In this task, you're given a passage that represents a legal contract or clause between multiple parties. Your job is to write questions that ask the basic details corresponding to the legal contracts or clauses. Avoid questions that can be answered correctly without actually understanding the paragraph, and which might have multiple answers. The answer to each question should be unambiguous.

[EX Q]: Exhibit 10.6

      OUTSOURCING AGREEMENT        dated as of , 2012        TWIN CITIES POWER HOLDINGS, LLC        and        REDWATER LLC

      $50,000,000.00        Renewable Unsecured Subordinated Notes





     TABLE OF CONTENTS                                                                                                               ARTICLE I DEFINITIONS    1            Section 1.01 Defined Terms    1





Section 1.02 Accounting Terms    4            ARTICLE II APPOINTMENT OF THE AGENT AND RELATED AGREEMENTS    5            Section 2.01 Appointment; Exclusivity    5   Section 2.02 Scope of Agency    5   Section 2.03 Compensation to the Contractor    6   Section 2.04 Brokers and Dealers    8   Section 2.05 The Contractor's Unrelated Activities    8   Section 2.06 Best Efforts; Independent Contractor    8   Section 2.07 Issuance and Payment    8            ARTICLE III SERVICES; STANDARD OF CARE    8            Section 3.01 Services for the Notes    8   Section 3.02 Maintenance of Files and Records    11   Section 3.03 Monthly Reports to the Company    12            ARTICLE IV REPRESENTATIONS AND COVENANTS OF THE COMPANY    13            Section 4.01 Representations, Warranties and Agreements of the Company    13   Section 4.02 Covenants of the Company    20            ARTICLE V REPRESENTATIONS AND COVENANTS OF THE AGENT; CONDITIONS    22            Section 5.01 Representations and Warranties of the Contractor    22   Section 5.02 Covenants of the Contractor    24            ARTICLE VI CONDITIONS    25            Section 6.01 Conditions of the Contractor's Obligations    25   Section 6.02 Conditions of the Company's Obligations    31            ARTICLE VII INDEMNIFICATION AND CONTRIBUTION    31







    Section 7.01 The Company's Indemnification of the Contractor    31   Section 7.02 The Contractor's Indemnification of the Company    32   Section 7.08 Intellectual Property Infringement    35   Section 7.09 Confidentiality    35            ARTICLE VIII TERM AND TERMINATION    36            Section 8.01 Effective Date of this Agreement    36   Section 8.02 Termination Prior to Initial Closing Date    36   Section 8.03 Notice of Termination    37   Section 8.04 Termination After Initial Closing Date    37   Section 8.05 Termination Without Termination of Offering    38            ARTICLE IX MISCELLANEOUS    38







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                              Section 9.01 Survival    38   Section 9.02 Notices    38   Section 9.03 Successors and Assigns; Transfer    39   Section 9.04 Cumulative Remedies    39   Section 9.05 Attorneys' Fees    39   Section 9.06 Entire Agreement    39   Section 9.07 Choice of Law; Venue    39   Section 9.08 Rights to Investor Lists    39   Section 9.09 Waiver; Subsequent Modification    40   Section 9.10 Severability    40   Section 9.11 Joint Preparation    40   Section 9.12 Captions    40   Section 9.13 Counterparts    40   Section 9.14 Third Party Contractors    40





     OUTSOURCING AGREEMENT     This OUTSOURCING AGREEMENT is entered into as of this  day of , 2012 by and between Twin Cities Power Holdings, LLC, a  Minnesota limited liability company (the Company), and Redwater LLC, a Minnesota limited liability company (the Contractor).     RECITALS     WHEREAS, the Company has registered for public offer and sale an aggregate principal amount of $50,000,000.00 of renewable,  unsecured, subordinated notes of the Company; and     WHEREAS, subject to the termination rights set forth herein, the Company desires to retain the Contractor to perform certain ministerial  tasks on behalf of the Company, and Contractor desires to accept such duties, all as provided for by the terms of this Agreement.     NOW, THEREFORE, in consideration of the above and for other good and valuable consideration, receipt of which is acknowledged, and  in consideration of the mutual promises, covenants, representations and warranties hereinafter set forth, the parties hereto agree as follows:     ARTICLE I  DEFINITIONS     Section 1.01 Defined Terms. Whenever used in this Agreement, the following terms have the respective meanings set forth below. The  definitions of such terms are applicable to the singular as well as to the plural forms of such terms.     Accepted Note Practices. As applicable to the context in which this term is used, those procedures and practices with respect  to the servicing and administration of the Notes that satisfy the following: (i) the use of reasonable care; (ii) compliance with  all Governmental Rules; (iii) compliance with the provisions of this Agreement and the Indenture; and (iv) give due  consideration to the accepted standards of practice of prudent servicing firms that service or administer comparable programs  for publicly offered notes or securities and the reliance of the Company on the Contractor for the servicing and administration  of the Renewable Note Program.     Contractor. Redwater LLC, a Minnesota limited liability company, or its successors in interest or assigns, if approved by the  Company as provided in Sections 5.02(c) and 9.03, below.     Agreement. This Outsourcing Agreement, including any exhibits or attachments hereto, as originally executed, and as  amended or supplemented from time to time in accordance with the terms hereof.     Business Day. Any day other than (a) a Saturday or Sunday or (b) another day on which banking institutions in the the State  of Minnesota are authorized or obligated by law, executive order, or governmental decree to be closed.

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     Commission or SEC. The Securities and Exchange Commission.     Company. Twin Cities Power Generation, or its successors or assigns, if approved by Contractor as provided in Section 9.03,  below.     Due Period. The monthly, quarterly, semi-annual, or annual periods, or the full term of the Note if interest is due at maturity, for  which scheduled payments of interest will be paid on any Note.     Exchange Act. The Securities Exchange Act of 1934, as amended, and as hereafter amended, and the rules and regulations  thereunder.     Governmental Rules. Any law, rule, regulation, ordinance, order, code, interpretation, judgment, decree, policy, decision or  guideline of any governmental agency, court or authority.     Holder. The registered owner of any Note as it appears on the records of the Registrar, including any purchaser or any  subsequent transferee or other holder thereof.     Incorporated Documents. All documents that, on or at any time after the effective date of the Registration Statement, are  incorporated by reference therein, in the Prospectus, or in any amendment or supplement thereto.     Indenture. That certain Indenture dated on or about , 2012, by and between the Company and the Trustee with respect to the  Notes as the same may be amended or supplemented in accordance with its terms, and including a supplement dated , 2012.     Investor. Any person who purchases Notes or who contacts the Contractor expressing an interest in purchasing the Notes or  requesting information concerning the Notes.     Material Agreement. With respect to a person, any agreement, contract, joint venture, lease, commitment, guaranty or other  contractual arrangement or any bond, debenture, indenture, mortgage, deed of trust, loan or security agreement, note,  instrument or other evidence of indebtedness, which in the case of any of the foregoing is material to the business, assets,  operations, condition or prospects, financial or otherwise, of such person or which is material to the ability of such person to  perform its obligations under this Agreement.     FINRA. Financial Industry Regulatory Authority.     Note Confirmation. With respect to the issuance and ownership of the Notes in book-entry form, an appropriate written  confirmation of the issuance and ownership or transfer of ownership of a Note to a Holder, the format of which shall comply  with the provisions of the Indenture.     2





     Note Portfolio. The aggregate of individual Notes, as it exists from time to time, which, unless the context otherwise requires or  provides, determined by the principal balances of the outstanding Notes.     Notes. The renewable, unsecured, subordinated notes of the Company that are being offered and sold pursuant to the  Registration Statement and that have an aggregate principal amount up to $50,000,000 and such other terms as described in  the Prospectus, and any additional principal amount of the same or similar notes as may be registered from time to time  pursuant to the Registration Statement.     Offering. The offer and sale of the Notes in accordance with the terms and subject to the conditions set forth in the  Registration Statement.     Paying Agent. Bank, National Association or its successors or assigns, or such other paying agent with respect to the Notes  as may be subsequently appointed by the Company pursuant to the Indenture.     Paying Agent Agreement. That certain agreement by and between the Company and the Paying Agent relating to the  Company's engagement of the Paying Agent to act as the paying agent for the Notes.     Paying Agent Fees. All fees and expenses payable to the Paying Agent in accordance with the Paying Agent Agreement.     Proprietary Rights. All rights worldwide in and to copyrights, rights to register copyrights, trade secrets, inventions, patents,  patent rights, trademarks, trademark rights, confidential and proprietary information protected under contract or otherwise  under law, and other similar rights or interests in intellectual or industrial property.     Prospectus. The prospectus included in the Registration Statement at the time it was declared effective by the Commission, as  supplemented by all prospectus supplements (including interest rate supplements) related to the Notes that are filed with the  Commission pursuant to Rules 424(b) or (c) under the Securities Act. References to the Prospectus shall be deemed to refer to  and include the Incorporated Documents to the extent incorporated by reference therein.     Redemption Payment. The payment of principal plus any accrued and unpaid interest that is being made at the discretion of  the Company in accordance with the Indenture.     Registration Statement. That certain Registration Statement on Form S-1 (File No. - ) of the Company with respect to the Notes  filed with the Securities and Exchange Commission under the Securities Act on or about , 2012, as amended and declared  effective by the Commission, including the respective copies thereof filed with the Commission. References to the     3





     Registration Statement shall be deemed to refer to and include the Incorporated Documents to the extent incorporated by  reference therein.     Renewable Note Program. The marketing, administration, customer service and investor relations, registration of ownership,  reporting, payment, repurchase, redemption, renewal and related activities associated with the Notes.     Repurchase Payment. The payment of principal plus any accrued and unpaid interest, less any penalties upon the repurchase  of any Note, that is being made at the request of the Holder in accordance with the Indenture.     Scheduled Payment. For any Due Period and any Note, the amount of interest and/or principal indicated in such Note as  required to be paid by the Company under such Note for the Due Period and giving effect to any rescheduling or reduction of  payments in any insolvency or similar proceeding and any portion thereof.     Securities Act. The Securities Act of 1933, as amended, and as hereafter amended, and the rules and regulations thereunder.     Subscription Agreement. A subscription agreement entered into by a Person under which such Person has committed to  purchase certain Notes as identified thereby, in such form and substance as mutually agreed by the parties and as filed as an  exhibit to the Registration Statement.     Trust Account. The trust account established by the Trustee pursuant to the Indenture.     Trust Indenture Act. The Trust Indenture Act of 1939, as amended, and as hereafter amended, and the rules and regulations  thereunder.     Trustee. Bank, National Association, or its successors or assigns, or any replacement Trustee under the terms of the  Indenture.     Trustee's Fees. All fees and expenses payable to the Trustee in accordance with the Indenture.     Section 1.02 Accounting Terms. Unless otherwise specified in this Agreement, all accounting terms used in this Agreement shall be  interpreted, all accounting determinations under this Agreement shall be made, and all financial statements required to be delivered by any person  pursuant to this Agreement shall be prepared, in accordance with U.S. generally accepted accounting principles, as in effect from time to time and  as applied on a consistent basis. To the extent such principles do not apply to certain reports or accounting practices of the Contractor, the parties  will mutually agree on the accounting practices and assumptions.     4

   ARTICLE II  RETENTION OF THE CONTRACTOR AND RELATED AGREEMENTS     Section 2.01 Retention.  On the basis of the representations, warranties and agreements herein contained, and subject to the terms,  conditions and covenants set forth herein during the term of this Agreement, the Company retains the Contractor to perform the tasks specified  herein on behalf of the Company related to servicing of the Notes, in each case, under the Renewable Note Program upon the terms and conditions  set forth herein, including, without limitation, compliance and conformity with Accepted Note Practices and Governmental Rules, and the  Contractor agrees to use its best efforts perform such tasks until the later of the termination of the Offering or the sale of all of the Notes, or until  the termination of this Agreement, if earlier. In connection with the servicing of the Renewable Note Program, the Contractor will carry out the  duties provided for herein.     Section 2.02 Scope of Duties. In the performance of its duties hereunder, the Contractor shall have only such power and authority to take  action for purposes of servicing the Notes, under the Renewable Note Program that the Company, in its discretion, deems necessary or  appropriate, subject in all respects to compliance and conformity with Accepted Note Practices and Governmental Rules. Initial instructions of the  Company to the Contractor are set forth in Exhibit B to this Agreement, which Company may, in its discretion, amend and supplement from time to  time. In the performance of its duties hereunder, the Contractor shall (i) act as the agent of the Company in connection with the Renewable Note  Program; (ii) promptly forward to the Company all Subscription Agreements, notices or other documents received by it in connection with the  Renewable Note Program for the sole and exclusive use and benefit of the Company; and (iii) make dispositions of the items in clause (ii) only in  accordance with this Agreement or at the written direction of the Company. Except as set forth in this Agreement with respect to the Renewable  Note Program, the Contractor shall have no authority, express or implied, to act in any manner or by any means for or on behalf of the Company.     Section 2.03 Compensation to the Contractor.     (a) The Contractor's Fees. In consideration of the agreement of the Contractor to provide its services as set forth in this  Agreement, the Company will pay the Contractor the following amounts:     (i) a monthly service fee of $7.50 per note based on the maximum number of notes outstanding during the  month, subject to a monthly minimum of $2,500;     (ii) a fee for media services further described in Exhibit A equal to the 15% gross/net differential or the fee  equivalent thereof;     (iii) a fulfillment fee of $2.00 per investment kit mailed;     (iv) a fulfillment fee of $1.00 per address for each bonus offer or marketing postcard mailed, subject to a $10,000  maximum per project.     5









