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Exhibit 10.39

CONFIDENTIAL

PROGRAM MANAGEMENT AGREEMENT

EVERGREEN ENERGY INC.
AND
BECHTEL POWER CORPORATION

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TABLE OF CONTENTS

ARTICLE I—DEDICATED PROGRAM MANAGEMENT TEAM   4
1.1.
 
Executive Sponsors. 
 
4
1.2.
 
Program Management Team. 
 
4
1.3.
 
Representatives. 
 
4
1.4.
 
Dedicated Personnel. 
 
5
ARTICLE II—PROGRAM MANAGEMENT TEAM RESPONSIBLITIES
 
5
2.1.
 
Responsibilities. 
 
5
2.2.
 
Rights to Use Work Product and Intellectual Property Rights. 
 
5
2.3.
 
Standard Plant Program. 
 
6
2.4.
 
TSA Phase. 
 
6
2.5.
 
Scope Book Phase. 
 
7
2.6.
 
EPC Contract Phase. 
 
8
2.7.
 
Delays. 
 
8
ARTICLE III—BECHTEL BUSINESS DEVELOPMENT
 
9
ARTICLE IV—TERM AND TERMINATION
 
9
4.1.
 
Term. 
 
9
4.2.
 
Evergreen Termination. 
 
9
4.3.
 
Bechtel Termination. 
 
9
ARTICLE V—EXCLUSIVITY AND TERMINATION FEE
 
10
5.1.
 
Exclusivity. 
 
10
5.2.
 
Termination Fee. 
 
10
ARTICLE VI—ASSIGNMENT
 
11
ARTICLE VII—NOTICES
 
11
ARTICLE VIII—MISCELLANEOUS
 
11
8.1.
 
Entire Agreement. 
 
11
8.2.
 
Equitable Adjustments. 
 
11
8.3.
 
Amendments. 
 
11
8.4.
 
Binding Nature. 
 
12
8.5.
 
Headings. 
 
12
8.6.
 
Governing Law. 
 
12
8.7.
 
Management Negotiations. 
 
12
8.8.
 
Mediation/Arbitration of Disputes. 
 
12
8.9.
 
Third Party Beneficiaries. 
 
12

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8.10.
 
Confidentiality. 
 
13
8.11.
 
No Waiver. 
 
13
8.12.
 
Further Assurances. 
 
13
8.13.
 
Independent Contractor. 
 
13
8.14.
 
Counterparts. 
 
13
8.15.
 
Consequential Damages. 
 
13

 

EXHIBIT A   FORM OF CONFIDENTIALITY AND RELEASE    
EXHIBIT B
 
FORM OF EPC AGREEMENT
 
 

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PROGRAM MANAGEMENT AGREEMENT

        THIS PROGRAM MANAGEMENT AGREEMENT (AMENDS AND RESTATES THE PREVIOUS
"UMBRELLA AGREEMENT" DATED FEBRUARY 15, 2007 WHICH IS HEREBY TERMINATED AND HAS
NO FURTHER EFFECT) (this "Agreement") is made and entered into as of
September 19, 2007 (the "Effective Date") by and among Evergreen Energy Inc., a
Delaware corporation, having an office and place of business at 1225 17th Street
Suite 1300, Denver, Colorado, 80202 ("Evergreen"), and Bechtel Power
Corporation, a Nevada corporation having an office and place of business at
5275 Westview Drive, Frederick, MD 21703-8306 (hereinafter "Bechtel"). Evergreen
and Bechtel may be referred to herein individually as a "party" and collectively
as the "parties".

WITNESSETH:

        WHEREAS, Evergreen owns and operates the Ft. Union K-Fuel® plant and an
adjacent coal mine in Wyoming (the "Existing Plant") which is the first
commercial plant producing refined coal using Evergreen's K- Fuel® patented
process to transform high moisture, low-Btu coals into more efficient,
lower-emission fuel (the "K- Fuel® process");

        WHEREAS, Evergreen anticipates building standardized mine mouth and
K-Direct (i.e., located at a power plant) refining facilities using its K- Fuel®
process (each such facility, a "Plant" and collectively, the "Plants") for which
Evergreen will engage Bechtel to perform the engineering, procurement and
construction services for the initial projects having aggregate capital costs of
at least one billion dollars ($1 billion) (such Plants or their replacements,
collectively, the "Identified Plants");

