock  which  may  be  deemed
beneficially  owned  through the  ownership  of the  unconverted  portion of the
Debentures  or other  convertible  securities or of the  unexercised  portion of
warrants or other rights to purchase Common Stock), and (2) the number of shares
of Common Stock issuable upon the  conversion of the Debentures  with respect to
which  the  determination  of this  proviso  is  being  made,  would  result  in
beneficial  ownership by the Holder and its affiliates of more than 4.99% of the
outstanding  shares of Common Stock (after  taking into account the shares to be
issued to the Holder upon such  conversion).  For purposes of the proviso to the
immediately  preceding  sentence,  beneficial  ownership  shall be determined in
accordance  with  Section  13(d) of the  Securities  Exchange  Act of  1934,  as
amended,  except as  otherwise  provided  in clause  (1) of such  sentence.  The
Holder,  by its acceptance of this Debenture,  further agrees that if the Holder
transfers or assigns any of the  Debentures to a party who or which would not be
considered  such an  affiliate,  such  assignment  shall be made  subject to the
transferee's or assignee's  specific  agreement to be bound by the provisions of
this Section 4(C) as if such  transferee  or assignee  were the original  Holder
hereof.  Nothing herein shall preclude the Holder from disposing of a sufficient
number of other shares of Common Stock beneficially owned by the Holder so as to
thereafter permit the continued conversion of this Debenture.

         D. (i)  Subject to the terms of Section  4(C) and to the other terms of
this Section 4(D),  interest on the principal amount of this Debenture converted
pursuant to a Notice of  Conversion  shall be due and payable,  at the option of
the Company, in cash or Common Stock on the Interest Payment Date.

              (ii) If the interest is to be paid in cash, the Company shall make
such payment within three (3) business days of the Interest Payment Date. If the
interest is not paid by such third  business  day, the interest  must be paid in
Common Stock in accordance with the provisions of Section 4(D)(i) hereof, unless
the Holder consents otherwise in each specific instance.

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<PAGE>

              (iii) Notwithstanding the foregoing,  the Company's right to issue
shares in payment of such interest is applicable  if, and only if, there is then
in effect a current  Registration  Statement covering the shares to be issued to
the Holder in payment of such interest.

              (iv) The number of shares of Common  Stock to be issued in payment
of such  interest  shall be  determined  by  dividing  the dollar  amount of the
interest to be so paid by the Conversion Price on the relevant  Interest Payment
Date.  Such Common  Stock shall be  delivered  to the  Holder,  or per  Holder's
instructions,  on the  Delivery  Date for the  related  Conversion  Certificates
pursuant to Section 4(B) hereof.

              (iv) If the Company  elects to have the interest paid in cash, the
Company  shall make such payment  within three (3) business days of the Interest
Payment  Date.  If such  payment is not made in cash by such  date,  it shall be
deemed that,  subject to the provisions of Section 4(C) hereof,  the Company has
elected  to pay the  interest  in  stock,  if,  but  only if,  the  Registration
Statement  covering the shares being issued is effective on the date such shares
are issued.

         5.  Subject  to the  terms of the  Securities  Purchase  Agreement,  no
provision of this Debenture shall alter or impair the obligation of the Company,
which is absolute and  unconditional,  to pay the principal of, and interest on,
this Debenture at the time, place, and rate, and in the coin or currency, herein
prescribed.  This Debenture and all other  Debentures now or hereafter issued of
similar terms are direct obligations of the Company.

         6. No recourse shall be had for the payment of the principal of, or the
interest  on, this  Debenture,  or for any claim based  hereon,  or otherwise in
respect hereof, against any incorporator,  shareholder,  officer or director, as
such,  past,  present or future,  of the Company or any  successor  corporation,
whether  by  virtue  of any  constitution,  statute  or rule  of law,  or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance  hereof and as part of the consideration for the issue hereof,
expressly waived and released.

         7. All payments  contemplated hereby to be made "in cash" shall be made
in immediately available good funds of United States of America currency by wire
transfer to an account designated in writing by the Holder to the Company (which
account may be changed by notice similarly given). All payments of cash and each
delivery of shares of Common Stock issuable to the Holder as contemplated hereby
shall be made to the  Holder at the  address  last  appearing  on the  Debenture
Register  of the  Company as  designated  in writing by the Holder  from time to
time;  except  that the  Holder  can  designate,  by  notice to the  Company,  a
different delivery address for any one or more specific payments or deliveries.

         8. If, for as long as this Debenture remains  outstanding,  the Company
enters into a merger or consolidation  with another  corporation or other entity
(other than where the Company is the surviving  entity) or a sale or transfer of
all or  substantially  all of  the  assets  of the  Company  to  another  person
(collectively,  a "Change of Control"),  then the Company must give fifteen days
written notice to the Holder of the Change of Control,  whereupon the Holder may
elect by written notice to the Company that the Debenture is immediately due and
payable,  and the  Maturity  Date  shall  be  accelerated  accordingly,  without
presentment,  demand,  protest or other  notice of any  kinds,  all of which are
hereby  expressly  waived,  anything herein or in any note or other  instruments
contained  to the  contrary  notwithstanding,  and the  Holder  may  immediately
enforce any and all of the Holder's  rights and remedies  provided herein or any
other rights or remedies afforded by law (the "Election").