     (b) The Contractor's Expenses. Except as otherwise provided in this Agreement, each party shall bear all of its own expenses.  To the extent that the Company agrees herein to pay specified offering-related expenses such as all marketing and advertising costs,  the Company will pay or cause to be paid such expenses whether incurred prior or subsequent to the date of this Agreement     (c) Payment of Fees. On the first Business Day of each month, or as soon thereafter as practicable, the Contractor shall provide  the Company with a written invoice for the previous month's fees and expenses that are payable with respect to Notes issued up to the  last day of such month.. Such fees and expenses will be due and payable by the later of the fifteenth (15 ) day of every month or fifteen  (15) days after the date such invoice is received.     Section 2.04 Brokers and Dealers. At the discretion of the Company, the Company may, at no additional obligation or expense to the  Contractor, use the services of brokers or dealers who are members in good standing of FINRA in connection with the offer and sale of the Notes.  The Company may enter into agreements with any such broker or dealer to act as its agents for the sale of the Notes and shall be solely  responsible for the payment of any portion of the Contractor's compensation hereunder to such broker or dealer. The Contractor's administrative  services will apply to all notes sold by brokers or dealers and the Company will compensate the Contractor for such services in accordance with  Section 2.03.     Section 2.05 The Contractor's Unrelated Activities. The Company agrees that the Contractor may service renewable note programs for  other issuers during the course of the Offering, but such activities shall not prevent the Contractor from promptly and efficiently performing its  duties hereunder. The Contractor (and the Agency as defined in Section 3.01(b) below) may direct other issuers to advertise the securities of other  issuers on websites, in print, by radio, or by any other means and at such times as they may determine; provided, however, that any such  advertising which refers to the Notes shall not refer to, mention, or advertise any securities or notes of any other issuer, nor include any links to  any other issuer, renewable note program or offering. The Contractor shall have the right to advertise or otherwise disclose to unrelated  prospective issuers, at its own expense, its relationship with the Company, the services it provides in connection with the Notes and the amount of  money that it raised through the Offering and the performance of the Offering, subject to the Company's consent, which shall not be unreasonably  withheld.     Section 2.06 Independent Contractor. The Contractor shall have no obligation to purchase Notes for its own account. During the term of  this Agreement, all actions taken by the Contractor pursuant to this Agreement shall be in the capacity of an independent contractor, and in no  event shall the Contractor have any obligations under the Notes.     Section 2.07 Issuance and Payment. The Notes shall be issued pursuant to the Indenture and all Scheduled Payments, Redemption  Payments and Repurchase Payments shall be made by automated clearing house (i.e., ACH) remittance from the Trust Account by the Paying  Agent in accordance with the Paying Agent Agreement and the Indenture.     6

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     ARTICLE III  SERVICES; STANDARD OF CARE     Section 3.01 Services for the Notes. The services to be provided to the Company by the Contractor pursuant to and during the term of  this Agreement shall include the following:     (a) Marketing and Advertising. During the term of this Agreement, the Contractor shall develop and execute a direct response  marketing strategy for the Notes designed to meet the Company's capital goals in a timely manner, which shall be subject to the prior  approval of the Company. The Contractor shall also oversee designing and printing all marketing materials (subject to the prior  approval of the Company), in accordance with the Securities Act, including the applicable rules and regulations and any other  requirements of the SEC and any other Governmental Rules. The Contractor will provide the Company with media planning, media  buying, media production and media placement services related to the Offering. All ad placements and use of all marketing materials  shall be subject to the prior written approval of the Company. The Company will pay all marketing and advertising costs related to the  offering, including printing, postage, advertising and web site hosting.     (i) During the term of this Agreement, the Company hereby grants the Contractor a limited license to use the  Company's logo, corporate colors, trademarks, trade names, fonts, and other aspects of corporate identity in  advertisements and marketing materials related to the Notes and on the Contractor's website, subject to the Company's  prior written approval of the specific use of these items in writing in each instance (which shall not be unreasonably  withheld). The Contractor will not make use of the Company's logo, corporate colors, trademarks or trade names in any  manner that would reasonably be expected to disparage or damage such marks or the reputation of the Company or  diminish the Company's goodwill. It is expressly agreed that the Contractor is not acquiring any right, title or interest in  the Company's logo, corporate colors, trademarks, trade names or other intellectual property.     (b) Subscription, Sale and Ownership. During the term of this Agreement, the Contractor shall promptly forward to the  Company each Subscription Agreement for the Notes received from an Investor. The Company shall be responsible for determining  whether (i) such subscription shall be accepted, (ii) such agreement is complete and accurate in all material respects, including without  limitation the execution thereof by such Investor, (iii) such Investor timely remits the proper purchase price for the Notes in accordance  with the Subscription Agreement, and (iv) the principal amount, interest rate and term to maturity and any other material terms of the  Notes are verified for accuracy and completeness. Upon delivery by each Investor of a completed Subscription Agreement for Notes  and full payment of the principal amount of such Notes in accordance with the Investor's Subscription Agreement, and subject to the  acceptance of the Subscription Agreement by the Company, the Company shall promptly notify the Contractor and the Contractor shall  promptly (i) verify that the payment of the principal amount of such Investor's accepted subscription for the Notes     7





     is being remitted to the Company in accordance with the Subscription Agreement in an account established by the Company for such  purpose or in such other manner as may be directed by the Company from time to time, and (ii) remit to the Trustee electronic or hard  copies of all accepted Subscription Agreements and related records as may be reasonably requested by the Trustee, including without  limitation, a record of each deposit relating to the payment of the subscription amount of the Notes. Pursuant to the preceding  sentence, Notes shall be issued by the Contractor as the Company's Registrar in book-entry form only and the Contractor shall deliver  a Note Confirmation to each Holder with respect to such Holder's respective accepted Subscription Agreement and the receipt of full  payment for such Holder's Notes. In the event that the Company rejects a Subscription Agreement, the Contractor shall promptly  return the Subscription Agreement and the related subscription amount to the related Investor. The Company hereby appoints the  Contractor, and the Contractor hereby accepts such appointment, as its initial Registrar (as such term is defined in the Indenture) for  the Notes pursuant to the terms of the Indenture. For so long as the Contractor shall serve as the Registrar for the Notes, the  Contractor shall perform, in accordance with the terms of the Indenture, all of the duties and obligations of the Registrar under the  Indenture, including, without limitation, the obligation to maintain a book-entry registration and transfer system for the ownership of  the Notes in accordance with the terms of the Indenture.     (c) Investor Relations and Reporting. During the term of this Agreement the Contractor, in conjunction with the Trustee, shall perform  ministerial tasks included in the customer service and investor relations functions with respect to the Offering, as directed from time to time by the  Company, which may include, but not be limited to, handling inquiries from Investors in a manner consistent with Section 3.01(d), mailing  investment kits, delivering to each Investor the Prospectus and Subscription Agreement, and processing Subscription Agreements. The  Contractor shall to the best of its knowledge ensure that each person submitting a Subscription Agreement shall have received the Prospectus. An  Investor who visits the offering web site shall be deemed to have received the Prospectus, provided such person either delivers an Electronic  Delivery Consent Form with such Investors Subscription Agreement or certifies under penalties of perjury that he, she or it has received the  Prospectus.     (d) The Contractor shall forward to the Company written or telephonic questions by Investors and Holders relating to the Notes regarding  topics that are not addressed in the Prospectus or its supplements, including without limitation questions relating to the Company's finances and  business, the Company's performance and practices with regard to the Notes, and substantive matters regarding an investment in the Notes,  unless such questions can be answered solely by reference to the Company's SEC filings. Notwithstanding the foregoing, the Contractor may  respond to questions that are purely administrative or ministerial in nature. The Contractor shall also be responsible for recording changes in  Holders' addresses or accounts, preparing and issuing maturity and renewal notices, quarterly statements, newsletters, reports and analyses to  Holders and to the Company, directing the Paying Agent to make Scheduled Payments, Repurchase Payments and Redemption Payments to  Holders in a timely manner, and directing the Paying Agent to issue Form 1099INT's to Holders as required by law. In addition, the Contractor  shall provide the Trustee (and copy the Company) with management reports regarding the Notes as required under the Indenture.     8





     (e) Web Site Development. Subject to compliance and conformity with Accepted Note Practices by the Contractor, the Contractor (or a  third party service provider working at the Contractor's direction) shall assist the Company in developing a dedicated Internet web site separate  from the Company's corporate site to allow Investors to view online and download copies of the Offering documents (including the Prospectus  and Subscription Agreement) and marketing materials that are included in the investment kit or comparable information.     (f) Ownership of Web Pages. Any and all web pages used by Contractor in connection with the Offering (the Web Pages), and all  associated Proprietary Rights, shall be owned exclusively by the Company.     (g) Daily Payment Reports to Company. On each Business Day during the term of the Notes, the Contractor shall furnish daily reports to  the Company that detail and summarize the amount of cash that is required to pay interest and principal on the Notes.     Section 3.02 Maintenance of Files and Records. The Contractor shall establish and maintain at all times during the term of this  Agreement files and records (including, without limitation, computerized records) regarding the Notes and the Note Portfolio, with full and correct  entries of all transactions or modifications in a reasonably secure, up-to-date manner and in accordance with the following:     (a) Location. All Note and Note Portfolio files and records shall be stored and maintained at the Contractor's principal place of  business, or other location as designated by the Company. The Contractor shall keep in such files all correspondence received or sent  regarding each Note, each Investor, and each Holder, whether upon any purchase or transfer of a Note.     (b) Original Documents. The Contractor will store all original Subscription Agreements, Note Confirmations, correspondence  from Investors and Holders and other materials relating to the Renewable Note Program in a reasonably secure manner at the  Contractor's principal offices or such other location as may be designated by the Company. The Contractor shall exercise due care in  handling and delivering the original documents and the other documents in the Note files and records. The Contractor shall not grant  or allow any person an interest in original documents or rights thereunder, and all original documents in the possession of the  Contractor shall be deemed to be in the possession of the Company.     (c) Examination. At any time the Company and its agents and representatives may physically inspect any documents, files or  other records relating to the Renewable Note Program and discuss the same with the Contractor's officers and employees. The  Contractor shall supply copies of any such documents, files, or other records upon the request of the Company, as soon as is  reasonably and commercially practicable at the Company's cost and expense.     (d) Retention. Unless otherwise requested by the Company, or unless otherwise required by Governmental Rules, the  Contractor shall retain, with respect to     9





     each Note, for a period of 24 months from the date the Note is fully paid, all records, files and documents related to each such Note. At  the end of such 24-month period, unless otherwise directed by the Company, all such items shall be transferred to the Company, or to a  third party as designated by the Company, at the Company's sole cost and expense. The Contractor shall be permitted to retain copies  of any such documents for its own files for its own account and at its own expense. The Contractor shall maintain the privacy of the  Investors and Holders in accordance with all applicable Governmental Rules.     (e) Return. If this Agreement is terminated, or otherwise at the instruction of the Company, the Contractor shall promptly  deliver to the Company or its designee, as the case may be, all Note files and records (including, without limitation, copies of  computerized records and servicing and other software, except as may be prohibited by any third party contract or license) related to  the administration of the Notes and all monies collected by it relating to the Renewable Note Program (less any fees or expenses due to  the Contractor). The Contractor shall be entitled to make and keep copies of such records, at its cost and expense. In addition to  delivering such data and monies, the Contractor shall use its best efforts to effect the orderly and efficient transfer of the administration  of the Notes to the Company or other party designated by the Company to assume responsibility for such administration, including,  without limitation, directing Holders to remit all repurchase or other notices to the address designated by the Company. All costs of  conversion and transfer of such records to the Company or another agent shall be paid by the Company.     (f) Security. The parties shall take appropriate security measures to protect customer nonpublic personal information (NPI),  as defined in the Gramm-Leach-Bliley Act of 1999, Title V, and its implementing regulations, against accidental or unlawful destruction  and unauthorized access, tampering, and copying during storage in either party's computing or paper environment. Access to NPI  must be restricted to only the personnel that have a business need relating to the Renewable Note Program. NPI must be stored in a  secured format within all systems at both parties' location and any other locations where the data may reside. Transmission of such  NPI between the parties or vendors must be done in a secure manner, in a method mutually agreed upon by both parties. Each party will  engage appropriate and industry-standard measures necessary to meet information security guidelines as required by the Gramm- Leach-Bliley Act, Title V and its implementing regulations as applicable to such party to effectuate this Agreement.     Section 3.03 Information to the Company. As agreed by the parties, the Contractor shall make reports and analyses available to the  Company regarding the status of the Note Portfolio, the marketing results and the amount of Notes remaining available for issuance under the  Registration Statement. The Contractor shall also provide interim or custom reports at the Company's request as is commercially reasonable,  including, without limitation, a weekly update via email identifying new Holders by name, address and principal amount of Notes purchased. The  Contractor shall also furnish statements, reports and information to the Paying Agent to the extent that the Company is required to furnish or  cause to be furnished such statements, reports or information to the Paying Agent under the Paying Agent Agreement.     10