        WHEREAS, Evergreen desires to utilize Bechtel's services on an
integrated basis to oversee both technical development and implementation of all
new facilities (the Evergreen's Capital Programs);

        WHEREAS, Evergreen is seeking a contractor with experience in the
engineering, procurement and construction of integrated coal-fired power plants
and coal processing facilities in order to perform engineering, procurement and
construction services (collectively, the "EPC Services") in connection with the
Identified Plants;

        WHEREAS, Bechtel is experienced in providing such EPC Services and
desires to provide such EPC Services to Evergreen;

        WHEREAS, Evergreen desires Bechtel to support the development of, and
business development efforts for, Evergreen projects;

        WHEREAS, Evergreen desires that Bechtel support the technical
development of the standard plant offering for K-Fuel® (and K-Direct)
facilities;

        WHEREAS, Bechtel has entered into that certain Services Agreement, dated
as of September 21, 2006 (the "TSA"), with Evergreen to provide (1) technical
services, construction management and project management services thereunder in
connection with the Existing Plant and (2) business development support, scope
book design and technical services towards a standard plant design of the
Identified Plants (the "TSA Services");

        WHEREAS, Bechtel has entered into that certain Loaned Employee
Agreement, dated as of January 11, 2007 (the "Loaned Employee Agreement"), with
Evergreen to provide personnel to work under Evergreen's direction at the
Existing Plant;

        WHEREAS, Evergreen will engage Bechtel to perform Program Management
Services in order to manage and oversee the standardized plant initiatives;

        WHEREAS, the parties desire to reflect the basis of their mutual
understanding and intention to proceed together on a mutually exclusive basis
with the development of the scope of the EPC Services to be performed in
connection with each of the Identified Plants and the execution of engineering,

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procurement and construction agreements (each, an "EPC Contract") for each of
the Identified Plants; and

        WHEREAS, the parties desire to agree to certain matters common to the
TSA, the Loaned Employee Agreement and the EPC Contracts.

        NOW, THEREFORE, for and in consideration of these premises and the
agreements herein contained, the parties, intending to be legally bound,
mutually covenant and agree as follows:

ARTICLE I—DEDICATED PROGRAM MANAGEMENT TEAM

1.1.  Executive Sponsors.

        Each of the parties hereby appoints the following individual,
respectively, as its Executive Sponsor (each, an "Executive Sponsor") to
establish the strategy and objectives for the work at the Existing Plant and the
development and execution of the Identified Plants:

Evergreen:   Kevin Collins; and Bechtel:   Jeffry Brightman.

        Each party may replace its Executive Sponsor by notice to the other
party designating the new Executive Sponsor.

1.2.  Program Management Team.

        The parties shall establish a Program Management Team comprised of one
representative of each party appointed in accordance with Section 1.3 below to
provide strategic direction and to set priorities consistent with the direction
provided by the Executive Sponsors. Decisions of the Program Management Team
will be by consensus. Failure to reach a consensus by the Program Management
Team within ten (10) days will require the decision to be escalated to the
Executive Sponsors for consideration and resolution.

        The Program Management Team will oversee the development of the standard
plant, technology modifications and testing, and execution of studies for
K-Fuel® and K-Direct plants. Planning and structuring to facilitate multiple
plant equipment purchases and other synergies amongst the K-Fuel®/K-Direct
plants to be built will be implemented by the Program Management Team.

1.3.  Representatives.

        Each of the parties hereby appoints the following individual,
respectively, as its initial representative to the Program Management Team
(each, a "Representative"):

Evergreen:   Steve Wolff; and Bechtel:   William R. Elliott.

        Each party may replace its Representative by notice to the other party
designating the new Representative, provided that Bechtel will obtain the
approval of Evergreen's Executive Sponsor (which approval shall not be
unreasonably withheld or delayed) to any replacement of its Representative.

1.3.1.The Representatives shall have the power to delegate authority to such
employees, agents, subcontractors and representatives as they may from time to
time deem appropriate.

1.3.2.The Representatives shall hold regular meetings (including by means of
telephone conference) at such times, dates and places as the Representatives may
determine. Special meetings of the Representatives may be called by any
Representative upon reasonable advance notice.

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1.4.  Dedicated Personnel.