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<PAGE>

         If the  Holder  does not  make the  Election,  then  the  Company  will
require, in the agreements reflecting such Change of Control, that the surviving
entity   expressly   assume   the   obligations   of  the   Company   hereunder.
Notwithstanding  the  foregoing,  if the Company enters into a Change of Control
and the holders of the Common Stock are entitled to receive stock, securities or
property in respect of or in exchange for Common  Stock,  then as a condition of
such  Change of  Control,  the  Company  and any such  successor,  purchaser  or
transferee  will agree that the  Debenture  may  thereafter  be converted on the
terms and subject to the  conditions set forth above into the kind and amount of
stock, securities or property receivable upon such merger,  consolidation,  sale
or transfer by a holder of the number of shares of Common  Stock into which this
Debenture   might  have  been   converted   immediately   before  such   merger,
consolidation, sale or transfer, subject to adjustments which shall be as nearly
equivalent as may be  practicable.  In the event of any such proposed  Change of
Control,  (i) the Holder  hereof shall have the right to convert by delivering a
Notice of  Conversion  to the  Company  within  fifteen  (15) days of receipt of
notice of such Change of Control  from the  Company,  except that  Section  4(C)
shall not apply to such conversion.

         9.  If,  at any  time  while  any  portion  of this  Debenture  remains
outstanding,  the Company spins off or otherwise divests itself of a part of its
business  or  operations  or  disposes  of all or of a part of its  assets  in a
transaction (the "Spin Off") in which the Company,  in addition to or in lieu of
any other  compensation  received and retained by the Company for such business,
operations  or  assets,  causes  securities  of  another  entity  (the "Spin Off
Securities") to be issued to security holders of the Company,  the Company shall
cause (i) to be reserved Spin Off  Securities  equal to the number thereof which
would  have  been  issued  to the  Holder  had  all of the  Holder's  Debentures
outstanding  on the record date (the "Record Date") for  determining  the amount
and  number  of Spin Off  Securities  to be issued to  security  holders  of the
Company  (the  "Outstanding  Debentures")  been  converted  as of the  close  of
business on the trading day  immediately  before the Record Date (the  "Reserved
Spin Off Shares"),  and (ii) to be issued to the Holder on the conversion of all
or any of the  Outstanding  Debentures,  such  amount of the  Reserved  Spin Off
Shares equal to (x) the Reserved  Spin Off Shares  multiplied by (y) a fraction,
of which (I) the numerator is the principal amount of the Outstanding Debentures
then being  converted,  and (II) the denominator is the principal  amount of the
Outstanding Debentures.

         10.  If,  at any time  while  any  portion  of this  Debenture  remains
outstanding, the Company effectuates a stock split or reverse stock split of its
Common  Stock or issues a dividend on its Common Stock  consisting  of shares of
Common  Stock,  the  Conversion  Price  and  any  other  amounts  calculated  as
contemplated  hereby  or by any of the  other  Transaction  Agreements  shall be
equitably  adjusted to reflect such action.  By way of illustration,  and not in
limitation,  of the foregoing, (i) if the Company effectuates a 2:1 split of its
Common Stock,  thereafter,  with respect to any conversion for which the Company
issues shares after the record date of such split, the Conversion Price shall be
deemed to be one-half of what it had been immediately  prior to such split; (ii)
if the Company effectuates a 1:10 reverse split of its Common Stock, thereafter,
with respect to any  conversion  for which the Company  issues  shares after the
record date of such reverse split,  the  Conversion  Price shall be deemed to be
ten times what it had been calculated to be immediately prior to such split; and
(iii) if the Company  declares a stock dividend of one share of Common Stock for
every 10 shares  outstanding,  thereafter,  with respect to any  conversion  for
which the Company  issues  shares  after the record date of such  dividend,  the
Conversion Price shall be deemed to be such amount multiplied by a fraction,  of
which the  numerator  is the  number of shares (10 in the  example)  for which a
dividend share will be issued and the  denominator is such number of shares plus
the dividend share(s) issuable or issued thereon (11 in the example).

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<PAGE>

         11. The Holder of the Debenture, by acceptance hereof, agrees that this
Debenture is being  acquired for investment and that such Holder will not offer,
sell or  otherwise  dispose  of this  Debenture  or the  shares of Common  Stock
issuable  upon  conversion  thereof  except under  circumstances  which will not
result in a  violation  of the Act or any  applicable  state Blue Sky or foreign
laws or similar laws relating to the sale of securities.