     ARTICLE IV  REPRESENTATIONS AND COVENANTS OF THE COMPANY     Section 4.01 Representations, Warranties and Agreements of the Company. The Company represents and warrants to and agrees with  the Contractor as follows, which representations and warranties shall be deemed to be made continuously from and as of the date hereof until this  Offering is terminated and all then outstanding Notes have been paid in full or such earlier date that this Agreement has been terminated, except  for those representations and warranties that address matters only as of a particular date, which representations and warranties shall be deemed to  be made as of such date.     (a) The Company satisfies all of the requirements for the use of Form S-1 with respect to the offer and sale of securities as  contemplated by the Offering. The Commission has not issued any order preventing or suspending the use of the Registration  Statement or Prospectus and no proceeding for that purpose has been instituted or, to the Company's knowledge, threatened by the  Commission or the securities authority of any state or other jurisdiction.     (b) The Company has full requisite power and authority to enter into this Agreement and perform the transactions  contemplated hereby. This Agreement has been duly authorized, executed and delivered by the Company and is a valid and binding  agreement on the part of the Company, enforceable against the Company in accordance with its terms subject to bankruptcy,  insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors'  rights and to general principles of equity. The performance of this Agreement and the consummation of the transactions herein  contemplated will not result in a breach or violation of any of the terms and provisions of, or constitute a default under:     (i) any Material Agreement to which the Company or any subsidiary is a party or by which the Company or  any subsidiary or their respective properties may be bound;     (ii) the articles of incorporation or bylaws of the Company, or     (iii) any applicable law, order, rule, regulation, writ, injunction, judgment or decree of any court, government or  governmental agency or body, domestic or foreign, having jurisdiction over the Company or any subsidiary or their  respective properties.     (c) No consent, approval, authorization or order of or qualification with any court, governmental agency or body, domestic or  foreign, having jurisdiction over the Company or over its properties is required for the execution and delivery of this Agreement and  the consummation by the Company of the transactions herein contemplated, except such as may be required under the Securities Act,  the Exchange Act, the Trust Indenture Act, or under state or other securities or blue sky laws, all of which requirements have been  satisfied.     11





     Section 4.02 Covenants of the Company. The Company hereby covenants and agrees with the Contractor as follows:     (a) The Company will notify the Contractor promptly of the time when the Registration Statement or any post-effective  amendment to the Registration Statement has become effective or any supplement to the Prospectus has been filed and of any request  by the Commission for any amendment or supplement to the Registration Statement or Prospectus or additional information. In the  event that the Company files any amendment or supplement to the Registration Statement or Prospectus to which the Contractor shall  reasonably object, the Contractor will be relieved of its obligations with respect to the Offering (but not the administration) of the Notes  until such time as the Company shall have filed such further amendments or supplements such that the Contractor is reasonably  satisfied with the Registration Statement and the Prospectus, as then amended or supplemented.     (b) The Company will advise the Contractor, promptly after it shall receive notice or obtain knowledge thereof, of the issuance  by the Commission of any stop order suspending the effectiveness of the Registration Statement, of the suspension of the qualification  of the Notes for offering or sale in any jurisdiction, or of the initiation or receipt of any specific threat of any proceeding for any such  purpose.     (c) The Company will furnish to the Contractor copies of the Registration Statement, the Prospectus, and all amendments and  supplements to such documents, in each case as soon as available and in such quantities as the Contractor may from time to time  reasonably request.     (d) For such period as this Agreement may be in effect, the Company shall make available to the Contractor, as soon as the  same shall be sent to its stockholders generally, copies of all annual or interim stockholder reports of the Company and will, for the  same period, also furnish the Contractor one copy of any report, application or document (other than exhibits, which, however, will be  furnished on the Contractor's request) filed by the Company with the Commission, The Nasdaq Stock Market or any other securities  exchange.     (e) At all times during the term of this Agreement, the Company shall provide all information reasonably requested by the  Contractor that relates to the Renewable Note Program in a timely manner and shall use its best efforts to insure that such information  is complete and accurate.     (f) The Company will, during the term of this Agreement, furnish directly to the Contractor quarterly profit and loss statements  and reports of the Company's cash flow as reported on the applicable quarterly report on Form 10-Q.     12

   ARTICLE V  REPRESENTATIONS AND COVENANTS OF THE CONTRACTOR; CONDITIONS     Section 5.01 Representations and Warranties of the Contractor. The Contractor hereby represents and warrants to the Company as  follows, which representations and warranties shall be deemed to be made continuously from and as of the date hereof until this Offering is  terminated or such earlier date that this Agreement has been terminated:     (a) The Contractor (i) has been duly organized, is validly existing and in good standing as a Minnesota limited liability  company, (ii) has qualified to do business as a foreign corporation and is in good standing in each jurisdiction where the character of  its properties or the nature of its activities (including without limitation activities of the Contractor hereunder) makes such qualification  necessary, and (iii) has full power, authority and legal right to own its property, to carry on its business as presently conducted, and to  enter into and perform its obligations under this Agreement.     (b) The Contractor has full requisite power and authority to enter into this Agreement and perform the transactions  contemplated hereby. This Agreement has been duly authorized, executed and delivered by the Contractor and is a valid and binding  agreement on the part of the Contractor, enforceable against the Contractor in accordance with its terms subject to bankruptcy,  insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors'  rights and to general principles of equity. The performance of this Agreement and the consummation of the transactions herein  contemplated will not result in a breach or violation of any of the terms and provisions of, or constitute a default under:     (i) any Material Agreement to which the Contractor is a party or by which the Company or its properties may  be bound;     (ii) the articles of incorporation or bylaws of the Contractor, or     (iii) any applicable law, order, rule, regulation, writ, injunction, judgment or decree of any court, government or  governmental agency or body, domestic or foreign, having jurisdiction over the Contractor or over its properties.     (c) The Contractor has obtained all governmental consents, licenses, approvals and authorizations, registrations and  declarations which are necessary for the execution, delivery, performance, validity and enforceability of the Contractor's obligations  under this Agreement.     (d) The Contractor has operated and is operating in compliance with all authorizations, licenses, certificates, consents, permits,  approvals and orders of and from all state, federal and other governmental regulatory officials and bodies necessary to conduct its  business as contemplated by and described in this Agreement, all of which are, to the Contractor's knowledge, valid and in full force  and effect. The     13





     Contractor is conducting its business in compliance with all applicable Governmental Rules, laws, rules and regulations of the  jurisdictions in which it is conducting business, and the Contractor is not in violation of any applicable Governmental Rules, law, order,  rule, regulation, writ, injunction, judgment or decree of any court, government or governmental agency or body, domestic or foreign,  having jurisdiction over the Contractor or over its properties.     (e) The Contractor maintains insurance, which is in full force and effect, with insurers of recognized financial responsibility of  the types and in the amounts generally deemed adequate for its business and, to the best of the Contractor's knowledge, in line with  the insurance maintained by similar companies and businesses; and the Contractor has no reason to believe that it will not be able to  renew its existing insurance coverage as and when such coverage expires or obtain similar coverage from similar insurers as may be  necessary to continue its business at a cost that would not materially and adversely affect the financial condition or business  operations of the Contractor.     Section 5.02 Covenants of the Contractor. The Contractor hereby covenants to the Company as follows, which covenants shall be  deemed in force unless and until this Agreement is terminated as provided herein:     (a) The Contractor shall punctually perform and observe all of its obligations and agreements contained in this Agreement.     (b) The Contractor shall conduct its business in compliance with all applicable Governmental Rules, and its activities shall not  violate any governmental rules relating to the registration or the activities of securities brokers and dealers. To the extent that this  covenant to comply with all Governmental Rules conflicts with any other covenant contained in this Agreement, the covenant to  comply with all Governmental Rules shall control.     (c) Except as provided in this Agreement, the Contractor shall not take any action, or permit any action to be taken by others,  which would excuse any person from any of its covenants or obligations under any Note, or under any other instrument related to a  Note, or which would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or  effectiveness of, any Note or any such instrument or any right in favor of the Company in a Note or such instrument, without the  written consent of the Company.     (d) The Contractor shall not assign this Agreement or any of its rights, powers, duties or obligations hereunder without the  express prior written consent of the Company, which shall not be unreasonably withheld.     (e) At all times during the term of this Agreement, the Contractor shall provide all information relating to the Offering, the  Renewable Note Program or the Note Portfolio reasonably requested by the Company in a timely manner and shall use its best efforts  to insure that such information is complete and accurate in all material respects.     14





     (f) The Contractor shall take such additional action as is reasonably requested by the Company in order to carry out the  purposes of this Agreement. Such reasonable additional action includes, but is not limited to, cooperating with Company in verification  of Contractor's compliance, such as by providing copies of certificates of insurance and of other books and records of Contractor, and  by permitting inspection of the premises, books and records of Contractor.     ARTICLE VI  CONDITIONS     Section 6.01 Conditions of the Contractor's Obligations. The obligation of the Contractor to administer the Offering on a best efforts  basis as provided herein shall be subject to the accuracy of the representations and warranties of the Company, to the performance by the  Company of its obligations hereunder, and to the satisfaction of the following additional conditions:     (a) The Registration Statement shall be effective, and no stop order suspending the effectiveness thereof shall have been  issued and no proceedings for that purpose shall have been initiated or, to the knowledge of the Company, or the Contractor,  threatened by the Commission or any state securities commission or similar regulatory body. Any request of the Commission for  additional information (to be included in the Registration Statement or the Prospectus or otherwise) shall have been complied with to  the reasonable satisfaction of the Contractor and the Contractor's counsel.     (b) The Contractor shall not have advised the Company of its reasonable belief that the Registration Statement or Prospectus,  or any amendment thereof or supplement thereto, contains any untrue statement of a fact which is material or omits to state a fact which  is material and is required to be stated therein or is necessary to make the statements contained therein, in light of the circumstances  under which they were made, not misleading, or, if the Contractor has so advised the Company, the Company shall not have taken  reasonable action to investigate such belief and, where appropriate, amend the Registration Statement or supplement the Prospectus so  as to correct such statement or omission or effect such compliance.     (c) The Indenture shall have been duly authorized, executed and delivered by the Company and duly qualified under the Trust  Indenture Act.     (d) All corporate proceedings and other legal matters in connection with this Agreement, the form of Registration Statement  and the Prospectus, and the registration, authorization, issue, sale and delivery of the Notes shall have been reasonably satisfactory to  the Contractor's counsel, in all material respects, and the Contractor's counsel shall have been furnished with such papers and  information as it may reasonably have requested to enable it to pass upon the matters referred to in this Section.     15





