Pursuant to the Plan Support Agreement, the Sponsors and the Thermo Lenders agreed to vote in favor of and support a plan of reorganization proposed by the Company under the Bankruptcy Code (the "Plan") that contains terms set forth in the Plan Support Agreement.

The Sponsors also agreed to make a debtor-in-possession loan facility (the "DIP Facility") available to us, in the aggregate amount of approximately $8.75 million, to fund, among other things, our working capital needs during the bankruptcy cases. The DIP Facility contemplates that, the Company will be able to draw down up to $750,000 on an interim basis, with the remainder available only after final approval of the Bankruptcy Court (as defined below) is obtained, and certain other conditions are satisfied as set forth in the Plan Support Agreement.    The Plan Support Agreement and the DIP Facility may be terminated by the Sponsors under certain circumstances, including the Bankruptcy Court's failure (i) by May 4, 2011 to enter an Interim Order approving the DIP Facility, (ii) by May 20, 2011 to enter the Final Order approving the DIP Facility, (iii) by August 11, 2011 to enter an order confirming the Plan. The Bankruptcy Court, on May 3, 2011, entered its Interim Order approving the DIP Facility, and set May 19, 2011 at the date for the hearing on the Final Order.

On April 29, 2011, the Company filed voluntary petitions (In re: Raser Technologies, Inc., et. al, Debtors, Case No. 11-11315 (KJC) for reorganization (the "Chapter 11 Case") under Chapter 11 of Title 11 of the United States Code, 11 U.S.C. Sec. 101 et seq., as amended (the "Bankruptcy Code"), in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court").

The existing officers and directors of the Company will continue to manage the Company's business as debtors-in-possession, pursuant to sections 1107 and 1108 of the Bankruptcy Code, and subject to the requirements of the Bankruptcy Code, which include court approval of matters outside the ordinary course of business.

The Plan

Auction of New Equity

The equity of the reorganized Company will be sold, by way of an auction conducted pursuant to procedures approved by the Bankruptcy Court, to the Sponsors or to the party submitting a higher and better offer (as determined by the Company) in the auction. The "stalking horse" bid of the Sponsors, as more fully described in the attached exhibit, will constitute the opening bid to acquire equity of reorganized Company in the auction. The auction procedures will include certain bid protections specified in the Plan Support Agreement, including approval of a break-up fee for the Sponsors if another entity is selected as the successful bidder, and otherwise must be reasonably acceptable to the Company and the Sponsors.

Exit Financing

In addition, the Sponsors have committed to provide the company with secured exit financing in the form of a two year senior secured convertible (preferred voting) term loan facility in the amount of $3 million. The exit financing will contain customary terms and conditions to fund working capital and further development needs of the reorganized Company pursuant to a budget approved by the board of Directors of the Company.

As collateral security for the Exit Facility, the Sponsors shall be granted a first priority security interest in, and lien on, all of our assets (including without limitation all of our avoidance claims, pre-petition claims and proceeds thereof.

        Additionally, the filing of the Chapter 11 petitions constituted a default under the Senior Notes that, if unstayed for 60 days, would constitute and event of default resulting in all outstanding principal and accrued interest being immediately due and payable.