         12.  The Holder  acknowledges  and agrees  that the  Debenture  and all
principal and interest due  thereunder is and shall be  subordinated  to any and
all secured  debt issued by the Company on or after the Closing  Date  ("Secured
Debt") to any other lender (the  "Secured  Lender") and the Holder shall execute
such  subordination  agreements  and other  documentation  as the Company or any
Secured Lender may reasonably  require to effect such  subordination in favor of
any  particular  Secured  Lender  provided  (i) that the  Company  shall pay the
Holder's reasonable costs in respect in respect of the preparation and execution
of such subordination  agreement, and (ii) no such Subordination Agreement shall
affect any conversion rights hereunder.

         13. This  Debenture  shall be governed by and  construed in  accordance
with the laws of the  State of New York.  Each of the  parties  consents  to the
exclusive  jurisdiction of the federal courts whose districts encompass any part
of the City of New York or the state  courts of the State of New York sitting in
the City of New York in connection with any dispute arising under this Agreement
and hereby  waives,  to the maximum  extent  permitted  by law,  any  objection,
including any  objection  based on forum non  coveniens,  to the bringing of any
such proceeding in such  jurisdictions.  To the extent determined by such court,
the  Company  shall  reimburse  the  Holder  for any  reasonable  legal fees and
disbursements  incurred by the Holder in  enforcement of or protection of any of
its rights under any of this Debenture.

         14.  The  Company  and the Holder  hereby  waive a trial by jury in any
action,  proceeding  or  counterclaim  brought by either of the  Parties  hereto
against the other in respect of any matter arising out of or in connection  with
this Debenture.

         15. The following shall constitute an "Event of Default":

         a.   The Company  shall default in the payment of principal or interest
              on this  Debenture,  any  Redemption  Amount due  hereunder or any
              other  amount  due,  and,  in any such  instance,  the same  shall
              continue for a period of five (5) business days; or

         b.   Any of the  representations  or  warranties  made  by the  Company
              herein, in the Securities  Purchase  Agreement or any of the other
              Transaction Agreements or in any certificate or financial or other
              written  statements  heretofore  or  hereafter  furnished  by  the
              Company in  connection  with the  execution  and  delivery of this
              Debenture or the Securities  Purchase  Agreement shall be false or
              misleading in any material respect at the time made; or

         c.   Subject to the terms of the  Securities  Purchase  Agreement,  the
              Company fails to authorize or to cause its Transfer Agent to issue
              shares  of  Common  Stock  upon  exercise  by  the  Holder  of the
              conversion  rights of the Holder in  accordance  with the terms of
              this  Debenture,  fails to transfer or to cause its Transfer Agent
              to transfer any  certificate  for shares of Common Stock issued to

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<PAGE>

              the Holder upon  conversion of this Debenture and when required by
              this  Debenture or the  Registration  Rights  Agreement,  and such
              transfer is otherwise  lawful,  or fails to remove any restrictive
              legend on any  certificate or fails to cause its Transfer Agent to
              remove such restricted  legend, in each case where such removal is
              lawful,  as and when required by this Debenture,  the Agreement or
              the  Registration  Rights  Agreement,  and any such failure  shall
              continue uncured for ten (10) business days; or

         d.   The  Company  shall fail to perform or  observe,  in any  material
              respect, any other covenant, term, provision, condition, agreement
              or  obligation  of any  Debenture  in this series and such failure
              shall  continue  uncured  for a period of thirty  (30) days  after
              written notice from the Holder of such failure; or

         e.   The  Company  shall fail to perform or  observe,  in any  material
              respect, any covenant,  term, provision,  condition,  agreement or
              obligation of the Company under any of the Transaction  Agreements
              and such  failure  shall  continue  uncured for a period of thirty
              (30) days after written notice from the Holder of such failure; or

         f.   The Company  shall (1) admit in writing its  inability  to pay its
              debts  generally as they mature;  (2) make an  assignment  for the
              benefit of creditors or commence  proceedings for its dissolution;
              or (3) apply  for or  consent  to the  appointment  of a  trustee,
              liquidator  or receiver for its or for a  substantial  part of its
              property or business; or

         g.   A trustee,  liquidator  or  receiver  shall be  appointed  for the
              Company or for a  substantial  part of its  property  or  business
              without its consent and shall not be discharged  within sixty (60)
              days after such appointment; or

         h.   Any governmental agency or any court of competent  jurisdiction at
              the instance of any  governmental  agency shall assume  custody or
              control of the whole or any substantial  portion of the properties
              or assets of the Company and shall not be  dismissed  within sixty
              (60) days thereafter; or

         i.   Bankruptcy, reorganization,  insolvency or liquidation proceedings
              or other  proceedings  for relief under any  bankruptcy law or any
              law for the relief of debtors  shall be  instituted  by or against
              the Company and, if instituted  against the Company,  shall not be
              dismissed  within  sixty (60) days after such  institution  or the
              Company shall by any action or answer  approve of,  consent to, or
              acquiesce   in  any  such   proceedings   or  admit  the  material
              allegations  of, or default in  answering a petition  filed in any
              such proceeding; or

         j.   The Company shall have its Common Stock suspended from trading on,
              or delisted  from,  the Principal  Trading Market for in excess of
              ten (10) trading days; or

         k.   Any event  defined in another  provision  of this  Debenture as an
              Event of Default shall have occurred.