     ARTICLE VII  INDEMNIFICATION AND CONTRIBUTION     Section 7.01 The Company's Indemnification of the Contractor. The provisions of Exhibit A hereto, entitled Responsibility of and  Indemnification by Agency are hereby incorporated herein by reference.     Section 7.02 The Contractor's Indemnification of the Company. The provisions of Exhibit A hereto, entitled Responsibility of and  Indemnification by Company are hereby incorporated herein by reference.     Section 7.03 Intellectual Property Infringement. The Contractor agrees that it shall defend, indemnify and hold harmless, at its own  expense, all suits and claims against the Company and any officers, directors, employees and affiliates of the Company (collectively, the Company  Indemnified Parties), for infringement or violation of any patent, trademark, copyright, trade secret or other intellectual property rights of any third  party that relates to this Agreement or the Offering, or servicing of the Notes. The Contractor agrees that it shall pay all sums, including without  limitation, reasonable attorneys' fees and other costs incurred by the Company, in defense of, by final judgment or decree, or in settlement of any  suit or claim asserted or assessed against, or incurred by, any of the Company Indemnified Parties on account of such infringement or violation,  provided that the Company Indemnified Parties involved shall cooperate in all reasonable respects with the Contractor and its attorneys in the  investigation, trial and defense of such lawsuit or action and any appeal arising therefrom; provided, however, that the Company Indemnified  Parties may, at their own cost, participate in the investigation, trial and defense of such lawsuit or action and any appeal arising therefrom. The  parties shall cooperate with each other in any notifications to insurers.     Section 7.04 Confidentiality. The parties to this Agreement acknowledge and agree that all information, whether oral or written,  concerning a disclosing party and its business operations, prospects and strategy, which is furnished by the disclosing party to the other party is  deemed to be confidential, restricted and proprietary to the disclosing party (the Proprietary Information). Proprietary Information supplied shall  not be disclosed, used or reproduced in any form except as required to accomplish the intent of, and in accordance with the terms of, this  Agreement and the Indenture. The receiving party shall provide the same care to avoid disclosure or unauthorized use of Proprietary Information  as it provides to protect its own proprietary information, including without limitation retaining Proprietary Information in a secure place with limited  access, but in no event shall the receiving party fail to use reasonable care under the circumstances to avoid disclosure or unauthorized use of  Proprietary Information. Unless otherwise specified in writing, all Proprietary Information shall (i) remain the property of the disclosing party, (ii) be  used by the receiving party only for the purpose for which it was intended under this Agreement and the Indenture, and (iii) together with all  copies of such information, be returned to the disclosing party or destroyed upon request of the disclosing party, and, in any event, upon  termination of this Agreement, except as otherwise provided or contemplated by this Agreement, including Sections 3.02(b) and (e) and 8.05  hereof. Proprietary Information does not include information which is: (a) published or included as disclosure within the Registration Statement or  otherwise available in the public domain through no fault of the receiving party; (b) lawfully received from a third party having rights in the  information without     16





     restriction of the third party's right to disseminate the information and without notice of any restriction against its further disclosure; or (c)  produced under order of a court of competent jurisdiction or other similar requirement of a governmental agency or authority, so long as the party  required to disclose the information provides the other party with prior notice of such order or requirement and its cooperation to the extent  reasonable in preserving its confidentiality. Because damages may be difficult to ascertain, and without limiting any other rights and remedies  specified herein, an injunction may be sought against the party who has breached or threatened to breach this Section.     ARTICLE VIII  TERM AND TERMINATION     Section 8.01 Effective Date of this Agreement. This Agreement shall become effective as of the date first set forth above, and shall  continue in full force and effect until terminated as provided below.     Section 8.02 Termination. The Company or the Contractor may terminate this Agreement at any time in whole or in part as more  specifically provided below, and in such case, the Contractor will be paid fees incurred up to the date of such termination plus its expenses  accrued as of such date within 30 days of such termination. The Company will have the ability to terminate this Agreement by giving 60 days' prior  written notice to the Contractor. The Contractor will have the ability to terminate this Agreement by giving 90 days' prior written notice to the  Company.     Section 8.03 Termination Without Termination of Offering. Anything to the contrary notwithstanding, the termination of this  Agreement shall not prevent the Company from commencing or cause the Company to terminate the Offering. In the event this Agreement is  terminated without a termination of the Offering, then the Company, or its agents, shall be entitled to use all materials developed by the Contractor  related to the Notes as provided elsewhere herein.     ARTICLE IX  MISCELLANEOUS     Section 9.01 Survival. The respective indemnity and contribution agreements of the Company and the Contractor set forth herein and the  respective representations, warranties, covenants and agreements of the Company and the Contractor set forth herein, shall remain operative and  in full force and effect, regardless of any investigation made by, or on behalf of, the Contractor, the Company, any of its officers and directors, or  any controlling person referred to in Article VII and shall survive the sale of the Notes and any termination or cancellation of this Agreement. Any  successor of any party or of any such controlling person, or any legal representative of such controlling person, as the case may be, shall be  entitled to the benefit of the respective indemnity and contribution agreements.     Section 9.02 Notices. All notices or communications hereunder, except as herein otherwise specifically provided, shall be in writing and  shall be mailed, delivered or transmitted by any standard form of telecommunication, as follows:     17







   Section 9.03 Successors and Assigns; Transfer. This Agreement shall inure to the benefit of and be binding upon the Contractor and  the Company and their respective successors and permitted assigns. Nothing expressed in this Agreement is intended or shall be construed to  give any person or corporation, other than the parties hereto, their respective successors and assigns, any legal or equitable right, remedy or claim  under, or in respect of, this Agreement or any provision herein contained; this Agreement and all conditions and provisions hereof being intended  to be and being for the sole and exclusive benefit of the parties hereto and their respective executors, administrators, successors, and for the  benefit of no other person or corporation. Neither party may assign its rights and obligations under this Agreement without the written consent of  the other party.     Section 9.04 Cumulative Remedies. Unless otherwise expressly provided herein, the remedies of the parties provided for herein shall be  cumulative and concurrent, and may be pursued singularly, successively or together, at the sole discretion of the party for whose benefit such  remedy is provided, and may be exercised as often as occasion therefor shall arise.     Section 9.05 Attorneys' Fees. In the event of any action to enforce or interpret this Agreement, the prevailing party shall be entitled to  recover reasonable attorneys' fees and costs, whether or not such action proceeds to judgment.     18

            If to the Contractor, to:



Redwater LLC   5400 Opportunity Court   Suite 160   Minneapolis, Minnesota 55343   Attention: K. Edward Elverud   Tel. (952) 345-3385                   If to the Company, to:



   Twin Cities Power Holdings, LLC   16233 Kenyon Avenue   Suite 210   Lakeville, Minnesota 55044      Attn: Chief Executive Officer      Tel. 952-431-0400                   with a copy to:



Leonard, Street and Deinard   150 South Fifth Street — Suite 2300   Minneapolis, Minnesota 55402      Attention: Mark S. Weitz      Tel. 612-335-1517





     Section 9.06 Entire Agreement. Except as otherwise expressly provided herein, this Agreement constitutes the entire agreement of the  parties hereto with respect to the matters addressed herein and supersedes all prior or contemporaneous contracts, promises, representations,  warranties and statements, whether written or oral (including, but not limited to, the Proposal), with respect to such matters.     Section 9.07 Choice of Law; Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of  Minnesota, without regard to conflict of law principles. Any dispute shall be heard in the courts of the state of Minnesota.     Section 9.08 Rights to Investor Lists. The parties acknowledge that the Offering will produce a list of investors that purchase Notes, a  list of prospects that respond to advertisements, but do not purchase any Notes, a list of former investors who redeemed their Notes, and a list of  former investors whose Notes the Company redeemed. Subject to any privacy laws, both the Company and the Contractor will be able to use these  lists for their own business purposes as long as doing so does not interfere with the marketing, sale or administration of the Notes.     Section 9.09 Waiver; Subsequent Modification. Except as expressly provided herein, no delay or omission by any party in insisting upon  the strict observance or performance of any provision of this Agreement, or in exercising any right or remedy, shall be construed as a waiver or  relinquishment of such provision, nor shall it impair such right or remedy, and no waiver by any party or any failure or refusal of the other party to  comply with its obligations under this Agreement shall be deemed a waiver of any other or subsequent failure or refusal to so comply by such  other party. No waiver or modification of the terms hereof shall be valid unless in writing and signed by the party to be charged, and then only to  the extent therein set forth.     Section 9.10 Severability. If any term or provision of this Agreement or application thereof to any person or circumstance shall, to any  extent, be found by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement, or the application of such  term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and  each term or provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.     Section 9.11 Joint Preparation. The preparation of this Agreement has been a joint effort of the parties and the resulting document shall  not, solely as a matter of judicial construction, be construed more severely against one of the parties than the other.     Section 9.12 Captions. The title of this Agreement and the headings of the various articles, section and subsections have been inserted  only for the purpose of convenience, are not part of this Agreement and shall not be deemed in any manner to modify, explain, expand or restrict  any of the provisions of this Agreement.     Section 9.13 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original,  but all of which together shall constitute one instrument.     Section 9.14 Third Party Contractors. In the event that the Company engages a third party to perform any of the obligations of the  Contractor under this Agreement, the Company      19





     shall provide written notice to the Contractor of such engagement, the Contractor shall thereafter be relieved of any such obligations for which the  third party was engaged.     [Remainder of page intentionally left blank]     20





     IN WITNESS WHEREOF, this Outsourcing Agreement is hereby entered into by the undersigned parties as of the date first set forth  above.

   21

Exhibit A    Media Services     The following describes the advisory services to be provided by Redwater LLC (Contractor) to Twin Cities Power Generation (Company) in  connection with the administration of Company's renewable, unsecured, subordinated notes (the Notes), as more specifically defined in, and  pursuant to the terms of, the Outsourcing Agreement to which this description is an exhibit.     1. Agent Services.     Agent will perform the following services for Company:     · Acting on the study, analysis and knowledge of the product described above, formulate and recommend a media plan to the  Company and coordinate the execution of such a plan as directed by the Company.     · Check and verify insertions, displays, broadcasts or other means used.     · Audit invoices for space and time and other marketing services performed on Company's behalf.     · Coordinate creative and copy development, direct mail services, literature fulfillment, commercial printing, list management, list  brokering, efficiency analysis and other similar activities.     2. General Provisions.

                                 TWIN CITIES POWER HOLDINGS, LLC                                        By:

          Name:

          Title:



                    REDWATER LLC.                                        By:

          Name:     K. Edward Elverud          Title:     Manager





     Approval of Expenditures: Contractor agrees to secure Company's written approval of all expenditures in connection with Company's  plans.     Cancellation of Plans: Company reserves the right to modify, reject, cancel or stop any and all plans, schedules or work in progress. In  such event Contractor shall take reasonable steps to carry out Company's instructions as promptly as practicable. Company agrees to assume  liability for all commitments made by Contractor on its behalf, and to reimburse Contractor for any losses (including cancellation penalties) that  Contractor may sustain derived therefrom and for all expenses incurred in connection with Company approved plans on its authorization, and to  pay Contractor any service charges relating thereto, in accordance with the provisions hereof.     Failure of Suppliers to Perform: Contractor will endeavor to the best of its knowledge and ability guard against any loss to Company  through failure of media or suppliers to properly execute their commitments, but shall not be held responsible for any failure on their part.     Confidentiality: Contractor acknowledges its responsibility to use all reasonable efforts to preserve the confidentiality of any proprietary  or confidential information or data developed by Contractor on behalf of Company or disclosed by Company to Contractor.     22





     Responsibility of and Indemnification by Agency: Contractor agrees to indemnify and hold Company, its officers, directors, agents and  employees harmless from and against any claims, liabilities, losses, costs, expenses, or the like, including reasonable attorneys' fees, incurred in  respect to any material breach by Contractor hereof or Contractor's negligence and/or intentional wrongdoing in connection with the services.     Responsibility of and Indemnification by Company: Company agrees to indemnify and hold Contractor, its officers, managers, directors,  agents and employees harmless from and against any claims, liabilities, losses, costs, expenses, or the like, including reasonable attorneys' fees,  incurred in respect to any material breach by Company of this Agreement or Company's negligence and/or intentional wrongdoing in connection  with the services. Company shall be responsible for the accuracy, completeness and propriety of information concerning its products and services  that it furnishes to Contractor in connection with the performance of the services.     3. Expenses and Fees.     · Company agrees to pay or prepay advertising, graphic design and printing expenses either directly to the respective vendors or to  the Contractor as required. The Company will pay the Contractor the difference between the published gross rates and the net  rates for all advertisements, graphic design services or printing services or an equivalent mark-up. All Contractor fees will be  subject to the approval of the Company.     · Refunds: Contractor shall refund or credit Company any other refunds received in connection with advertisements.     · Other Marketing Expenses. Subject to its prior approval, the Company agrees to pay Contractor for all reasonable out of pocket,  non-media charge marketing expenses related to the development and production of all direct marketing and promotional  materials.     5. Termination.     · Period of Services: The services described herein to be provided by Agency shall begin upon execution and delivery of the  Outsourcing Agreement and shall continue until termination of Contractor's activities to administer the Notes thereunder.     · Payment for Purchases and Work Done: Any materials, services, etc. Contractor has committed to purchase for Company's  account, or with Company's approval (or any uncompleted work previously approved by Company either specifically or as part  of a plan) prior to termination of the Services shall be paid for by Company in accordance with the provisions of this Agreement.     23





  Exhibit B   Service Standards     Initial Instructions of Company to Contractor pursuant to that certain Outsourcing Agreement dated as of , 2012, between Twin Cities Power  Holdings, LLC and Redwater LLC.     Geographical Limitations. Contractor shall not communicate with Investors resident in any state that is identified in the then-current Prospectus as  a state in which the Notes are not offered, other than to communicate, in substance, that the Notes are not offered to persons resident in such  states. The initial list of such states is as follows, but the Company may, in its discretion, amend such list by filing an amended Prospectus or a  supplement to Prospectus:     . [TBD]     24
[EX A]: Highlight the parts (if any) of this contract related to Third Party Beneficiary that should be reviewed by a lawyer. Details: Is there a non-contracting party who is a beneficiary to some or all of the clauses in the contract and therefore can enforce its rights against a contracting party?