        Bechtel and its affiliates shall make available and maintain staff that
are dedicated to fulfillment of its obligations under this Agreement, the TSA,
the Loaned Employee Agreement, any EPC Contract that is executed and any other
agreement between the parties or their respective affiliates with respect to the
Existing Plant or the Identified Plants (collectively, the "Program Documents").
Such personnel shall have the technical and managerial expertise to manage and
execute the TSA Services and the EPC Services in accordance with the
requirements of the Program Documents, including key staff members for the
management of the EPC Services both on and off-site who shall be supported by
area and discipline superintendents and personnel as required.

ARTICLE II—PROGRAM MANAGEMENT TEAM RESPONSIBILITIES

2.1.  Responsibilities.

        The parties, through their respective Representatives, shall work
jointly to fully define their respective rights and obligations, including the
TSA Services and the EPC Services to be provided by Bechtel with respect to the
work at the Existing Plant and the development and execution of the Identified
Plants.

2.2.  Rights to Use Work Product and Intellectual Property Rights.

2.2.1.As used herein, "Work Product" shall refer collectively to all drawings,
specifications, reports, studies, analyses, recommendations, estimates, data and
other documents prepared in the performance of the services and/or delivered to
Evergreen under this Agreement, whether in written or electronic form.
Intellectual property required for the K-Fuel® process shall be, and remain the
property of Evergreen ("Evergreen Intellectual Property"). Notwithstanding
anything to the contrary in this Agreement, the intellectual property related to
the engineering, procurement and construction process, as well as the
intellectual property developed and/or delivered in the performance of the
services shall be, and remain the property of Bechtel ("Bechtel Intellectual
Property") regardless of whether it is reflected in the Work Product. Unless
payment has not been properly made to Bechtel, the Work Product is the property
of Evergreen, subject to the following restriction; Evergreen covenants not to
reproduce, distribute, display, perform, create derivative works from or
otherwise use (except as otherwise provided in 2.2.2) any Bechtel Intellectual
Property without the prior written approval of Bechtel.

2.2.2.Notwithstanding the foregoing Section 2.2.1, in the event Evergreen, or a
third party licensee, awards an agreement to perform EPC Service to another
contractor as permitted by the terms of this Agreement, and desires to furnish
the Process Flow Diagrams ("PFDs") or Piping & Instrumentation Diagrams
("P&IDs"), Evergreen shall be entitled to furnish the PFDs and P&IDs to the
contractor providing such services to Evergreen ("Other Contractor") provided
that, prior to such disclosure to the Other Contractor Evergreen provides
Bechtel with a confidentiality and release agreement in the form of Exhibit A
attached hereto executed by each recipient of any PFD or P&ID agreeing that such
recipient is not relying and will not rely upon such PFD or P&ID and waiving and
releasing any claims it may have against Bechtel or any of its affiliates on
account of such reliance or purported reliance. In no event will Bechtel have
any liability to such recipient or any other third party for the use of any PFD
or P&ID furnished by Evergreen and Evergreen shall defend, indemnify and hold
Bechtel harmless against any liability (including reasonable attorneys' fees and
court costs) for any consequences or such use by such recipients. Evergreen
shall be responsible for the breach by any such recipient of its confidentiality
obligations.

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2.2.3.Indemnification.    Bechtel Intellectual Property, may not be used by
Evergreen for any purpose other than in connection with the construction,
operation, maintenance, and repair of the Identified Plants. To the fullest
extent permitted by applicable law, Evergreen, if it so uses, or allows others
to use, such Bechtel Intellectual Property and/or Work Product prepared and/or
delivered in the performance of the services for any purpose other than as
stated in this Agreement, shall defend, indemnify and hold Bechtel harmless from
third party claims arising therefrom. To the extent any Bechtel Intellectual
Property and/or Work Product is modified by Evergreen or at Evergreen's request,
then Evergreen shall defend, indemnify and hold Bechtel harmless from third
party claims arising therefrom.

2.2.4.Bechtel Work Product may not be disclosed by Evergreen to a third party
except as specifically permitted in this agreement. It is agreed by the parties
that any detailed design based on site specific information shall be maintained
in confidence by Evergreen and not disclosed to any third party. Prior to
Evergreen making any permitted disclosure of Bechtel Work Product to third
parties Evergreen shall provide Bechtel a confidentiality and release agreement
in the form of Exhibit A attached hereto, executed by each recipient of any
Bechtel Work Product agreeing that such recipient is not relying and will not
rely upon such Work Product and waiving and releasing any claims it may have
against Bechtel or any of its affiliates on account of any such reliance or
purported reliance. In no event will Bechtel have any liability to such
recipient or any other third party for the use of any Work Product furnished by
Bechtel or any portion thereof or information contained therein and Evergreen
shall defend, indemnify and hold Bechtel harmless against any liability
(including reasonable attorneys' fees and court costs) for any consequence of
such use by such recipients. Evergreen shall be responsible for the breach by
any such recipient of its confidentiality obligations.