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<PAGE>

         If an  Event of  Default  shall  have  occurred,  then,  or at any time
thereafter,  and in each and every such case, unless such Event of Default shall
have been waived in writing by the Holder  (which  waiver shall not be deemed to
be a waiver of any  subsequent  default)  at the option of the Holder and in the
Holder's sole discretion, the Holder may consider this Debenture immediately due
and payable (and the Maturity Date shall be  accelerated  accordingly),  without
presentment,  demand,  protest or notice of any  kinds,  all of which are hereby
expressly waived,  anything herein or in any note or other instruments contained
to the contrary notwithstanding,  and the Holder may immediately enforce any and
all of the Holder's  rights and remedies  provided herein or any other rights or
remedies afforded by law.

         16.  Nothing   contained  in  this  Debenture  shall  be  construed  as
conferring  upon the  Holder  the right to vote or to  receive  dividends  or to
consent  or  receive  notice as a  shareholder  in  respect  of any  meeting  of
shareholders  or any rights  whatsoever as a shareholder of the Company,  unless
and to the extent converted in accordance with the terms hereof.

         17. In the event for any  reason,  any payment by or act of the Company
or the Holder shall  result in payment of interest  which would exceed the limit
authorized  by or be in violation of the law of the  jurisdiction  applicable to
this Debenture, then ipso facto the obligation of the Company to pay interest or
perform such act or requirement  shall be reduced to the limit  authorized under
such law,  so that in no event shall the  Company be  obligated  to pay any such
interest, perform any such act or be bound by any requirement which would result
in the payment of interest  in excess of the limit so  authorized.  In the event
any payment by or act of the Company shall result in the extraction of a rate of
interest in excess of a sum which is lawfully collectible as interest, then such
amount (to the extent of such excess not returned to the Company) shall, without
further  agreement or notice between or by the Company or the Holder,  be deemed
applied to the payment of principal,  if any, hereunder immediately upon receipt
of such excess funds by the Holder, with the same force and effect as though the
Company had specifically  designated such sums to be so applied to principal and
the Holder had agreed to accept such sums as an interest-free prepayment of this
Debenture.  If any part of such excess remains after the principal has been paid
in full, whether by the provisions of the preceding sentences of this Section or
otherwise,  such  excess  shall be deemed to be an  interest-free  loan from the
Company to the Holder,  which loan shall be payable  immediately  upon demand by
the Company.  The provisions of this Section shall control every other provision
of this Debenture.

         IN WITNESS  WHEREOF,  the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.

Dated: ___________________, 20___

                                         Raser Technolgies, Inc.


                                         By:____________________________________


                                         ---------------------------------------
                                         (Print Name)

                                         _______________________________________
                                           (Title)


                                       8
<PAGE>

                                    EXHIBIT A

                              NOTICE OF CONVERSION
                                       OF
5% SENIOR SUBORDINATED CONVERTIBLE DEBENTURE DUE __________________
   (To be Executed by the Registered Holder in Order to Convert the Debenture)



FROM:                                                                 ("Holder")
     ---------------------------------------------------------------

DATE:                                                    (the "Conversion Date")
     ---------------------------------------------------


RE:      Conversion of $___________ principal amount (the "Converted Debenture")
         of   the   5%   Senior   Subordinated    Convertible    Debenture   Due
         ____________________ (the "Debenture") of Raser Technologies, Inc. (the
         "Company") into  _______________  shares (the  "Conversion  Shares") of
         Common Stock (defined below)

CONVERSION DATE: __________________________________

         The captioned  Holder  hereby gives notice to the Company,  pursuant to
the Debenture of RASER TECHNOLOGIES,  INC. that the Holder elects to convert the
Converted  Debenture into fully paid and non-assessable  shares of Common Stock,
$0.01 par value (the "Common  Stock"),  of the Company as of the Conversion Date
specified  above.  Said  conversion  shall be based on the following  Conversion
Price

                  $__________, representing  the  original  Conversion Price (as
                  defined in the Debenture)

                  $__________, representing  the  original Conversion  Price (as
                  defined in the  Debenture),  adjusted  in  accordance with the
                  provisions of the Debenture.