[EX Q]: EXHIBIT 10.14

                            ENDORSEMENT AGREEMENT

      THIS ENDORSEMENT AGREEMENT (this Agreement), made and entered into as of May 31, 1999, by and between FAMOUS FIXINS, INC., 250 West 57th Street, Suite 2501, New York, New York 10107 (Company) and PEY DIRT, INC. (Pey Dirt).

                                  WITNESSETH

      WHEREAS, Company desires to obtain the right to use the name, likeness and endorsement of Peyton Manning (hereinafter called Manning) in connection with the advertisement, promotion and sale of Company's Products (hereinafter defined); and

      WHEREAS, Manning has granted such rights to Pey Dirt together with the right to sublicense such rights.

      NOW, THEREFORE, for and in consideration of the premises and of the mutual promises and conditions herein contained, the parties do hereby agree as follows:

      1.    Definitions.  As used herein, the following terms shall be defined as set forth below:

      (a)   Contract Period shall mean that period of time commencing as of May 31, 1999 and concluding May 31, 2000.

      (b)   Contract Territory shall mean the states of Indianapolis and Tennessee and Company's e-commerce site.

      (c)   Contract Year Quarter shall mean each 3 consecutive month period occurring during any Contract Year (Contract Year meaning any twelve month period herein commencing as of June 1) (so that, by way of example, the first Contract Year Quarter of the first Contract Year commences as of June 1, 1999, the second commences on September 1, 1999, etc.).

      (d)   Endorsed Products shall mean all Products of Company which have the Manning Identification (defined below) highlighted as a part thereof (in the Products' name or otherwise) or which are shipped in containers or packages bearing the Manning Identification.

      (e)   Manning Identification shall mean any words or symbols or photographic or graphic representations or combinations thereof which identify Manning such as, for example, the name and likeness of Manning.

      (f)   Premium Program shall mean any traffic builder, third party tie-in program or other program involving the use of a premium and shall include any program primarily designed to attract the consumer to purchase a product or service other than Endorsed Products themselves.

      (g)   Products shall mean cold breakfast cereals.

      2.    Grant of Endorsement Rights. (a) Pey Dirt grants to Company the exclusive right and license to use Manning Identification within the Contract Territory during the Contract Period in connection with the advertisement and promotion by Company of Products in television, radio, print and point of purchase.  Pey Dirt also grants to Company, subject to all of the terms and conditions herein, the non-exclusive right to use the Manning Identification in connection with certain merchandise that may be featured on the back panel of the Endorsed Products packaging, said merchandise to be subject to Pey Dirt's sole and exclusive discretion and approval.  Notwithstanding anything herein to the contrary, it is specifically agreed that the Manning Identification cannot be used, in whole or in part, in connection with (i) Premium Programs and/or (ii) any multi-media use except for Company's e- commerce site.  Pey Dirt expressly agrees that the right to use Manning Identification will not be granted to anyone other than Company for use within the Contract Territory during the Contract Period in connection with the advertisement, promotion and sale of Products.  Anything herein to the contrary notwithstanding, Company shall not have the right to distribute photographs of Manning which are larger than 5 x 7.

      (b)   Company agrees that during the Contract Period it will use its best efforts actively and aggressively to (i) promote the sale of all Endorsed Products in the Contract Territory, and (ii) prevent the sale of any Endorsed Products outside the Contract Territory.  Failure of Company to comply with the provisions of this Section 2(b) shall entitle Pey Dirt to revoke this license immediately (notwithstanding any other provision in this Agreement to the contrary).

      (c)   Pey Dirt has the right to terminate this Agreement immediately if Company's Endorsed Products are not being distributed in the Contract Territory to a significant number of stores by October 1, 1999.

      3.    Approvals.  Company agrees that no use whatsoever of Manning Identification nor any item used in connection with Manning Identification (including, without limitation, advertising) will be made hereunder unless





and until the same has been approved by Pey Dirt. Pey Dirt agrees that any material, advertising or otherwise, submitted for approval as provided herein may be deemed by Company to have been approved hereunder if the same is not disapproved in writing within fourteen (14) days after receipt thereof. Pey Dirt agrees that any material submitted hereunder will not be unreasonably disapproved and, if it is disapproved, that Company will be advised of the specific grounds therefor.  Company agrees to protect, indemnify and save harmless Pey Dirt and Manning, or either of them, from and against any and

                                      -2-

all expenses, damages, claims, suits, actions, judgments and costs whatsoever, arising out of, or in any way connected with, any advertising material furnished by, or on behalf of, Company.

      4.    Remuneration. (a) Within thirty (30) days following the conclusion of each Contract Year Quarter, Company shall deliver to Pey Dirt an itemized statement setting forth the total shipments of Endorsed Products during said Contract Year Quarter and, at the same time, shall pay to Pey Dirt a royalty with respect to such shipments as hereinafter provided.  Such royalties shall be based upon the actual invoice price of such shipments, exclusive only of shipping charges and sales taxes, and shall be at the rate of 8.5% of the total of said invoice prices with a minimum invoice price of $2.50 per box.

      (b)   In addition to the royalty payments set forth above, Company agrees to grant Pey Dirt an option to purchase an aggregate of 50,000 shares of Company's publicly traded and registered stock (the Shares) at an exercise price of $0.15 per share (the Option), which Option shall vest and become unrestricted when the SEC declares Company's registration statement effective (anticipated to be no later than November 30, 1999) and shall be exercisable until June 30, 2004.  As further inducement to Pey Dirt to enter into this Agreement, Company and Pey Dirt will enter into that certain Option Agreement dated as of the date of this Agreement, which shall govern all aspects of the Option.

      (c)   Further, Pey Dirt will be entitled to fifty percent (50%) of all gross profits (i.e., gross revenues less only Company's actual out-of-pocket costs of obtaining the raw merchandise) generated from merchandise related to the Endorsed Products and/or the Manning Identification, said merchandise to be advertised exclusively on the back panel of each box of Endorsed Products.  Except for the advertising of merchandise related to the Endorsed Products and/or the Manning Identification, no other use of the back panel of each box of Endorsed Products is permitted without Pey Dirt's prior written consent.  It is agreed that all such merchandise must be mutually approved in all respects by the parties hereto, including, without limitation, the style, design and cost thereof.

      (d)   In addition to and separate from any other remuneration hereunder, if Company uses any performance or service of Manning hereunder in any way that is subject to the jurisdiction of any applicable artists' union, guild or other organization (including, without limitation, SAG and AFTRA), either during or after the Contract Period, Company shall pay directly to such organization all minimum payments or fees (for benefit plans or otherwise) required to be made with respect to Manning's performance or services.

      (e)   If, at any time during the Contract Period, Company shall enter into any agreement (the terms of what are significantly the same as the terms hereof) in connection with the production and sale of Company's products using the name, likeness, photographic representation or signature of any other National Football League quarterback (active or retired), which agreement provides for the payment to such individual of remuneration in excess of that set forth herein, then Company agrees it will immediately so notify Pey Dirt

                                     -3-

and, at the same time, shall, retroactive to the effective date of such other agreement, increase the rate of remuneration paid to Pey Dirt hereunder up to the highest then-current rate paid by Company to any such National Football League quarterback (active or retired) for a regional endorsement deal.

      5.    Notices and Submissions.  Pey Dirt hereby designates International Merchandising Corporation, IMG Center, Suite 100, 1360 East 9th Street, Cleveland, Ohio 44114, Attn.: Peter Johnson, as Pey Dirt's authorized agent for all purposes hereunder.  All notices, submissions and/or requests for approval to be made, obtained or delivered by Company to Pey Dirt pursuant to this Agreement shall be delivered to said address free of all charges such as, for example, shipping charges and customs charges.  In the event that any such charges are paid by Pey Dirt or by Pey Dirt's authorized agent, Company agrees to make prompt reimbursement.

      6.    Payments; Books and Records. (a) Pey Dirt may elect to have





payments made by check, wire transfer or bank transfer.  Unless such election has been made in writing, all payments shall be made by check drawn to the order of Pey Dirt, Inc. and delivered to IMG, Suite 100, 1360 East 9th Street, Cleveland, Ohio 44114, Attn.: Peter Johnson.  Past due payments hereunder shall bear interest at the rate of (i) one and one-half percent (1-1/2%) per month, or (ii) the maximum interest rate permissible under law, whichever is less.

      (b)   Company agrees that it will keep accurate and complete records and books of account showing all Endorsed Products shipped by it and the price thereof.  Pey Dirt, or its representatives, shall, upon two weeks' written notice, have the right at all reasonable times (prior to the expiration of two (2) years after the termination of the Contract Period) to inspect and make copies of the books and records of Company insofar as they shall relate to the computation of royalties to be paid to Pey Dirt hereunder and the shipment of Endorsed Products pursuant to this Agreement.  In the event that any such inspections show an underreporting and underpayment in excess of five percent (5%) for any twelve (12) month period, then Company shall pay the cost of such examination.

      7.    Labels/Packaging. (a) It is understood that each of the Endorsed Products shipped by Company or its container or the packaging therefor shall have affixed thereto a label or other permanent identification which includes Manning Identification.

      (b)   It is hereby agreed that the back panel of the Endorsed Products' packaging will feature ad copy or offers as determined by Pey Dirt and its agent, subject to Company's right to reasonably reject such materials only if such materials are clearly offensive to a majority of the populace.  Any and all revenues generated by such ad copy or offers shall be disbursed in accordance with Section 4(c) above.  Further, the side panel of the Endorsed Products packaging shall feature a charity or other entity of Manning's sole choice.  All packaging costs shall be Company's sole responsibility.

                                      -4-

      8.    Trademarks.  Should Company, at any time or times during the Contract Period, desire to register a trademark or trademarks which include Manning Identification, or which relate in any manner to Manning, and/or to register Company as a user thereof, Pey Dirt shall execute any and all documents which the parties reasonably believe to be necessary or desirable for registration or protection of such trademark or trademarks in the name of Manning.  All costs related to any such trademarks shall be borne by Company, and ownership of any such trademarks shall rest solely in the name of Pey Dirt or its designee.  Upon registration of any such trademark, Pey Dirt shall grant to Company a license for the use of such registered trademark on or in connection with the advertisement, promotion and sale of Endorsed Products, which license shall be coextensive and coterminous with the rights granted thereunder with respect to Manning Identification and shall require no increase in the payments set forth but shall contain such additional provisions as Pey Dirt reasonably believes are necessary for the protection of such trademark registered in the name of Manning or Pey Dirt. Company agrees that it will not file, during the Contract Period or thereafter, any application for trademark registration or otherwise obtain or attempt to obtain ownership of any trademark or trade name within the Contract Territory or in any other country of the world which consists of Manning Identification or any mark, design or logo intended to make reference to Manning or to identify products endorsed by Manning.  In the event that, prior to the Contract Period, Company has filed one or more applications for registration of any such trademark, or otherwise has obtained any rights to such trademark, Company agrees to cause such applications and/or trademarks to be assigned and transferred to Pey Dirt forthwith.

      9.    Products for the Use of Pey Dirt. During the Contract Period, Company shall supply Pey Dirt and/or its agent with such amounts of Endorsed Products as Pey Dirt and/or its agent may reasonably request.  Company agrees to pay all charges in connection with the delivery of Endorsed Products to Pey Dirt and/or Pey Dirt's agent, including shipping charges, air freight charges and customs charges.  Company agrees to reimburse Pey Dirt's authorized agent for all such expenses incurred by it in connection with the transfer of Endorsed Products to Pey Dirt and/or Pey Dirt's agent.

      10.   Services of Manning.  If Company desires to utilize the services of Manning as a model in connection with photographs or drawings for advertising or for personal appearances, Pey Dirt agrees, at the reasonable request of Company and upon adequate notice, to provide the services of Manning at a time and place reasonably convenient to the schedule of Manning. Company agrees that it will reimburse Pey Dirt for reasonable travel (including first class air fare), lodging, ground transportation and meal expenses incurred by Manning and one traveling companion designated by Manning.  Company further agrees it will reimburse Pey Dirt's authorized agent for reasonable travel (including air fare), lodging and meal expenses incurred in providing one representative to accompany Manning.  Company understands that if services are requested hereunder, such services may be coordinated with similar services for others entitled to the use of Manning Identification in other connections.  Company further understands that such services may be required not more than once during the Contract Period for up to one (1) hour. In the event that Company elects to use the services of Manning in connection with television

                                      -5-





advertising, Company shall make all required union scale and union pension and welfare payments.  Company further understands that failure to utilize services of Manning pursuant to this section shall not result in any reduction in payments to Pey Dirt hereunder, nor may the obligation to provide services be carried past the Contract Period.  The obligations of Pey Dirt to provide the services of Manning hereunder are subject to the condition that payments to Pey Dirt are current and up to date.