2.3.  Standard Plant Program.

        It is recognized that the overall objectives with respect to the
Identified Plants (the "Standard Plant Objectives") are as set out below:
(a) Bechtel to develop PFD's for a standardized plant ("Standard Plant Basic
Design") (b) Bechtel to develop additional detailed design materials for a
standardized plant ("Standard Plant Detailed Design") (c) optimization of plant
operation and performance; (d) standardization of equipment supply across all
Identified Plants; (e) standardization of operation and maintenance practices
across all Identified Plants; (f) Bechtel will use the lessons learned from
previously executed Identified Plants for which it was engaged as well as its
current technology resources in enhancing the execution of an EPC Contract; and
(g) maximum enhancement of the schedule for engineering, procurement,
construction and completion of each Identified Plant for which Bechtel is
engaged to perform EPC Services. This Standard Plant Detailed Design will be the
design materials of a level of specificity included in a standard preliminary
scope book. In the course of performance of the TSA Services and the EPC
Services, Bechtel shall use commercially reasonable efforts to assist Evergreen
in the realization of the Standard Plant Objectives and shall plan and execute
its TSA Services and EPC Services so as to ensure the realization of the
Standard Plant Objectives to the maximum practical extent.

2.4.  TSA Phase.

        The parties through their Representatives shall perform the following
activities under the TSA with respect to the Existing Plant and the development
of the Identified Plants (the "TSA Phase"):

2.4.1.Bechtel will work with Evergreen to optimize the operations of the
Existing Plant. The modifications, testing and demonstration of the Existing
Plant will provide the basis for the design for the Identified Plants; and

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2.4.2.Bechtel will provide technical support (related to the EPC Services and
the future EPC Contracts) to Evergreen in its preparation of studies for K-Fuel®
users during Evergreen sales efforts.

2.4.3.On a Task Order basis, Bechtel will develop PFD's for use as the Standard
Plant Basic Design.

2.4.4.On a Task Order basis, Bechtel will develop additional drawings,
specifications, reports, studies, analyses, recommendations, estimates, data and
other documents suitable to be Issued for Review ("IFR") for use as the Standard
Plant Detailed Design. It is the intent of the parties that the Standard Plant
Detailed Design will include Bechtel Intellectual Property and may not be
disclosed by Evergreen without the prior written approval of Bechtel.

2.5.  Scope Book Phase.

        The Scope Book Phase shall not be finalized until the successful
demonstration test of the Existing Plant (as agreed by the parties in
Section 2.4.1) has been completed. The parties through their Representatives
shall perform the following activities under the TSA with respect to the
finalization of certain terms for each of the Identified Plants ("Scope Book
Phase"):

2.5.1.Evergreen shall provide the process design and the design and supply of
certain proprietary equipment;

2.5.2.Based on the modifications, testing and demonstration of the Existing
Plant during the TSA Phase, Bechtel shall develop the design criteria for the
balance of the Identified Plants (with the exception of Sasol-Lurgi equipment);

2.5.3.A detailed project definition for the Identified Plants will be created
during this stage. Basic engineering will be executed and detailed cost and
schedule estimates generated. The project definition will be optimized for the
selected scope of EPC work by refining it and developing the project schedule,
the project cost estimate and the project execution plan and all aspects of the
project, resulting in a Scope Book to be delivered at the end of the Scope Book
Phase;

2.5.4.The parties agree that the pricing for the EPC Services shall be developed
and agreed through an open book process and that the compensation terms under
the EPC Contracts for each of the Identified Plants shall be on a unit rate,
reimbursable cost basis with a service fee (to the extent practical, some
subsystems or unit operations may be purchased on a fixed price basis, for
example, silos, packaged boilers, or water purification systems may fit into
this category);

2.5.5.Bechtel and Evergreen shall, through the open book process, develop and
agree upon the scope of work, pricing and related schedules for each of the
Identified Plants, in each case taking into account all relevant factors
including costs for subcontractor purchase orders, on-site environmental
conditions, topographical features of the site, permit requirements and any
existing infrastructure or facilities;