                                       9
<PAGE>


         Based  on this  Conversion  Price,  the  number  of  Conversion  Shares
indicated above should be issued in the following name(s):

                  Name and Record Address                     Conversion Shares


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

         It is the  intention  of the Holder to comply  with the  provisions  of
Section 4(C) of the Debenture  regarding certain limits on the Holder's right to
convert  thereunder.  Based on the analysis on the attached Worksheet  Schedule,
the Holder believe this conversion  complies with the provisions of said Section
4(C).  Nonetheless,  to the extent  that,  pursuant to the  conversion  effected
hereby,  the Holder would have more shares than  permitted  under said  Section,
this notice should be amended and revised, ab initio, to refer to the conversion
which would result in the issuance of shares consistent with such provision. Any
conversion above such amount is hereby deemed void and revoked.

         As contemplated by the Debenture and the Securities Purchase Agreement,
this Notice of  Conversion is being sent by facsimile to the  telecopier  number
and officer indicated above.

         If this Notice of  Conversion  represents  the full  conversion  of the
outstanding  balance  of the  Converted  Debenture,  the  Holder  either (1) has
previously surrendered the Converted Debenture, duly endorsed, to the Company or
(2) will surrender (or cause to be surrendered)  the Converted  Debenture,  duly
endorsed,  to the  Company at the  address  indicated  above by express  courier
within five (5) business days after delivery or facsimile  transmission  of this
Notice of Conversion.

         The  certificates   representing   the  Conversion   Shares  should  be
transmitted  by the Company to the Holder via express  courier or by  electronic
transfer within the time  contemplated by the Debenture and Securities  Purchase
Agreement after receipt of this Notice of Conversion (by facsimile  transmission
or otherwise) to:

                                       10
<PAGE>


         As  contemplated  by the  Debenture,  the  Company  should also pay all
accrued but unpaid interest on the Converted Debenture to the Holder.

                           -- If the  Company  elects to pay  such  interest  in
                  Common Stock, as contemplated by and subject to the provisions
                  of the Debenture, such shares should be issued in the  name of
                  the Holder and delivered in the same  manner as,  and together
                  with, the Conversion Shares.

                           -- If the  Company  elects or  is required to pay the
                  interest  paid  in cash,  such payment  should be made by wire
                  transfer as follows:







                                         -----------------------------------
                                         (Print name of Holder)

                                         By: _______________________________
                                             (Signature of Authorized Person)

                                         -----------------------------------
                                             (Printed Name and Title)



                                       11
<PAGE>


                              NOTICE OF CONVERSION
                               WORKSHEET SCHEDULE


1. Current Common Stock holdings of Holder and Affiliates                _______

2. Shares to be issued on current conversion(s) and other exercise(s)    _______

3. Other shares to be issued on other current conversion(s) and

         other current exercise(s)                                       _______

4. Other shares eligible to be acquired within next 60 days

         without restriction                                             _______

5. Total [sum of Lines 1 through 4]                                      _______

6. Outstanding shares of Common Stock*                                   _______

7. Adjustments to Outstanding

         a. Shares known to Holder as previously issued

             to Holder or others but not included in Line 6              _______

         b. Shares to be issued per Line(s) 2 and 3                      _______

         c. Total Adjustments [Lines 7a and 7b]                          _______

8. Total Adjusted Outstanding [Lines 6 plus 76c]                         _______

9. Holder's Percentage [Line 5 divided by Line 8]                        ______%

[Note: Line 9 not to be above 4.99%]

* Based on latest SEC filing by Company or information provided by executive
officer of Company, counsel to Company or transfer agent


                                       12
<PAGE>


         THESE SECURITIES  HAVE NOT BEEN REGISTERED UNDER  THE SECURITIES ACT OF
         1933, AS AMENDED, OR  THE SECURITIES  LAWS OF ANY  STATE AND MAY NOT BE
         SOLD OR OFFERED FOR SALE IN THE  ABSENCE  OF AN  EFFECTIVE REGISTRATION
         STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE
         ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

                            RASER TECHNOLOGIES, INC.

                          COMMON STOCK PURCHASE WARRANT

         1. Issuance; Certain Definitions. In consideration of good and valuable
consideration,   the   receipt  of  which  is  hereby   acknowledged   by  RASER
TECHNOLOGIES,  INC., a Utah corporation (the  "Company"),  Professional  Traders
Fund 48 Woodport  Road  Sparta,  New Jersey  07871 or  registered  assigns  (the
"Holder")  is hereby  granted the right to purchase at any time until 5:00 P.M.,
New York City  time,  on ___ day of May,  2007 (the  "Expiration  Date"),  Fifty
Thousand  (50,000) fully paid and  nonassessable  shares of the Company's Common
Stock,  $0.01 par value per share (the "Common  Stock"),  at an initial exercise
price per share (the  "Exercise  Price") of $3.50 per share,  subject to further
adjustment as set forth herein.