      11.   Force Majeure.  If, at any time during this Agreement, Pey Dirt or Manning is prevented from or hampered or interrupted or interfered with in any manner whatever in fully performing its/his duties hereunder, by reason of any present or future statute, law, ordinance, regulation, order, judgment or decree, whether legislative, executive or judicial (whether or not valid), act of God, earthquake, fire, flood, epidemic, accident, explosion, casualty, lockout, boycott, strike, labor controversy (including but not limited to threat of lockout, boycott or strike), riot, civil disturbance, war or armed conflict (whether or not there has been an official declaration of war or official statement as to the existence of a state of war), invasion, occupation, intervention of military forces, act of public enemy, embargo, delay of a common carrier, inability without default on Company's part to obtain sufficient material, labor, transportation, power or other essential commodity required in the conduct of its business; or by reason of any cause beyond his reasonable control; or by reason of any other cause of any similar nature (all of the foregoing being herein referred to as an event of force majeure), then Pey Dirt's/Manning's obligations hereunder shall be suspended as often as any such event of force majeure occurs and during such periods of time as such events of force majeure exist and such non-performance shall not be deemed to be a breach of this Agreement.

      12.   Default. (a) If either party at any time during the Contract Period shall (i) fail to make any payment of any sum of money herein specified to be made, or (ii) fail to observe or perform any of the covenants, agreements or obligations hereunder (other than the payment of money), the non-defaulting party may terminate this Agreement as follows: as to subparagraph (i) if such payment is not made within ten (10) days after the defaulting party shall have received written notice of such failure to make payment, or as to subparagraph (ii) if such default is not cured within thirty (30) days after the defaulting party shall have received written notice specifying in reasonable detail the nature of such default.  In order to be a sufficient notice hereunder, any such written notice shall specify in detail each item of default and shall specify the provision of this Agreement which applies to each item of default, and shall specify in detail the action the defaulting party must take in order to cure each such item of default. The termination rights set forth in this section shall not constitute the exclusive remedy of the nondefaulting party hereunder, however, and if default is made by either party hereunder, the other may resort to such other remedies as said party would have been entitled to if this section had been omitted from this Agreement.  Termination under the provisions of this section shall be without prejudice to any rights or claims which the terminating party may otherwise have against the defaulting party.

                                      -6-

      (b)   Notwithstanding anything herein to the contrary, the cure periods set forth in subparagraphs (a)(i) and (a)(ii) above only apply to Company's first default under this Agreement.  Accordingly, Pey Dirt may, after Company's first default has occurred under either subparagraph (a)(i) or subparagraph (a)(ii) above and has been cured, thereafter immediately terminate this Agreement upon any further defaults by Company hereunder without providing Company an opportunity to cure any additional defaults.

      13.   Termination.  From and after the termination of the Contract Period all of the rights of Company to the use of Manning Identification shall cease absolutely and Company shall not thereafter use or refer to Manning Identification in advertising or promotion in any manner whatsoever, it being understood by Company that Manning Identification may be used at any time by others in connection with the advertisement and promotion of Products the shipment of which is completed after the termination of the Contract Period.  It is further agreed that following termination of the Contract Period, Company shall not advertise, promote, distribute or sell any item whatsoever in connection with the use of any name, figure, design, logo, trademark or trade name similar to or suggestive of Manning Identification.

      14.   Inventory of Endorsed Products on Termination/Expiration.  Any Endorsed Products that may have been manufactured by or for Company prior to the termination or expiration of the Contract Period may be sold by Company during the ninety (90) day period next following the date of termination or expiration; provided, however, that Company shall have no such rights unless (a) Company is not in default of any of its obligations hereunder on the date of termination or expiration, (b) within fifteen (15) days after the date of termination or expiration, Company shall furnish to Pey Dirt a written statement of the number and description of Endorsed Products actually in stock on the date of termination or expiration, (c) the quantity of Endorsed Products in stock on the date of termination or expiration is not in excess of a reasonable inventory based upon Company's selling requirements of Endorsed Products during the Contract Period, (d) Company shall continue to pay to Pey Dirt with respect to such sales a royalty at the rates specified herein, and (e) royalties payable pursuant to this section shall be paid within thirty (30) days following the end of each calendar month with respect





to shipments made during such month.

     15.   Collegiate/National Football League Trademarks.  Nothing contained herein shall be construed to convey to Company any rights to use the trademarks, logos or uniform of the University of Tennessee, the Indianapolis Colts, the National Football League or any other professional or amateur football association (including any member clubs or teams of such association) in conjunction with the rights granted hereunder.  All rights to the use of such trademarks, logos or team identification must be acquired from the University of Tennessee, the Indianapolis Colts, the National Football League, or any other appropriate rights holder.

      16.   Indemnity.  Company agrees to protect, indemnify and save harmless Pey Dirt, Pey Dirt's agent and Manning, or any of them, from and against any and all expenses, damages, claims, suits, actions, judgments and costs whatsoever, including reasonable attorneys' fees,

                                     -7-

arising out of, or in any way connected with, this Agreement, Company's default hereunder, the negligence, actions, errors or omissions of Company or any claim or action for personal injury, death or otherwise involving alleged defects in Company's Products, provided that Company shall be given notice of any such action or claim.  Company agrees to provide and maintain, at its own expense, general liability insurance and product liability insurance with limits no less than $3,000,000 and within thirty (30) days from the date hereof, Company will submit to Pey Dirt a fully paid policy or certificate of insurance naming Pey Dirt, Pey Dirt's agent and Manning as additional insured parties, requiring that the insurer shall not terminate or materially modify such without written notice to Pey Dirt at least twenty (20) days in advance thereof.

      17.   Waiver.  The failure of either party at any time or times to demand strict performance by the other of any of the terms, covenants or conditions set forth herein shall not be construed as a continuing waiver or relinquishment thereof and each may at any time demand strict and complete performance by the other of said terms, covenants and conditions.

      18.   Bankruptcy. If Company shall become bankrupt or insolvent, or if Company's business shall   be placed in the hands of a Receiver, Assignee or Trustee, whether by voluntary act of Company r otherwise, the Contract Period shall, at the option of Pey Dirt, immediately terminate.

      19.   Assignment. This Agreement shall bind and inure to the benefit of Pey Dirt and the successors and assigns of Pey Dirt.  Nothing herein shall prevent Pey Dirt from assigning the monetary benefits of this Agreement as it may so desire.  Further, inasmuch as it is recognized that Pey Dirt is the representative of Manning, Pey Dirt may at any time assign this Agreement to Manning and, in such event, Pey Dirt shall have no further obligation or liability in connection herewith and Pey Dirt's position vis-a-vis Company in connection herewith shall be in all respects the same as if Pey Dirt had signed this Agreement as agent rather than as principal from the beginning. The rights granted Company hereunder shall be used only by it and shall not, without the prior written consent of Pey Dirt, be transferred or assigned to any other.  In the event of the merger or consolidation of Company with any other entity, Pey Dirt shall have the right to terminate the Contract Period by so notifying Company in writing on or before sixty (60) days after Pey Dirt has received notice of such merger or consolidation.

      20.   Arbitration.  In the event a dispute arises under this agreement which cannot be resolved, such dispute shall be submitted to arbitration and resolved by a single arbitrator (who shall be a lawyer) in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect.  All such arbitration shall take place at the office of the American Arbitration Association located in Nashville, Tennessee.  Each party is entitled to depose one (1) fact witness and any expert witness designated by the other party, and to conduct such other discovery as the arbitrator deems appropriate.  The award or decision rendered by the arbitrator shall be final, binding and conclusive and judgment may be entered upon such award by any court.

                                       -8-

      21.   Significance of Headings.  Section headings contained herein are solely for the purpose of aiding in speedy location of subject matter and are not in any sense to be given weight in the construction of this Agreement. Accordingly, in case of any question with respect to the construction of this Agreement, it is to be construed as though such section headings had been omitted.

      22.   Entire Agreement.  This writing constitutes the entire agreement between the parties hereto and may not be changed or modified except by a writing signed by the party or parties to be charged thereby.

      23.   Governing Law.  This Agreement shall be governed and construed according to the law of Tennessee.

      24.   Reservation of Rights.  All rights not herein specifically





granted to Company shall remain the property of Pey Dirt to be used in any manner Pey Dirt deems appropriate.  Company understands that Pey Dirt has reserved to itself the right to authorize others to use Pey Dirt Identification within the Contract Territory and during the Contract Period in connection with all tangible and intangible items and services other than Products themselves.

      25.   No Joint Venture.  This Agreement does not constitute and shall not be construed as constituting a partnership or joint venture between Turn 2 and Company.  Neither party shall have any right to obligate or bind the other party in any manner whatsoever, and nothing herein contained shall give, or is intended to give, any rights of any kind to any third person.

      26.   Authorization.  The execution, delivery and performance of this Agreement by Company and by Pey Dirt has been duly authorized and approved by the Board of Directors of Company and by the Board of Directors of Pey Dirt and constitutes a valid and binding obligation of Company and of Pey Dirt enforceable in accordance with its terms.

      27.   Execution and Delivery . This instrument shall not be considered to be an agreement or contract nor shall it create any obligation whatsoever on the part of Pey Dirt and Company, or either of them, unless and until it has been personally signed by a representative of Pey Dirt and by a representative of Company and delivery has been made of a fully signed original.  Acceptance of the offer made herein is expressly limited to the terms of the offer.

      28.   Liability.  In no event (including, but not limited to, Manning's or Pey Dirt's default hereunder) shall Manning or Pey Dirt be liable to Company (or any entity claiming through Company) for any amount in excess of the amounts of royalties actually received by Pey Dirt hereunder, excluding the reimbursement of expenses.  Under no circumstances will Manning or Pey Dirt, on the one hand, or Company, on the other hand, be liable to the other or any other entity for any special, consequential, indirect, exemplary and/or punitive damages, or for loss of good will or business profits.

                                       -9-

      IN WITNESS WHEREOF, the par-ties hereto have caused this Agreement to be executed as of the date first above written.

FAMOUS FIXINS, INC.                  PEY DIRT, INC.

By:  /s/ Jason Bauer                 By:  /s/ Peyton Manning    ---------------------                ------------------------      Jason Bauer                          Peyton Manning      President                            President

                                    -10-
[EX A]: Highlight the parts (if any) of this contract related to Insurance that should be reviewed by a lawyer. Details: Is there a requirement for insurance that must be maintained by one party for the benefit of the counterparty?

[EX Q]: Exhibit 4

Rare Element Resources Ltd.  EXECUTION COPY   IP Rights Agreement

INTELLECTUAL PROPERTY RIGHTS AGREEMENT   Synchron, a California corporation having a principal place of business at 3550 General Atomics Court, San Diego, CA 92121-1122 (or one or more Affiliates, the Investor), and Rare Element Resources Ltd., a British Columbia Corporation having a principal place of business at P.O. Box 271049, Littleton, Colorado 80127 (the Company) (Investor and Company each a Party and together the Parties), agree as follows:   I. Background of Agreement   1.00 Company is the owner of certain Patents and related Technical Information relating to rare earth mineral processing and rare earth separation.   1.01 Investor wishes to acquire certain rights under the Patents and related Technical Information in accordance with the terms of this IP Agreement.   1.02 Company and Investor are concurrently entering into an Investment Agreement (Investment Agreement) whereby Investor is making a monetary investment in Company.   1.03 Company is issuing the Option pursuant to which Investor will be entitled to purchase common shares of Company.   II. Definitions   As used herein, the following terms have the meaning set forth below:   2.01 Any term set out in this IP Agreement with its initial letters capitalized, shall have the same meaning as it has in the Investment Agreement, unless a different meaning is explicitly assigned to the term in this IP Agreement.   2.02 Affiliate has the meaning set forth in the Investment Agreement.   2.03 Business Day has the meaning set forth in the Investment Agreement.   2.04 Company has the meaning set out above in the introductory paragraph.   2.05 Company Improvements has the meaning set out below in Article 5.00.

Page 1 of 15

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Rare Element Resources Ltd.  EXECUTION COPY   IP Rights Agreement   2.06 Dispute has the meaning set out below in Article 18.00.   2.07 Dispute Notice has the meaning set out below in Article 18.00.   2.08 Effective Date has the meaning of the Closing Date set forth in the Investment Agreement.   2.09 Escalation to Mediation Date has the meaning set out below in Article 18.01.   2.10 Improvement or Improvements means any modification of a process or other technology described in a Patent, and any modification to Technical Information.   2.11 Investment Agreement has the meaning set out above in Article 1.02.   2.12 Investor has the meaning set out above in the introductory paragraph.   2.13 Investor Improvements has the meaning set out below in Article 5.01.   2.14 IP Agreement means this agreement, including all Exhibits referenced herein and attached hereto.   2.15 Joint Improvements has the meaning set out below in Article 5.02.   2.16 Option has the meaning set forth in the Investment Agreement.   2.17 Option Period has the meaning set forth in the Investment Agreement.   2.18 Patent or Patents means: (a) any and all patents and patent applications owned by Company anywhere in the world as of the Effective Date relating to rare earth mineral processing and rare earth separation including without limitation those patents and patent applications listed in Exhibit A; (b) any and all divisions, continuations, continuations-in-part of any of the patents and patent applications within subdivision (a); (c) any and all patents that may directly or indirectly issue from any patent applications within subdivisions (a) and (b); (d) any and all re- issues, substitutes and extensions of any of the patents within subdivisions (a), (b) and (c); and (e) any and all counterparts or equivalents to any of the foregoing in any country of the world.   2.19 Party and Parties have the meanings set out above in the introductory paragraph.