2.5.6.Bechtel shall negotiate and execute purchase orders and agreements for
equipment, materials and services (other than those for which Evergreen is
responsible) either as agent for Evergreen or, subject to Evergreen providing
adequate security for any financial obligations which may become payable to such
vendors, in Bechtel's own name. In the event of cancellation or termination of
Bechtel, payment obligations for all agreements made in Bechtel's own name will
automatically be assigned to, and accepted by Evergreen;

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2.5.7.The parties shall agree upon a preliminary Scope Book and confirm their
agreement in writing;

2.5.8.The parties shall agree upon and finalize the EPC Contracts in the form of
Exhibit B for each of the Identified Plants; and

2.5.9.The parties will seek their respective corporate approvals for entering
into the EPC Contracts with respect to each of the Identified Plants.

2.6.  EPC Contract Phase.

        Subject to the other provisions of this Agreement, the parties, through
their Representatives, shall enter into EPC Contracts in the form of Exhibit B
to this Agreement. The parties shall additionally coordinate with respect to the
timing and schedule for the Notice to Commence Construction with respect to each
executed EPC Contract ("EPC Phase"). During the EPC Phase Bechtel will perform
detailed engineering, procurement and construction of the Identified Plants. The
Notice to Commence Construction for a Plant will not be issued until
satisfaction of the following conditions precedent:

2.6.1.The Existing Plant demonstration of capabilities will have been performed
to the satisfaction of both Parties and incorporated into the design during the
completed Scope Book Phase;

2.6.2.The parties shall agree upon the final Scope Book, which will include site
specific details, and confirm their agreement in writing;

2.6.3.Evergreen shall have cleared the Identified Plant site of all hazardous
substances which may exist on, above or under the Identified Plant site;

2.6.4.Evergreen shall have provided the Identified Plant site to Bechtel, all
necessary rights of access thereto and egress therefrom, and off-site rights of
way and easement as necessary for execution of the project;

2.6.5.Evergreen shall have secured all permits which are designated as the
responsibility of Evergreen in the permit matrix to be developed during the
Scope Book Phase and which are required to be secured prior to commencement of
construction on the Identified Plant site;

2.6.6.Evergreen shall have paid all amounts which may have become due to Bechtel
under the TSA, the Loaned Employee Agreement, the EPC Contract or this
Agreement;

2.6.7.Evergreen shall have obtained releases and indemnities acceptable to
Bechtel from the owner(s) of the other facilities on or adjacent to the site, by
which Bechtel shall be released from any liability arising out of or in
connection with loss or damage to such facilities, including consequential
damages; and

2.6.8.Any items that have been identified during the TSA Phase or the Scope Book
Phase that the parties have mutually agreed in the applicable EPC Contract are
conditions precedent to construction, have been completed.

2.7.  Delays.

        Each party shall promptly notify the other party as to any conditions
arising which are likely to cause delays in the completion of a particular item
of TSA Services or EPC Services, its anticipated duration, and such party's
proposed remedial action.

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ARTICLE III—BUSINESS DEVELOPMENT

3.1The parties shall cooperate to support Bechtel's business development efforts
to include the K- Fuel® process in EPC/CM proposals for plants that burn low
rank coals where Bechtel, in its sole discretion, desires to include such
offering. When Bechtel is submitting a proposal on a sole source basis and
desires to include the K- Fuel® process in such proposal, Evergreen will work
with Bechtel to incorporate the K- Fuel® process into an offering that meets the
customer's particular needs. During the term of this Agreement, when Bechtel is
submitting a proposal on a competitive basis, Evergreen will work with Bechtel
exclusively during the bidding phase to provide a proposal that includes the K-
Fuel® process.

3.2The parties shall cooperate to support Evergreen's business development
efforts to promote and/or license the K-Fuel® process and product to third
parties. Evergreen may, on a task order basis, utilize Bechtel and Bechtel
affiliate resources for assistance in providing financial modeling tools.

3.3At such time as Evergreen is submitting a proposal to a third party licensee
Evergreen shall work solely with Bechtel to provide a proposal for contemplated
EPC Services in connection with the proposed license. Evergreen shall utilize
reasonable efforts to assure that Bechtel is provided the opportunity to perform
the engineering, procurement and construction of plants constructed by third
party licensees. If the first Evergreen plant to be constructed is constructed
by a third party licensee, Evergreen shall ensure that the third party licensee
utilizes Bechtel for the engineering, procurement and construction services of
such plant.