         2. Exercise of Warrants.

              (a) This  Warrant is  exercisable  in whole or in part at any time
and from time to time.  Such exercise  shall be effectuated by submitting to the
Company  (either by  delivery  to the Company or by  facsimile  transmission  as
provided in Section 8 hereof) a completed and duly  executed  Notice of Exercise
(substantially  in the  form  attached  to this  Warrant)  as  provided  in this
paragraph. The date such Notice of Exercise is faxed to the Company shall be the
"Exercise  Date,"  provided that the Holder of this Warrant tenders this Warrant
Certificate to the Company within five (5) business days thereafter.  The Notice
of Exercise  shall be executed by the Holder of this Warrant and shall  indicate
the number of shares  then  being  purchased  pursuant  to such  exercise.  Upon
surrender of this Warrant Certificate,  together with appropriate payment of the
Exercise  Price for the shares of Common  Stock  purchased,  the Holder shall be
entitled to receive a certificate or certificates for the shares of Common Stock
so purchased.

              (b) The  Exercise  Price per share of Common  Stock for the shares
then being  exercised  shall be payable in cash or by certified or official bank
check.

              (c) The  Holder  shall be  deemed to be the  holder of the  shares
issuable  to it in  accordance  with the  provisions  of this  Section  2 on the
Exercise Date.

         3.  Reservation of Shares.  The Company hereby agrees that at all times
during the term of this  Warrant  there  shall be  reserved  for  issuance  upon
exercise of this  Warrant  such number of shares of its Common Stock as shall be
required for issuance upon exercise of this Warrant (the "Warrant Shares").

         4.  Mutilation  or Loss of  Warrant.  Upon  receipt  by the  Company of
evidence  satisfactory  to it of the loss,  theft,  destruction or mutilation of
this  Warrant,  and (in the  case of  loss,  theft or  destruction)  receipt  of
reasonably  satisfactory  indemnification,  and (in the case of mutilation) upon
surrender and cancellation of this Warrant, the Company will execute and deliver
a new  Warrant of like tenor and date and any such lost,  stolen,  destroyed  or
mutilated Warrant shall thereupon become void.

                                       13
<PAGE>

         5. Rights of the Holder.  The Holder  shall not, by virtue  hereof,  be
entitled to any rights of a stockholder in the Company, either at law or equity,
and the rights of the Holder are limited to those  expressed in this Warrant and
are not enforceable against the Company except to the extent set forth herein.

         6. Protection Against Dilution and Other Adjustments.

         6.1 Adjustment Mechanism. The Company covenants and agrees that, except
for the sale of Debentures  and Warrants to the Other  Lenders,  and, the period
(the "New  Transaction  Period") from the Initial Closing Date of the Securities
Purchase   Agreement  and  until  60  days  after  the  Effective  Date  of  the
Registration Statement,  any subsequent or further offer or sale of Common Stock
or securities  convertible into and/or other rights exercisable for the issuance
of Common Stock  (collectively,  "New Common  Stock") to or with any third party
will constitute a "New Transaction". Notwithstanding anything to the contrary in
this Section 6, a New Transaction shall not include that certain  transaction in
which the Company may raise an additional approximately $3,500,000.00,  or more,
involving some or none of the Other Lenders within the transaction period.

         In the event there is a New Transaction:

         (A) the number of Warrants shall be adjusted to equal the higher of (1)
the number of Warrant  Shares  originally  provided  in the  Warrants or (2) the
number of  warrants  under the terms of the New  Transaction  multiplied  by the
lesser of(I) the number 1, if the exercise price of the warrants under the terms
of the New  Transaction  ("the New  Transaction  Warrant Price") is less than or
equal to the  existing  Warrant  Price  and (II) the  quotient  of the  existing
Warrant  Price  divided by the New  Transaction  Warrant  Price,  if the the New
Transaction Warrant Price exceeds the existing Warrant Price; and

         (B) the Exercise  Price on the Warrants  shall be adjusted to equal the
lower of (1) the then existing Warrant Price or (2) the New Transaction  Warrant
Price.

                  If an adjustment of the Exercise Price is required pursuant to
                  this Section 6, the Holder shall be  entitled to purchase such
                  number of additional shares  of Common Stock as will cause (i)
                  the total number  of shares of Common Stock Holder is entitled
                  to purchase  pursuant to  this Warrant, multiplied by (ii) the
                  adjusted Exercise  Price per  share, to equal (iii) the dollar
                  amount of the total number of shares of Common Stock Holder is
                  entitled to purchase before adjustment multiplied by the total
                  Exercise Price immediately before adjustment.

