Exhibit 10.4
Evergreen Energy Inc. LOGO [evergreenenergylogo.jpg]
 
 
July 21, 2009

Mr. Theodore Venners
1225 17th Street, Suite 1300
Denver, CO 80202

Re:  Transition Agreement

Dear Mr. Venners:

This agreement and the attachments hereto (“Transition Agreement”) sets forth
the agreement between you and Evergreen Energy Inc. and its subsidiaries
(“Evergreen”) to effect an orderly, efficient and effective procedure for
implementing your transition from all officer positions and board seat(s) of
Evergreen to a position of Senior Advisor to the CEO.  The parties therefore
agree as follows:

 
1.
If required by the SEC, you and Evergreen shall coordinate the preparation and
release of an announcement pertaining to this Transition Agreement..  The
announcement shall include a statement, that during the period covered by the
Transition Agreement (the “Transition Period”), you will be assisting with the
proper, smooth and seamless transition of various C-Lock Technology, Inc.
projects to others within the C-Lock organization.  The announcement shall
include a quote in which you, as Founder of Evergreen and as a major
shareholder, state your confidence, support and commitment to the Evergreen team
and its success.  During the Transition Period, you will conduct your
performance and relationships in and out of the company in conformity with the
announcement.

 
2.
The Transition Period shall be for term of nine (9) months, commencing as of
July 1, 2009 (the “Effective Date”) and, during the Transition Period, you will
be expected to work between sixty (60) and ninety (90) hours per month.  You or
your designee shall be paid at the rate of $22,500 per month.

 
3.
During the Transition Period you will report to and take direction from
Evergreen’s CEO and work closely with him to insure effective coordination
between your activities and the Evergreen business plan.  The projects on which
you will work will be as directed, altered or changed by Evergreen’s CEO.  To
provide management updates on your assigned projects, you are expected to
initiate and participate in a minimum of one telephone call with Evergreen’s CEO
or his designee every week during the Transition Period.

 
4.
During the Transition Period, Evergreen will not furnish or maintain a regular
office for your use.  All of your services will be performed outside of
Evergreen’s offices except when you are in Denver, during which time Evergreen
will make reasonable

 
1
Evergreen Energy Inc. │ 1225 Seventeenth Street │ Suite 1300 │ Denver, Colorado
80202 │ Tel: (303) 293-2992 │ Fax: (303) 293-8430
 

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efforts to provide temporary office space for your use in performing the
transition work contemplated by this Agreement.

 
5.
During the Transition Period, Evergreen will provide you with reasonable
administrative and technical support, using Evergreen employees or others
designated by Evergreen’s CEO, for the Evergreen projects on which you will be
working.

 
6.
Evergreen will provide and pay for your personal health insurance until you
reach the age of 65.  Evergreen will provide and you will pay for personal
health insurance for your wife, Lori, unless you can obtain alternative coverage
for Lori.

 
7.
You will retain your ownership of 4,000 shares of C-Lock Technology, Inc.;
provided however, that you agree to convert your ownership to shares of
Evergreen stock if and when, and on the same terms as an exchange of shares
negotiated and consummated by Vince Cook and Jim Bitonti.

 
8.
Upon execution of this Transition Agreement and its exhibits, you will be
compensated thirty thousand dollars ($30,000) for your costs pertaining to the
organization of Green Search, LLC and for your legal costs in the preparation of
this Transition Agreement.

 
9.
You will execute the Non Solicitation and Non-Compete Agreement attached hereto
as Exhibit A.

 
10.
The parties will execute the Severance Agreement, Waiver and Release attached
hereto as Exhibit B.

 
11.
During the Transition Period, you may maintain and use as appropriate the title
of “Founder of Evergreen”.

 
12.
At the request of Evergreen’s CEO, you agree to properly and appropriately
introduce the CEO or others with whom you and the CEO mutually agree, to various
key individuals with whom you have a relationship, including, but not limited
to, Dean Gus Speth of Yale, WRI Chairman, EDF team, Governors Freudenthal and
Perry, UN officials and numerous individuals in the legislative and executive
branch of the federal government.

 
13.
The Employment Agreement between you and KFx Inc., (predecessor in name to
Evergreen), dated December 21, 2005 (the “Employment Agreement”) is hereby
terminated; provided however that: (a) the 600,000 shares of stock provided for
in Section 3 of the Employment Agreement shall vest, at your election, at the
end of the Transition Period, upon the sale by Evergreen of substantially all of
the assets or all of the stock of Buckeye Industrial Mining Company, or upon the
receipt by

 
2
Evergreen Energy Inc. │ 1225 Seventeenth Street │ Suite 1300 │ Denver, Colorado
80202 │ Tel: (303) 293-2992 │ Fax: (303) 293-8430
 
 

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Evergreen of financing in excess of $30 million;  and (b) Section 3(g)
pertaining to Tax Withholding shall survive the termination of the Employment
Agreement as provided for herein.  All outstanding stock options which you own
will immediately vest upon execution of this Transition Agreement.

 
14.
Administrative provisions include the following:

A.
Reimbursable Expenditures.  Subject to prior approval of expenses in excess of
$2,000 by Evergreen’s CEO, you shall be reimbursed for the reasonable costs of
travel, subsistence, lodging and out-of-pocket expenses (such as, but not
limited to, long distance telephone calls, photocopying and the like).  Air
travel shall be coach.  No other expense shall be reimbursable by Evergreen.