ARTICLE IV—TERM AND TERMINATION

4.1.  Term.

        Except as expressly set forth in this Agreement, the terms and
conditions of this Agreement shall be in full force and effect from the date
hereof until the earlier to occur of (a) the termination of this Agreement by
Evergreen pursuant to Section 4.2; (b) the termination of this Agreement by
Bechtel pursuant to Section 4.3; and (c) execution of the EPC Contract for the
last of the Identified Plants. Except for the provisions of this Agreement that
expressly survive the termination of this Agreement, upon execution of the EPC
Contract for any Plant, this Agreement shall cease to apply with respect to that
Plant and the parties' respective rights, obligations and liabilities with
respect to the EPC Services for that Plant shall be exclusively governed by the
terms of such EPC Contract.

4.2.  Evergreen Termination.

        Evergreen shall have the right, exercisable at any time upon written
notice to Bechtel, to terminate this Agreement. Such notice of termination shall
be treated as contemporaneous notice of termination of the TSA and the Loaned
Employee Agreement and any termination of the TSA shall be treated as a
contemporaneous notice of termination of this Agreement. In the event of a
termination of this Agreement, Evergreen shall within thirty (30) days
thereafter, make payment to Bechtel of the amounts due under Section 9.3 of the
TSA, the Loaned Employee Agreement and Section 5.2 of this Agreement.

4.3.  Bechtel Termination.

        Bechtel shall have the right, exercisable at any time upon written
notice to Evergreen, to terminate this Agreement. Such notice of termination
shall not be treated as a notice of termination of the TSA or the Loaned
Employee Agreement, provided that any termination of the TSA by Bechtel pursuant
to Section 9.4 of the TSA shall be treated as a contemporaneous notice of
termination of this Agreement.

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ARTICLE V—EXCLUSIVITY AND TERMINATION FEE

5.1.  Exclusivity.

        Evergreen covenants and agrees that during the term of this Agreement,
none of Evergreen or its affiliates will engage, or agree to engage, or
participate in any discussions with any other contractor regarding the
engagement of, any contractor other than Bechtel or one of its affiliates to
provide EPC Services or to act in the role of an engineering, procurement or
construction contractor with respect to the Identified Plants. For the avoidance
of doubt, the parties acknowledge that Bechtel's scope or work for the
Identified Plants will not include: (i) procurement of the processor equipment
to be obtained from Lurgi South Africa (Pty) Ltd.; and (ii) process design, both
of which will be provided by Evergreen (the "Owner-Provided Procurement and
Design"). The parties agree that Identified Plants will have an aggregate
capital cost of at least one billion dollars ($1 billion) and shall include the
first Plant to be developed by Evergreen after the Existing Plant.

5.2.  Termination Fee.

5.2.1.In the event that Evergreen terminates this Agreement under Section 4.2,
Evergreen shall automatically become liable to make payment to Bechtel of a
termination fee (the "Termination Fee") in the amount listed below:

5.2.2.In the event that during the term of this Agreement Evergreen breaches its
obligations of exclusivity set forth in Section 5.1, then this Agreement shall
automatically be deemed to have been terminated by Evergreen pursuant to
Section 4.2 and Evergreen shall automatically become liable to make payment to
Bechtel of a Termination Fee in the amount listed below:

5.2.3.Additionally, in the event that Evergreen or an Evergreen affiliate, has
not entered into agreements with Bechtel or a Bechtel affiliate to perform EPC
Services for Identified Plants with an aggregate capital cost of at least one
billion dollars ($1 billion) by December 31, 2013, then this Agreement shall
automatically be deemed to have been terminated by Evergreen pursuant to
Section 4.2 and Evergreen shall automatically become liable to make payment to
Bechtel of a Termination Fee in the amount listed below:

Aggregate Capital Cost

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  Termination Fee

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

Equal to or greater than $1,000,000,000   $ 0
$760,000,000 - $999,999,999
 
$
2,000,000
$570,000,000 - $759,999,999
 
$
4,000,000
$380,000,000 - $569,999,999
 
$
6,000,000
$191,000,000 - $379,999,999
 
$
8,000,000
$0 - $190,999,999
 
$
10,000,000

5.2.4.This Section 5.2 shall survive termination of this Agreement. For the
avoidance of doubt, the parties acknowledge that if Evergreen terminates this
Agreement (or is deemed to have terminated this Agreement) under Section 4.2,
then Evergreen shall be obligated to pay only a single Termination Fee in the
amount listed above which correlates with the amount of aggregate capital costs
of Identified Plants for which Bechtel has been paid.