         6.2  Capital  Adjustments.  If, at any time  while any  portion of this
Warrant remains  outstanding,  the Company  effectuates a stock split or reverse
stock  split of its  Common  Stock or  issues a  dividend  on its  Common  Stock
consisting of shares of Common Stock,  the Exercise  Price and any other amounts
calculated as contemplated hereby or by any of the other Transaction  Agreements
shall be equitably adjusted to reflect such action. By way of illustration,  and
not in limitation,  of the foregoing, (i) if the Company effectuates a 2:1 split
of its Common Stock,  thereafter,  with respect to any  conversion for which the
Company  issues shares after the record date of such split,  the Exercise  Price

                                       14
<PAGE>

shall be deemed to be  one-half  of what it had been  immediately  prior to such
split; (ii) if the Company effectuates a 1:10 reverse split of its Common Stock,
thereafter,  with respect to any  conversion for which the Company issues shares
after the record date of such reverse split,  the Exercise Price shall be deemed
to be ten times  what it had been  calculated  to be  immediately  prior to such
split; and (iii) if the Company declares a stock dividend of one share of Common
Stock  for  every  10  shares  outstanding,  thereafter,  with  respect  to  any
conversion  for which the Company  issues  shares  after the record date of such
dividend,  the Exercise Price shall be deemed to be such amount  multiplied by a
fraction, of which the numerator is the number of shares (10 in the example) for
which a  dividend  share will be issued and the  denominator  is such  number of
shares  plus  the  dividend  share(s)  issuable  or  issued  thereon  (11 in the
example).

         In case of any stock  split or reverse  stock  split,  stock  dividend,
reclassification of the Common Stock, recapitalization, merger or consolidation,
or like capital  adjustment  affecting  the Common Stock of the Company prior to
the exercise of this Warrant or its applicable  portion,  the provisions of this
Section 6 shall be  applied as if such  capital  adjustment  event had  occurred
immediately prior to the exercise date of this Warrant and the original Exercise
Price had been  fairly  allocated  to the  stock  resulting  from  such  capital
adjustment;  and in other  respects  the  provisions  of this  Section  shall be
applied in a fair,  equitable  and  reasonable  manner so as to give effect,  as
nearly as may be, to the purposes hereof.

         6.3 Spin Off. If, for any reason, prior to the exercise of this Warrant
in full,  the Company  spins off or  otherwise  divests  itself of a part of its
business  or  operations  or  disposes  all or of a  part  of  its  assets  in a
transaction (the "Spin Off") in which the Company does not receive  compensation
for such business, operations or assets, but causes securities of another entity
to be issued to security  holders of the Company,  then the Company shall notify
the Holder at least  thirty (30) days prior to the record  date with  respect to
such Spin-Off.

         7. Transfer to Comply with the Securities Act; Registration Rights.

         7.1 Transfer. This Warrant has not been registered under the Securities
Act of 1933,  as  amended,  (the  "Act")  and has been  issued to the Holder for
investment and not with a view to the  distribution of either the Warrant or the
Warrant  Shares.  Except for transfers to officers,  employees and affiliates of
the Holder,  neither  this  Warrant  nor any of the Warrant  Shares or any other
security  issued  or  issuable  upon  exercise  of  this  Warrant  may be  sold,
transferred, pledged or hypothecated in the absence of an effective registration
statement  under the Act  relating  to such  security  or an  opinion of counsel
satisfactory  to the Company that  registration  is not required  under the Act.
Each  certificate  for the Warrant,  the Warrant  Shares and any other  security
issued or issuable  upon  exercise of this Warrant shall contain a legend on the
face  thereof,  in form and substance  satisfactory  to counsel for the Company,
setting forth the restrictions on transfer contained in this Section.

         7.2  Registration  Rights.  (a)  Reference is made to the  Registration
Rights  Agreement.  The  Company's  obligations  under the  Registration  Rights
Agreement and the other terms and conditions thereof with respect to the Warrant
Shares,  including,  but not necessarily limited to, the Company's commitment to
file a  registration  statement  including  the  Warrant  Shares,  to  have  the
registration of the Warrant Shares completed and effective, and to maintain such
registration, are incorporated herein by reference.

         (b) In addition to the registration rights referred to in the preceding
provisions  of  Section   7.2(a),   effective   after  the   expiration  of  the

                                       15
<PAGE>

effectiveness of the Registration  Statement as contemplated by the Registration
Rights  Agreement,  the Holder shall have  piggy-back  registration  rights with
respect  to the  Warrant  Shares  then  held by the  Holder or then  subject  to
issuance upon exercise of this Warrant  (collectively,  the  "Remaining  Warrant
Shares"),  subject to the conditions set forth below.  If, at any time after the
Registration  Statement  has ceased to be  effective,  the Company  participates
(whether  voluntarily  or by reason of an  obligation  to a third  party) in the
registration  of any shares of the Company's stock (other than a registration on
Form S-8 or on Form S-4),  the Company shall give written  notice thereof to the
Holder and the Holder shall have the right, exercisable within ten (10) business
days after  receipt of such notice,  to demand  inclusion of all or a portion of
the Holder's  Remaining  Warrant Shares in such registration  statement.  If the
Holder exercises such election, the Remaining Warrant Shares so designated shall
be included in the  registration  statement  at no cost or expense to the Holder
(other than any costs or  commissions  which would be borne by the Holder  under
the terms of the Registration  Rights  Agreement);  provided,  however,  that if
there is a managing  underwriter  of the  offering of shares  referred to in the
registration  statement  and such  managing  underwriter  advises the Company in
writing that the number of shares  proposed to be included in the offering  will
have an adverse effect on its ability to successfully conclude the offering and,
as a  result,  the  number of shares to be  included  in the  offering  is to be
reduced,  the number of Remaining  Warrant Shares of the Holder which were to be
included in the  registration  (before such  reduction) will be reduced pro rata
with the number of shares  included for all other parties whose shares are being
registered.  The Holder's  rights under this Section 7 shall expire at such time
as the  Holder  can sell all of the  Remaining  Warrant  Shares  under  Rule 144
without volume or other restrictions or limit.