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Rare Element Resources Ltd.  EXECUTION COPY   IP Rights Agreement   2.20 Person has the meaning set forth in the Investment Agreement.   2.21 Technical Information means research and development information that is published or unpublished, unpatented inventions, know-how, trade secrets, and technical data in the possession of Company at the Effective Date of this IP Agreement or developed by Company during the term of this IP Agreement that relate to rare earth mineral processing and rare earth separation.   2.22 Third Party means a Person other than Investor, the Company or one of their Affiliates.   III. License   3.00 Company grants to Investor, for the duration of the Option Period, a worldwide, royalty-free, non-exclusive, irrevocable license (with the right to grant sublicenses to Affiliates) under the Patents to practice the methods therein described and claimed and to make and have made, use, offer to sell, sell and import products made using such methods, and to make Improvements, and to engage in any activity which would give rise to a claim of infringement (direct or indirect or otherwise) of one or more of the Patents in the absence of a license.   3.01 Company further grants to Investor, during the duration of the Option Period, a worldwide, royalty-free, non-exclusive, irrevocable license (with the right to grant sublicenses to Affiliates) to use the Technical Information to practice the methods described and claimed in the Patents and to make and have made, use, offer to sell, sell and import products made using the methods, and to make Improvements, and to engage in any activity which would give rise to a claim of infringement (direct or indirect or otherwise) of one or more of the Patents in the absence of a license.   3.02 If the Option is not exercised prior to the expiration of the Option Period, then Company agrees to extend the license grants set forth in Articles 3.00 and 3.01 beyond the expiration of the Option Period, subject to an annual licensing fee paid by Investor to Company. The non- exclusive rights granted to Investor under this Article 3.02 do not include the right to grant sublicenses to Third Parties. The amount and parameters of the annual licensing fee shall be commercially reasonable, as determined by an independent expert who is mutually agreeable to the Parties and whose determination shall be final and binding; provided, however, that if the Parties cannot agree on the independent expert, each Party shall designate an expert of their choice and the two experts designated by the Parties shall work together in good faith to identify and designate a third, independent expert whose determination shall be binding.

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Rare Element Resources Ltd.  EXECUTION COPY   IP Rights Agreement   3.03 If the Option is exercised before the expiration of the Option Period, the license grants set forth in Articles 3.00 and 3.01 will become exclusive to Investor for a perpetual term, shall not be subject to a licensing fee, the granted licenses in favor of the Investor shall be deemed fully paid-up, and the rights granted to Investor under Articles 3.00 and 3.01 shall include the right to grant sublicenses to Third Parties.   3.04 Prior to the earlier of Investor exercising the Option and the expiration of the Option Period, Company will not grant to any Third Party any rights to the Patents or to the Technical Information that extend beyond the expiration of the Option Period.   3.05 The licenses granted in Articles 3.01 to 3.04 of this IP Agreement are subject to a reserved non-exclusive license in the Company to practice the methods described and claimed in the Patents and to make, have made, use, offer to sell, sell and import rare earth products made using such methods, and to use the Technical Information to practice the methods described and claimed in the Patents for such purposes. Such reserved non-exclusive license shall be solely for use by the Company and its Affiliates and shall not be transferable to any Third Party, except in connection with a merger, consolidation, or the sale or transfer of substantially all of the Company's assets associated with the performance of this IP Agreement.   3.06 Investor will not disclose to Third Parties any unpublished Technical Information furnished by Company to Investor during the term of this IP Agreement, or any time thereafter; provided, however, that disclosure may be made of any such Technical Information at any time (i) with the prior written consent of Company, (ii) to Affiliates of Investor, (iii) to Third Parties, in confidence, if and when the Option is exercised before the expiration of the Option Period, (iv) after such Technical Information has become public through no fault of Investor, (v) if such Technical Information is received from a third person who had a right to disclose it, (vi) if Investor can show such Technical Information was independently developed without access to any such Technical Information, or (vii) if Investor can demonstrate such Technical Information was in its rightful possession free of any obligation of confidentiality prior to its first receipt from Company.

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Rare Element Resources Ltd.  EXECUTION COPY   IP Rights Agreement   3.07 The licenses and other rights of Investor set forth in this IP Agreement are an encumbrance on (and thus run with) the Patents and Technical Information, and shall be enforceable against any entity having or obtaining ownership of, or the right to enforce, any of the Patents and Technical Information or any rights therein. Company shall obligate any Person to whom Company assigns or otherwise confers an ownership interest or right to enforce any of the Patents and Technical Information or any rights therein to: (a) fully honor in all respects all of the rights and licenses granted to Investor under this IP Agreement; and (b) obligate all subsequent assignees or other Persons who obtain an ownership interest or right to enforce any of the Patents and Technical Information or any rights therein to (i) similarly fully honor all of the foregoing in all respects, and (ii) expressly flow down all of the foregoing (including, without limitation, this flow down obligation) in all subsequent assignments or other agreements that confer an ownership interest or right to enforce any of the Patents and Technical Information or any rights therein. Any assignment or agreement or other transaction by Company that fails to be in complete compliance with this Article 3.07 or any other provision of this IP Agreement shall be null and void.   3.08 Company does not warrant the accuracy of Technical Information provided to Investor hereunder. Subject to and except for any indemnification obligations under Article 3.09 below, Company will not be under any liability arising out of the supplying of Technical Information under, in connection with, or as a result of this IP Agreement, whether on warranty, contract, negligence or otherwise.   3.09 Company represents that to the best of its knowledge, the methods described and claimed in the Patents and the Technical Information, and the products produced thereby in accordance with such information, will be free from claims of infringement of the patents and copyrights of any Third Party. Company further represents that it has not received any written notice of a claim and otherwise has no knowledge that the methods described and claimed in the Patents and the Technical Information, and the products produced thereby in accordance with such information, violate or infringe upon the rights of any Person. Company shall indemnify and hold harmless Investor, Investors' Affiliates, and their officers and directors, and their direct and indirect customers, to the fullest extent permitted by applicable law, from and against any and all losses, liabilities, obligations, claims, contingencies, damages, diminution in value, deficiencies, actions, proceedings, taxes, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys' fees and costs of investigation as incurred, arising out of or relating to any breach of any of the representations made in this Article 3.09.

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Rare Element Resources Ltd.  EXECUTION COPY   IP Rights Agreement   3.10 Company represents and warrants that the definitions of Patents and Technical Information cover and include all patents, patent applications, patent rights, research and development information, inventions, know-how, trade secrets, and technical data used by the Company in its business at the Effective Date of this IP Agreement that relate to rare earth mineral processing and rare earth separation.   IV. Prosecution of the Patents   4.00 Company will have the sole right to file, prosecute, and maintain all Patents covering the inventions that are the property of Company and will have the right to determine whether or not, and where, to file a patent application, to abandon the prosecution of any patent or patent application, or to discontinue the maintenance of any patent or patent application. Notwithstanding the foregoing, if Company elects to abandon any patent application, to not pay maintenance fees or annuities to keep a patent in force, or to otherwise take or fail to take any action that will result in a loss of patent rights, Company shall give Investor at least sixty (60) days prior written notice and an opportunity to take over the prosecution of the patent application that would be abandoned and/or pay the fees necessary to keep the patent in force and/or take any other action necessary to avoid the loss of patent rights. In the event that Investor takes over the prosecution of a patent application or maintenance of a patent under this Article 4.00, Company shall retain ownership of the patent application or patent, and the patent shall remain subject to this IP Agreement.

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Rare Element Resources Ltd.  EXECUTION COPY   IP Rights Agreement   V. Improvements   5.00 Improvements made or acquired solely by the Company (Company Improvements) during the term of this IP Agreement shall be deemed Technical Information hereunder and shall be subject to the license provisions set forth in Article III for Technical Information. Any patent applications and any patents relating to any Company Improvements shall be deemed Patents hereunder and shall be subject to the license provisions set forth in Article III for Patents.   5.01 Investor shall own all right, title and interest in any Improvement made or acquired by the Investor (Investor Improvement). Investor hereby agrees to grant to Company a non-exclusive, irrevocable, royalty-free license under any Investor Improvement and any patent claiming such Investor Improvement, solely for use in rare earth mineral processing and rare earth separation, to make and have made, use, offer to sell, sell and import products made using the Investor Improvements. Such rights to Investor Improvements shall be solely for use by the Company and its Affiliates and shall not be transferable to any Third Party, except in connection with a merger, consolidation, or the sale or transfer of substantially all of Company's assets associated with performance under this IP Agreement.   5.02 Investor shall own all right, title and interest in any Improvement made jointly by Company and Investor (Joint Improvements) during the term of this IP Agreement, and Company agrees to and hereby does assign to Investor any right, title and interest it may otherwise have in any Joint Improvement.   5.03 Investor hereby agrees to grant to Company a non-exclusive, irrevocable, royalty-free license under any Joint Improvement and any patent claiming such Joint Improvement solely for use in rare earth mineral processing and rare earth separation. Such rights to Joint Improvements shall be solely for use by the Company and shall not be transferable to any Third Party except in connection with a merger, consolidation, or the sale or transfer of substantially all of Company's assets associated with performance under this IP Agreement.

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Rare Element Resources Ltd.  EXECUTION COPY   IP Rights Agreement   5.04. For the avoidance of doubt, all right, title and interest in intellectual property, whether or not patented, that is made or acquired by one Party or its Affiliate after the Effective Date of this IP Agreement, that is wholly unrelated to the Patents and Technical Information, shall be owned by said Party or its Affiliate.   VI. Representations and Disclaimer of Warranties   6.00 SUBJECT TO AND EXCEPT FOR ANY INDEMNIFICATION OBLIGATIONS UNDER ARTICLE 3.09 ABOVE, NOTHING IN THIS IP AGREEMENT WILL BE DEEMED TO BE A REPRESENTATION OR WARRANTY BY COMPANY OF THE ACCURACY, SAFETY OR USEFULNESS FOR ANY PURPOSE OF ANY TECHNICAL INFORMATION, TECHNIQUES, OR PRACTICES AT ANY TIME MADE AVAILABLE BY COMPANY. COMPANY WILL HAVE NO LIABILITY WHATSOEVER TO INVESTOR OR ANY OTHER PERSON FOR OR ON ACCOUNT OF ANY INJURY, LOSS OR DAMAGE OF ANY KIND OR NATURE, SUSTAINED BY, OR ANY DAMAGES ASSESSED OR ASSERTED AGAINST, OR ANY OTHER LIABILITY INCURRED BY OR IMPOSED ON INVESTOR OR ANY OTHER PERSON, ARISING OUT OF OR IN CONNECTION WITH OR RESULTING FROM: (A) THE PRODUCTION, USE OR SALE OF ANY APPARATUS OR PRODUCT OR METHOD, OR THE PRACTICE OF THE PATENTS BY INVESTOR OR ITS ASSIGNS; (B) THE USE BY INVESTOR OR ITS ASSIGNS OF ANY TECHNICAL INFORMATION, TECHNIQUES, OR PRACTICES DISCLOSED BY COMPANY; OR (C) ANY ADVERTISING OR OTHER PROMOTIONAL ACTIVITIES BY INVESTOR OR ITS ASSIGNS WITH RESPECT TO ANY OF THE FOREGOING, AND INVESTOR WILL HOLD COMPANY, AND ITS OFFICERS, EMPLOYEES AND AGENTS, HARMLESS IN THE EVENT COMPANY, OR ITS OFFICERS, EMPLOYEES OR AGENTS, IS HELD LIABLE.