5.2.5.For the avoidance of doubt, if Bechtel terminates this Agreement for any
reason other than a material breach of the Agreement by Evergreen, then
Evergreen shall not be liable to Bechtel for the appropriate Termination Fee
above.

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ARTICLE VI—ASSIGNMENT

        Neither this Agreement nor any rights, duties or obligations hereunder
may be assigned in whole or in part by either party without the express written
consent of the other and any such purported assignment without such written
consent shall be null and void.

ARTICLE VII—NOTICES

        All notices or other communications provided for or required by this
Agreement ("Notices") shall be in writing and shall be effective upon receipt
given to the following addresses:

To Company:   Evergreen Inc.
1225 17th Street Suite 1300,
Denver, Colorado, 80202
Attention: Executive Vice President—Engineering
With a simultaneous copy to: General Counsel
To Contractor:
 
Bechtel Power Corporation
5275 Westview Drive
Frederick, MD 21703-8306
Attention: William R. Elliott
With a simultaneous copy to: Principal Counsel, Bechtel Power Corporation

        All Notices shall be given by (1) personal delivery or by electronic
communication with a confirmation copy sent by mail, return receipt requested or
(2) by registered or certified mail, return receipt requested. All Notices shall
be effective and shall be deemed delivered (i) if by personal delivery on the
date of delivery, (ii) if by electronic communication on the next business day
following transmittal, and (iii) if solely by mail on the date of actual
receipt. Company or Contractor may change its address for notice from time to
time by so notifying the other in accordance with this Article.

ARTICLE VIII—MISCELLANEOUS

8.1.  Entire Agreement.

        This Agreement and Exhibits hereunder incorporated herein, together with
the TSA, the Loaned Employee Agreement and the Confidentiality Agreement
described in Section 8.10 below, constitute the entire Agreement between the
parties with respect to the subject matter hereof as of the date first above
shown. With the exception of the TSA, the Loaned Employee Agreement and the
Confidentiality Agreement, this Agreement shall supersede all previous
specifications, proposals, representations, understandings, negotiations and
letters of intent, oral or written, expressed or implied, with respect to the
subject matter hereof between the parties hereto or their representatives.

8.2.  Equitable Adjustments.

        In the event that any of the provisions, or portions or applications
thereof, of this Agreement are held to be unenforceable or invalid by a court of
competent jurisdiction, Evergreen and Bechtel shall negotiate an equitable
adjustment in the provision(s) of this Agreement with a view toward effecting
the purpose of this Agreement and the validity and enforceability of the
remaining provisions, or portions or applications thereof, shall not be affected
thereby.

8.3.  Amendments.

        This Agreement may not be changed, altered, modified, or amended, except
by a written amendment executed by both parties.

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8.4.  Binding Nature.

        This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and permitted assigns.

8.5.  Headings.

        The Article and Section headings are for purposes of reference only and
shall not control or otherwise affect the information set forth therein.

8.6.  Governing Law.

        This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, but otherwise without giving effect to principles
of conflicts of law. This Section 8.6 shall survive the termination of this
Agreement.

8.7.  Management Negotiations.

        Any disputes arising under this Agreement (each, a "Dispute") that are
not resolved between Evergreen and Bechtel within ten (10) business days after
receipt by either party from the other party of a notice of such Dispute, shall
be referred by either Evergreen's or Bechtel's Representative to the Executive
Sponsors of Evergreen and Bechtel for resolution. If such Executive Sponsors,
negotiating in good faith, fail to reach an agreement within a reasonable period
of time, not exceeding twenty (20) days after such referral, then either
Evergreen or Bechtel may bring a claim pursuant to the terms of Section 8.8
below. This Section 8.7 shall survive the termination of this Agreement.

8.8.  Mediation/Arbitration of Disputes.

8.8.1.Mediation.    If the Dispute is not resolved within thirty (30) days after
delivery of the notice of Dispute, then either Party may give notice to the
other referring the Dispute to mediation and the Parties shall endeavour to
settle the Dispute by mediation. The Parties shall endeavour to agree upon a
mediator within ten (10) days after such referral, failing which, the mediator
shall be appointed by the New York office of JAMS. The mediation shall be
conducted in New York unless the Parties agree otherwise, and shall be
administered by JAMS pursuant to the rules and procedures of JAMS. At least one
representative of each Party with the authority to settle the Dispute shall be
present at the mediation.