         8.  Notices.  Any notice or other  communication  required or permitted
hereunder  shall be in writing and shall be delivered  personally,  telegraphed,
sent  by  facsimile  transmission  or sent by  couriercertified,  registered  or
express mail,  postage  pre-paid.  Any such notice shall be deemed given when so
delivered personally, telegraphed, telexed or sent by facsimile transmission, or
by courier,  if mailed, four days after the date of deposit in the United States
mails, as follows:



                                       16
<PAGE>

                        (i) if to the Company, to:

                            Raser Technologies, Inc.
                            5152 North Edgwood Drive
                            Provo, Utah 84604
                            Attn:
                            Telephone No.: (801) 765-1200
                            Telecopier No.: (801)

                           with a copy to:
                            Leonard Burningham, Esq.
                            455 East 500 South
                            Salt Lake City, UT 84111
                            Telephone No.: (801)363-7411
                            Telecopier No.: (801)355-7126

                        (ii) if to the Holder, to:

                            Professional Traders Fund
                            48 Woodport Road
                            Sparta, New Jersey 07871
                            Attn:
                            Telephone No.: (973)
                            Telecopier No.: (973) 726-6093

                           with a copy to:

                            Krieger & Prager LLP, Esqs.
                            39 Broadway
                            Suite 1440
                            New York, NY 10006
                            Attn: Samuel M. Krieger, Esq.
                            Telephone No.: (212) 363-2900
                            Telecopier No.  (212) 363-2999

         Any party may give notice in accordance  with this Section to the other
parties designate to another address or person for receipt of notices hereunder.

         9.  Supplements and Amendments;  Whole  Agreement.  This Warrant may be
amended or  supplemented  only by an instrument in writing signed by the parties
hereto. This Warrant contains the full understanding of the parties with respect
to the  subject  matter  hereof and  thereof  and there are no  representations,
warranties,  agreements or understandings  other than expressly contained herein
and therein.

         10.  Governing  Law. This Warrant shall be deemed to be a contract made
under the laws of the State of New York for contracts to be wholly  performed in
such State and without  giving effect to the  principles  thereof  regarding the
conflict  of laws.  Each of the  parties  consents  to the  jurisdiction  of the
federal courts whose districts  encompass any part of the State of New York, New
York County in connection with any dispute arising under this Warrant and hereby
waives,  to the maximum extent  permitted by law, any  objection,  including any
objection based on forum non conveniens,  to the bringing of any such proceeding
in such jurisdictions.

                                       17
<PAGE>

         11. Jury Trial Waiver.  The Company and the Holder hereby waive a trial
by jury in any  action,  proceeding  or  counterclaim  brought  by either of the
parties  hereto  against  the other in respect of any matter  arising  out or in
connection with this Warrant.

         12.  Counterparts.  This  Warrant  may be  executed  in any  number  of
counterparts and each of such  counterparts  shall for all purposes be deemed to
be an original,  and all such counterparts shall together constitute but one and
the same instrument.

         13. Descriptive Headings.  Descriptive headings of the several Sections
of this  Warrant  are  inserted  for  convenience  only and shall not control or
affect the meaning or construction of any of the provisions hereof.

         IN WITNESS  WHEREOF,  the Company has  executed  this Warrant as of the
_____ day of May 2004.

                                         RASER TECHNOLOGIES, INC.

                                         By:
                                            ------------------------------------
                                         Name: ________________________________
                                         Title: _______________________________



                                       18
<PAGE>

                          NOTICE OF EXERCISE OF WARRANT

         The  undersigned  hereby  irrevocably  elects to  exercise  the  right,
represented by the Warrant Certificate dated as of , , to purchase shares of the
------------------------ ------- ---------------------

         Common Stock, $0.01 par value, of RASER TECHNOLOGIES, INC., and tenders
herewith  payment in  accordance  with Section 1 of said Common  Stock  Purchase
Warrant.

                  CASH: $                   = (Exercise Price x Exercise Shares)
                        -------------------

                  Payment is being made by:
                                    enclosed check

                                    wire transfer

                                    other

         Please deliver the stock certificate to:





Dated:



[Name of Holder]

By:





                                       19