UNSECURED LINE OF CREDIT AGREEMENT AND PROMISSORY NOTE

UNSECURED LINE OF CREDIT AGREEMENT AND PROMISSORY NOTE

     This Unsecured Line of Credit Agreement and Promissory Note (this " Agreement ") is made and entered into effective as of the 27 day of January, 2009, by and among Radion Energy, LLC (" Radion "), Ocean Fund, LLC (" Ocean Fund "), Primary Colors, LLC (" Primary Colors ") and R. Thomas Bailey, an individual

(" Bailey, " and together with Radion, Ocean Fund and Primary Colors, " Lenders ") and Raser Technologies, Inc., a Delaware corporation (" Borrower ").

      SECTION 1. Line of Credit; Term . On the terms and conditions set forth in this Agreement, Lenders agree to establish a line of credit (the " Line of Credit ") for Borrower during the period set forth below in an aggregate principal amount not to exceed Fifteen Million Dollars ($15,000,000) (the " Credit Limit "). No Lender shall be required to loan any amount to Borrower under the Line of Credit in excess of the aggregate commitment amount set forth opposite such Lender's name on Exhibit A hereto. The Line of Credit shall be a non-revolving Line of Credit. Once loan funds have been advanced and repaid, they will not be re-advanced, and once the total amount of principal has been advanced, Borrower is not entitled to further loan advances. The term of the Line of Credit shall be from the date hereof up to and including the Maturity Date (as defined in Section 4 below), or such later date as Lenders may, in their sole discretion, authorize in writing, unless earlier terminated by Borrower by notice to Lenders. The parties may, by mutual written agreement, extend the term of the Line of Credit, in which case the Maturity Date shall be automatically extended accordingly. The unpaid principal balance owing under this Agreement at any time shall be tracked on Schedule 1 hereto and shall be updated promptly following each advance under this Agreement.

      SECTION 2. Promise to Pay; Interest . For value received, the undersigned Borrower promises to pay to the order of each Lender, at the address set forth opposite such Lender's name on Exhibit A hereto or at such other place as such Lender may designate in writing from time to time, in lawful money of the United States of America and in immediately available funds, any principal amounts advanced by such Lender under the Line of Credit up to the amount of such Lender's commitment amount set forth opposite such Lender's name on Exhibit A , and such additional amounts that such Lender agrees to advance hereunder, with interest thereon in like lawful money, payable in the manner and on the terms set forth in this Agreement. Any unpaid principal balance due under this Agreement from time to time shall bear interest from the date of each advance until paid at the rate of ten percent (10%) per annum. Interest shall be calculated on the basis of a 365-day year using the actual number of days elapsed divided by 365.

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      SECTION 3 . Advances . Borrower, or such other person authorized by Borrower, may request an advance from Lenders under the Line of Credit orally or in writing from time to time as provided in this paragraph and in such amounts as Borrower may choose; provided that the requested advance shall not, when added to the sum of all previous advances, exceed the Credit Limit. Borrower may direct a request for an advance to any one Lender, and such Lender shall promptly communicate such request to the other Lenders. Lenders shall promptly determine amongst themselves the amount of each advance to be funded by each Lender, it being understood that no Lender shall be obligated to participate in advances in an aggregate amount exceeding such Lender's commitment amount set forth opposite such Lender's name on Exhibit A , unless otherwise approved by such Lender. Notwithstanding anything herein to the contrary, each Lender shall have sole discretion to determine whether to fund any portion of an advance. To the extent Lenders approve Borrower's request for an advance, they may deposit or credit the amount of such advance to Borrower's banking account, or apply the funds directly to the intended uses, as directed by Borrower, in any case using immediately available funds. Notwithstanding anything herein to the contrary, Lenders may, in their sole discretion, make an advance in excess of the Credit Limit, and any Lender may, in its sole discretion, make an advance in excess of the commitment amount set forth opposite such Lender's name on Exhibit A , which advance shall be subject to all of the terms and conditions contained herein. If Lenders make advances in excess of the Credit Limit, such action shall not establish a course of conduct, past business practice, or otherwise obligate Lenders to make similar advances in the future.

      SECTION 4. Maturity and Repayment . The entire principal balance and all accrued but unpaid interest under this Agreement shall be due and payable in full on the Maturity Date. For purposes of this Agreement, the " Maturity Date " means the earlier of (i) November 15, 2009 and (ii) the closing date for a strategic transaction involving Borrower or any of its subsidiaries arranged or organized by Calyon Securities (USA) Inc. Any outstanding amount not paid within ten (10) days after the Maturity Date shall be subject to a late charge equal to four percent (4%) of the amount which is delinquent. All payments received hereunder shall be (x) applied, first, to late charges and expenses reimbursable to Lenders; second, to accrued interest; and the balance, if any, to the reduction of principal and (y) split among the Lenders on a pro rata basis based on the aggregate amounts that have been advanced by each Lender at the time of the applicable payment.