8.8.2.Arbitration.    If the Parties are unable to settle the Dispute within
ninety (90) days after delivery of the notice of Dispute, the Dispute shall be
finally settled by arbitration by one or more arbitrators appointed in
accordance with the rules of JAMS. The arbitration proceedings shall be held at
New York. Any award entered by the arbitrator(s) shall be final, binding and
nonappealable and judgment may be entered thereon by either Party in accordance
with applicable law in any court of competent jurisdiction. This arbitration
provision shall be specifically enforceable.

8.8.3.Expenses.    Unless otherwise directed by the arbitrator, each Party shall
be responsible for its own expenses relating to the conduct of the mediation
and/or arbitration (including reasonable attorneys' fees and expenses) and shall
share the fees of JAMS equally. This Section 8.8 shall survive the termination
of this Agreement.

8.9.  Third Party Beneficiaries.

        The provisions of this Agreement are intended for the sole benefit of
Evergreen and Bechtel and there are no third-party beneficiaries hereof.

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8.10.  Confidentiality.

        All information provided pursuant to this Agreement by or on behalf of a
party, its affiliates or its representatives to the other party or its
affiliates or representatives shall be governed by that certain Confidentiality
Agreement, dated August 11, 2006, by and between Bechtel and Evergreen (the
"Confidentiality Agreement"). This Section 8.10 shall survive the termination of
this Agreement.

8.11.  No Waiver.

        Except as expressly provided to the contrary herein, any failure by
either party at any time to enforce or require the strict keeping and
performance by the other party of any of the terms and conditions of this
Agreement shall not constitute a waiver by such party of the particular term or
condition, and shall, under no circumstances, affect or impair the right of such
party (a) thereafter to enforce or require performance of such term or condition
or (b) thereafter to avail itself of any remedy provided under this Agreement
which it may have for any breach of such term or condition.

8.12.  Further Assurances.

        Evergreen and Bechtel will each use its reasonable efforts to implement
the provisions of this Agreement, and for such purpose each, at the reasonable
request of the other, will, without further consideration, promptly execute and
deliver or cause to be executed and delivered to the other such assistance, or
assignments, consents or other instruments in addition to those required by this
Agreement, in form and substance satisfactory to the other, as the other may
reasonably deem necessary or desirable to implement any provision of this
Agreement.

8.13.  Independent Contractor.

        Bechtel is an independent contractor, and nothing contained herein shall
be construed as constituting any relationship with Evergreen other than that of
owner and independent contractor, or as creating any relationship whatsoever
between Evergreen and Bechtel's employees. Except as may be expressly provided
otherwise in the Loaned Employee Agreement, neither Bechtel nor any of its
employees is or shall be deemed to be an employee of Evergreen.

8.14.  Counterparts.

        This Agreement may be executed in counterparts, and any party hereto may
execute any such counterpart, each of which when executed and delivered shall be
deemed to be an original and all of which counterparts taken together shall
constitute but one and the same instrument. This Agreement shall become
effective when each party hereto shall have received a counterpart hereof signed
by the other parties hereto. The parties agree that the delivery of this
Agreement may be affected by means of an exchange of facsimile signatures with
original copies to follow by mail or courier service.

8.15.  Consequential Damages.

        In no event shall either party be liable to the other party, whether in
contract, in tort (including, but not limited to, negligence and strict
liability), under any warranty, or otherwise, for any indirect, incidental,
special or consequential loss or damages (including, but not limited to loss of
profits, loss of interest or other financing charges or loss of use). For the
avoidance of doubt, the parties acknowledge that this Section 8.15 shall not
affect Evergreen's liability for payment of the applicable Termination Fee under
this Agreement. This Section 8.15 shall survive the termination of this
Agreement.

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        IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.

EVERGREEN ENERGY INC.  
By:
/s/  KEVIN COLLINS      
   

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Kevin Collins
Title: President and Chief Executive Officer  
BECHTEL POWER CORPORATION
 
By:
/s/  J. JEFFRY BRIGHTMAN      
   

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J. Jeffry Brightman
Title: Principal Vice President  

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