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Rare Element Resources Ltd.  EXECUTION COPY   IP Rights Agreement   6.01 NOTHING IN THIS IP AGREEMENT WILL BE DEEMED TO BE A REPRESENTATION OR WARRANTY BY INVESTOR OF THE ACCURACY, SAFETY OR USEFULNESS FOR ANY PURPOSE OF ANY IMPROVEMENTS AT ANY TIME MADE AVAILABLE BY INVESTOR. INVESTOR WILL HAVE NO LIABILITY WHATSOEVER TO COMPANY OR ANY OTHER PERSON FOR OR ON ACCOUNT OF ANY INJURY, LOSS OR DAMAGE OF ANY KIND OR NATURE, SUSTAINED BY, OR ANY DAMAGES ASSESSED OR ASSERTED AGAINST, OR ANY OTHER LIABILITY INCURRED BY OR IMPOSED ON COMPANY OR ANY OTHER PERSON, ARISING OUT OF OR IN CONNECTION WITH OR RESULTING FROM: (A) THE PRODUCTION, USE OR SALE OF ANY APPARATUS OR PRODUCT OR METHOD, OR THE PRACTICE OF ANY IMPROVEMENTS AT ANY TIME BY THE COMPANY, ITS AFFILIATES OR ASSIGNS; (B) THE USE OF ANY IMPROVEMENTS AT ANY TIME MADE AVAILABLE BY INVESTOR BY THE COMPANY, ITS AFFILIATES OR ASSIGNS; OR (C) ANY ADVERTISING OR OTHER PROMOTIONAL ACTIVITIES BY COMPANY ITS AFFILIATES OR ASSIGNS WITH RESPECT TO ANY OF THE FOREGOING, AND COMPANY WILL HOLD INVESTOR, AND ITS OFFICERS, EMPLOYEES AND AGENTS, HARMLESS IN THE EVENT INVESTOR, OR ITS OFFICERS, EMPLOYEES OR AGENTS, IS HELD LIABLE.   VII. Litigation   7.00 Investor will notify Company of any suspected infringement of the Patents. Subject to Article 7.01 below, the sole right to institute a suit for infringement of the Patents rests with Company. Investor agrees to reasonably cooperate with Company in such suit for infringement, including requesting Investor's employees or consultants to testify when requested by Company in writing, making available records, papers, information, specimens, and the like, provided and only to the extent such is reasonably necessary to prosecute the suit. For the avoidance of doubt, nothing in this Article 7.00 shall require Investor to join any such suit as a party, and Company shall not seek to join Investor to any such suit as a party absent the express written consent of Investor. Any recovery received pursuant to such suit will first go to Investor to reimburse Investor for any costs and expenses (including attorneys' fees) reasonably incurred by Investor in cooperating with Company in the suit, and any remaining amounts shall be retained by Company.

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Rare Element Resources Ltd.  EXECUTION COPY   IP Rights Agreement   7.01 If, after the Option is exercised before the expiration of the Option Period such that the license grants set forth in Articles 3.00 and 3.01 have become exclusive under Article 3.03, Company does not enforce the Patents, through legal action or otherwise, Investor may enforce the Patents and Company agrees to reasonably cooperate with Investor in such suit for infringement, including requesting Company's employees or consultants to testify when requested by Investor in writing, making available records, papers, information, specimens, and the like, provided and only to the extent such is reasonably necessary to prosecute the suit. For the avoidance of doubt, nothing in this Article 7.01 shall require Company to join any such suit as a party, and Investor shall not seek to join Company to any such suit as a party absent the express written consent of Company; provided, however, if Company elects not to give its express written consent to be joined as a party, but joinder is required in order for Investor to file or maintain legal action to enforce any Patents, Company agrees that if requested by Investor, Company will negotiate and enter into an amendment to this IP Agreement to the extent necessary for Investor to file or maintain legal action to enforce the Patents. Any recovery received pursuant to such suit will first go to Company to reimburse Company for any costs and expenses (including attorneys' fees) reasonably incurred by Company in cooperating with Investor in the suit, and any remaining amounts shall be retained by Investor.   VIII. Non-assignability   8.00 This IP Agreement imposes personal obligations on Investor. Investor will not assign to any Third Party any rights under this IP Agreement not specifically transferable by its terms without the prior written consent of Company, such consent not to be unreasonably withheld. For the avoidance of doubt and notwithstanding the foregoing: (1) such rights are assignable by Investor to an Affiliate of Investor, and (2) Investor's rights in Investor Improvements and Joint Improvements shall be freely assignable by Investor to any Person.

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Rare Element Resources Ltd.  EXECUTION COPY   IP Rights Agreement   IX.Severability   9.00 The Parties agree that if any part, term or provision of this IP Agreement is found illegal or in conflict with any valid controlling law, the validity of the remaining provisions will not be affected thereby.   9.01 Should any provision of this IP Agreement be held by a court of law to be illegal, invalid or unenforceable, such provision shall be replaced by such provision as most closely reflects the intent of the invalid provision, and the legality, validity and enforceability of the remaining provisions of this Agreement will not be affected or impaired thereby.   X. Waiver, Integration, Alteration   10.00 The waiver of a breach hereunder may be effected only by a writing signed by the waiving Party and will not constitute a waiver of any other breach.   10.01 This IP Agreement, together with the Investment Agreement and any other documents or agreements executed in connection with the transactions contemplated thereunder, represents the entire understanding between the Parties, and supersedes all other agreements, express or implied, between the Parties concerning the Patents and Technical Information.   XI. Execution   11.00 This IP Agreement may be executed in counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each Party and delivered to each other Party, it being understood that the Parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a .pdf format data file, such signature shall create a valid and binding obligation of the Party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or .pdf signature page were an original thereof.

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Rare Element Resources Ltd.  EXECUTION COPY   IP Rights Agreement   XII. Cooperation   12.00 Each Party will execute any instruments reasonably believed by the other Party to be necessary to implement the provisions of this IP Agreement.   XIII. Construction   13.00 This IP Agreement will be construed in accordance with the substantive laws of the state of New York and of the United States of America.   XIV. Exportation of Technical Information   14.00 Investor agrees that it will not export the Technical Information furnished to Investor either directly or indirectly by Company, to any destination or Person prohibited by the U.S. Export Administration Regulations or other U.S. export control laws and regulations.   14.01 Company agrees that it will not export any information relating to Improvements or otherwise furnished to Investor either directly or indirectly by Investor Company, to any destination or Person prohibited by the U.S. Export Administration Regulations or other U.S. export control laws and regulations.   XV. Notices Under this IP Agreement   15.00 All written communications and notices between the Parties relating to this IP Agreement shall be made in the manner set forth in the Investment Agreement.   XVI. Term and Termination   16.00 Unless earlier terminated in accordance with the terms of this Article XVI, this IP Agreement and the licenses granted herein will continue in effect from the Effective Date until the expiration of the last to expire of the Patents and any additional period of time thereafter that any of the Patents remain enforceable such as in the United States where a party can sue for infringement after a patent expires and seek damages for any infringement of the patent during the six years immediately preceding the filing of a suit for infringement.

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Rare Element Resources Ltd.  EXECUTION COPY   IP Rights Agreement   16.01 Investor at any time may provide written notice to Company of a material breach of this IP Agreement. If Company fails to cure the identified breach within thirty (30) days after the date of the notice, Investor may terminate this IP Agreement by written notice to Company.   16.02 If the Option is not exercised before the expiration of the Option Period, Company may provide written notice to Investor of a material breach of this IP Agreement. If Investor fails to cure the identified breach within thirty (30) days after the date of the notice, Company may terminate this IP Agreement by written notice to Investor. If the Option is exercised before the expiration of the Option Period, Company may not terminate this IP Agreement for material breach.   16.03 The following provisions of this IP Agreement shall survive termination of this IP Agreement: Article I, Article II, Articles 3.08 and 3.09, Article V (as to Improvements made or acquired during the term of the IP Agreement), Article VI, and Articles VIII-XVIII. In addition, for as long as there continues to exist Technical Information of use by Investor in its business, any rights or licenses Investor has in Technical Information under this Agreement shall survive termination of this IP Agreement under Article 16.00 but not termination under Articles 16.01 or 16.02 for material breach.   XVII. Bankruptcy   17.00 Each Party acknowledges that all rights, covenants and licenses granted by one Party to the other Party are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of rights to intellectual property as defined under Section 101(35A) of the Bankruptcy Code. Each Party acknowledges this IP Agreement is an Executory Contract and that should any Party become a petitioner under the Bankruptcy Code, §365(n) applies to this IP Agreement and the rights afforded thereunder apply. Each Party further acknowledges that if such Party, as a debtor in possession or a trustee-in-bankruptcy in a case under the Bankruptcy Code, rejects this IP Agreement, the other Party may elect to retain their rights under this IP Agreement as provided in Section 365(n) of the Bankruptcy Code. Any change of control resulting from any such bankruptcy proceeding shall be subject to the rights and licenses granted in this IP Agreement. Each Party agrees that to the extent the Bankruptcy laws of Canada provide the same or similar rights to a licensee as Section 365(n) of the U.S. Bankruptcy Code, a Party may exercise such same or similar rights as specified herein as to the rights under the U.S. Bankruptcy Code.

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Rare Element Resources Ltd.  EXECUTION COPY   IP Rights Agreement   XVIII. Governing Law; Jurisdiction; Dispute Resolution   18.00 Exclusive Dispute Resolution Mechanism. The procedures set forth in this Article XVIII shall be the exclusive mechanism for resolving any dispute that may arise from time to time relating to this IP Agreement (Dispute). Either Party may commence the procedures contemplated by this Article XVIII by written notice to the other that a Dispute has arisen (a Dispute Notice).   18.01 Negotiations. The Parties shall first attempt in good faith to resolve any Dispute by negotiation and consultation between themselves, including without limitation not fewer than two (2) negotiation sessions which shall occur within ten (10) Business Days of the Dispute Notice. In the event that such dispute is not resolved on an informal basis by the conclusion of the second negotiation session, or, if either Party has not participated in negotiation sessions as to which notice has been given (the last day of such time period, the Escalation to Mediation Date), either Party may initiate mediation under Article 18.02.   18.02 Mediation.   (a) Either Party may, at any time after the Escalation to Mediation Date, submit the Dispute for mediation. The Parties shall cooperate with one another in selecting a neutral mediator and in scheduling the mediation proceedings. Each Party covenants that they will use commercially reasonable efforts in participating in the mediation. Each Party shall prepare for the mediator a written request for mediation, setting forth the subject of the Dispute, the position and supporting documentation of such Party, and the relief requested. Each Party agrees that the mediator's fees and expenses and the costs incidental to the mediation will be shared equally between the Parties.

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Rare Element Resources Ltd.  EXECUTION COPY   IP Rights Agreement   (b) The Parties further agree that all offers, promises, conduct, and statements, whether oral or written, made in the course of the mediation by the Parties, their agents, employees, experts, and attorneys, and by the mediator, are confidential, privileged, and inadmissible for any purpose, including impeachment, in any litigation, arbitration or other proceeding involving the Parties, provided that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the mediation.   18.03 Litigation or Arbitration as a Final Resort. If the Parties cannot resolve any Dispute for any reason, including, but not limited to, the failure of the Parties to agree to enter into mediation or agree to any settlement proposed by the mediator, within sixty (60) days after the Escalation to Mediation Date, either the Company or the Holder may file suit in a court of competent jurisdiction in accordance with Article 18.04.   18.04 Governing Law; Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this IP Agreement shall be determined in accordance with the provisions of the Investment Agreement.   IN WITNESS WHEREOF, the Parties have caused this IP Agreement to be executed by their duly authorized officers on the respective dates herein set forth.  Rare Element Resources Ltd.  By: /s/ Randall J. Scott  Name: Randall J. Scott  Title: President and Chief Executive Officer  Date: October 2, 2017     Synchron  By: /s/ Kenneth J. Mushinski  Name: Kenneth J. Mushinski  Title: President  Date: October 2, 2017

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EXHIBIT A

Title Country orAuthority Application No. Filing Date Publication No. Patent No. Status

Extraction of Metals from Metallic Compounds PCT PCT/US2014/012153 01/18/2014 WO 2014/113742 N/A Expired

Selective Extraction of Cerium from Other Metals US 14/735,118 6/9/2015 2016/0002751 -- Published

Selective Extraction of Cerium from Other Metals PCT PCT/US2015/03498 6/9/2015 WO2015/191645 -- Expired

Extraction of Metals from Metallic Compounds AU AU 2014207355 6/9/2015    Pending

Extraction of Metals from Metallic Compounds CA CA 2,898,612 6/9/2015    Pending

Extraction of Metals from Metallic Compounds EP EP 14740863.7 6/9/2015    Pending

Extraction of Metals from Metallic Compounds RU RU 2015134576 6/9/2015    Pending

Extraction of Metals from Metallic Compounds ZA ZA 2015/05821 6/9/2015    Pending

Extraction of Metals from Metallic Compounds US 14/831,020 8/20/2015 2015/0354026  Published

Processing of Rare Earth Elements PCT PCT/US2015/055403 10/13/2015 WO 2016/058007 N/A Expired

Processing for the Extraction of Rare Earth Elements US 15/517,884 10/13/2015 -- -- Pending

Processing for the Extraction of Rare Earth Elements CA CA 2,964,306 10/13/2015 -- -- Pending

Processing for the Extraction of Rare Earth Elements AU AU 2015329723 10/13/2015 -- -- Pending

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Source: RARE ELEMENT RESOURCES LTD, SC 13D, 10/19/2017
[EX A]:
Highlight the parts (if any) of this contract related to Irrevocable Or Perpetual License that should be reviewed by a lawyer. Details: Does the contract contain a  license grant that is irrevocable or perpetual?