      SECTION 5. Prepayment . Borrower may prepay the principal balance in whole or in part at any time without premium or penalty.

      SECTION 6. Issuance of Warrants . As additional consideration for Lenders' willingness to fund advances under the Line of Credit, within ninety (90) days after each advance by a Lender under this Agreement, Borrower will issue to such Lender a warrant in the form attached hereto as Exhibit B (each, a " Warrant ") to purchase, subject to the terms and conditions of such Warrant, a number of shares of common stock of Borrower (rounded down to the nearest whole share) equal to: (i) fifty percent (50%)

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of the aggregate dollar amount of funds advanced by such Lender in connection with such advance divided by (ii) the closing price for Borrower's common stock on the New York Stock Exchange or other securities exchange or market on which Borrower's common stock is then listed or traded, or if Borrower's common stock is not then listed on any securities exchange or traded on any market, the fair market value of Borrower's common stock as of the close of business on the date of such advance, as determined in good faith by Borrower's board of directors. To illustrate the application of the foregoing sentence, if a Lender funds $1,000,000 of an advance under the Line of Credit and the closing price of Borrower's common stock on the New York Stock Exchange on the date of such advance is $3.50 per share, then within ninety (90) days after such advance, such Lender shall be entitled to a Warrant to purchase 142,857 shares of Borrower's common stock. Notwithstanding the foregoing, if a Lender makes more than one advance during a given 90-day period, Borrower may issue one Warrant with respect to all advances made by such Lender during such period. Shares of common stock of Borrower issuable upon exercise of any Warrant are referred to herein as " Warrant Shares ." The Warrants, Warrant Shares and any other securities issued pursuant to or evidenced by this Agreement are collectively referred to in this Agreement as the " Securities ."

      SECTION 7. Conditions Precedent . No Lender shall be required to make any advance hereunder so long as any Event of Default (as defined in Section 10 hereof) has occurred and is continuing.

      SECTION 8. Representations and Warranties of Borrower . To induce Lenders to make advances hereunder, Borrower represents and warrants as follows as of the date hereof and as of the date of any advance under this Agreement:

     a. Borrower is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, with the power to own its assets and to transact business in Utah and such other states, if any, where its business is conducted.

     b. Borrower has full corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of Borrower, enforceable in accordance with its terms and conditions, subject to bankruptcy, insolvency, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights generally and to general principles of equity. Borrower need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement. The execution, delivery, and performance of this Agreement have been duly authorized by Borrower.

     c. Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (A) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Borrower is

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subject or any provision of its charter or bylaws or (B) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which Borrower is a party or by which it is bound or to which any of its assets are subject.

     d. There is no pending or, to the knowledge of Borrower, threatened action, suit, proceeding or investigation before any court, governmental agency or body, or arbitrator having jurisdiction over Borrower that would affect the execution by Borrower of, or the performance by Borrower of its obligations under, this Agreement.

     e. During the period that any Warrant is outstanding, Borrower will reserve from its authorized and unissued common stock a sufficient number of shares to provide for the issuance of the Warrant Shares subject to such Warrant.

     f. The issuance of each Warrant shall constitute full authority to Borrower's officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares subject to such Warrant.

     g. The Warrant Shares subject to each Warrant, when issued in compliance with the provisions of such Warrant and Borrower's certificate of incorporation, will be validly issued, fully paid and nonassessable, and free of all taxes, liens or encumbrances with respect to the issue thereof.

      SECTION 9. Representations, Warranties and Acknowledgements of Lenders . To induce Borrower to issue the Securities, each Lender represents, warrants and acknowledges as follows as of the date hereof and as of the date of issuance of any Warrant to such Lender:

     a. Such Lender represents and affirms that none of the following information has ever been represented, guaranteed or warranted to such Lender, expressly or by implication, by any person: (i) the approximate or exact length of time that such Lender will be required to remain a security holder of Borrower; or (ii) the percentage of profit and/or amount of or type of consideration, profit or loss to be realized, if any, as a result of an investment in Borrower.

     b. Such Lender is the sole and true party in interest, is acquiring the Securities for his, her or its own account for investment, is not acquiring the Securities for the benefit of any other person, and has no present intention of holding or managing the Securities with others or of selling, distributing or otherwise disposing of any portion of the Securities. Such Lender's investment intent is not limited to a present intention to hold the Securities for the minimum capital gains period specified under any applicable tax law, for a deferred sale, for a specified increase or decrease in the market price of the Securities or for any other fixed period in the future. Such Lender has his, her or its principal residence in the state set forth opposite such Lender's name on Exhibit A hereof.

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     c. Such Lender has been given access to full and complete information regarding Borrower. Without limiting the generality of the foregoing, such Lender understands that Borrower is subject to the information and reporting require