B.
Confidential Information.  All computer programs, drawings, designs, maps,
plans, know how, patents, inventions, data, reports and other physical and
intellectual property prepared by or on your behalf during the Transition Period
shall be the sole property of Evergreen.  All property in your possession that
is owned by Evergreen shall be delivered to Evergreen by you at the end of the
Transition Period, and shall not be reprinted, distributed, published, or
disclosed to third parties by you without the prior written consent of
Evergreen’s CEO.  Unpublished information (graphic or verbal) concerning
Evergreen for which you are aware, is disclosed to you by Evergreen or developed
by you through performance of your work shall not be disclosed to third parties
by you without the prior written consent of Evergreen’s CEO.  This provision
shall survive termination of this Transition Agreement.

C.
Early Termination.  Evergreen may terminate this Transition Agreement upon ten
(10) days written notice.  If Evergreen terminates this Transition Agreement
prior to six (6) months after the Effective Date, you shall be paid for the
entire period ending six (6) months after the Effective Date.

D.
Inspection of Work.  You shall permit Evergreen’s CEO or his designee to inspect
your work product, or any part thereof, and request periodic reports as the same
progresses.

E.
Record Keeping.  You shall maintain accurate and complete records in connection
with the performance of the assignments on which you are working.

F.
Controlling Law.  This Transition Agreement shall be governed by and interpreted
in accordance with the laws of the State of Colorado except those addressing
conflicts of law.  Each party hereby consents and agrees that any claims or
disputes between the parties hereto arising out of or related to this Transition
Agreement shall be brought and maintained in any federal or state court of
competent jurisdiction sitting in Denver County, State of Colorado.

 
3
Evergreen Energy Inc. │ 1225 Seventeenth Street │ Suite 1300 │ Denver, Colorado
80202 │ Tel: (303) 293-2992 │ Fax: (303) 293-8430
 
 

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Evergreen Energy Inc. LOGO [evergreenenergylogo.jpg]
 
 
 
G.
Sole Agreement.  This Transition Agreement and the Exhibits contains and sets
forth the entire agreement between you and Evergreen with respect to your
retirement from Evergreen, all previous agreements (including the Employment
Agreement) being expressly superseded and replaced by this Letter Agreement.  No
modification, alteration, or extension of this Letter Agreement shall be
effective unless in writing executed by the parties.

 
H.
Counterparts; Facsimile.  This Letter Agreement may be signed in counterparts,
and it shall be as effective when counterparts have been executed by the Parties
as if each party had signed the same counterpart.   This Agreement may be
delivered by facsimile.

To signify your approval of this Transition Agreement and all of the terms and
conditions, please execute and return one copy of this Transition Agreement and
Exhibits A and B to the undersigned.

Very truly yours,

Evergreen Energy Inc.

By: /s/ Thomas H. Stoner, Jr.
Thomas H. Stoner, Jr.
President & CEO

Accepted and approved this 22 day of July, 2009

/s/ Theodore Venners
Theodore Venners

 
4
Evergreen Energy Inc. │ 1225 Seventeenth Street │ Suite 1300 │ Denver, Colorado
80202 │ Tel: (303) 293-2992 │ Fax: (303) 293-8430
 
 

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Evergreen Energy Inc. LOGO [evergreenenergylogo.jpg]
 

Exhibit A
To
Transition Agreement
Dated Effective July 1, 2009

NON-SOLICITATION AND NON-COMPETITION AGREEMENT

In exchange for one dollar and other good and valuable consideration, the
receipt and sufficiency of which I now acknowledge, I agree that:
 
1.           I have or will obtain in the course of my employment and the
Transition Period confidential information about, personal knowledge of, and
influence over Customers (as defined in section 10 below) and Prospective
Customers (as defined in section 10 below) of Evergreen Energy Inc. and it
subsidiaries (“Evergreen”). For this reason, I covenant with Evergreen in the
terms set out in sections 2 to 5 inclusive below.

2.           I will not, during the course of the Transition Period (regardless
of whether I am required to attend work or not), make any contact, whether
formal or informal, written or oral, with any of Evergreen’s past or current
Customers or Prospective Customers with whom I have or had dealings pursuant to
my employment or consulting with Evergreen for any purpose other than furthering
Evergreen’s legitimate business interests. Without limiting the generality of
the preceding restriction, I expressly agree and acknowledge that it shall be a
breach of this section (2) if I make any such unauthorized contact in connection
with or concerning my intention to set up or to seek or take employment with a
Competing Business.

3.           I will not directly or indirectly, during the course of the
Transition Period (regardless of whether I am required to attend work or not)
either on my own behalf or on behalf of any other person, firm, or company:

a)           solicit or seek orders for business from any Customer or
Prospective Customer; or

b)           solicit or endeavour to entice away from or discourage from being
employed by Evergreen any person who, to my knowledge, is an employee or a
prospective employee of Evergreen nor will I employ or offer employment to or
procure the making of an offer of employment to any such employee on my own or
on any third party’s account.

4.           For a period of three (3) months after the expiration of the
Transition Period (or for such period thereafter that I am performing services
for Evergreen pursuant to a consulting or similar agreement), I will not,
without the consent in writing of the CEO of Evergreen, in connection with the
carrying on of any business related to or similar to Evergreen’s business,

 
5
Evergreen Energy Inc. │ 1225 Seventeenth Street │ Suite 1300 │ Denver, Colorado
80202 │ Tel: (303) 293-2992 │ Fax: (303) 293-8430
 
 

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whether on my own behalf or on behalf of any other person, firm, or company,
either alone or jointly with any other person, firm, or company, do any of the
following:

a)           directly or indirectly solicit or seek to procure orders for
business from any person, firm, or company who or which was during the three (3)
month period immediately before the expiration of the Transition Period:

i)           a Customer with whom, in the course of  my employment, I had
dealings (other than minimal dealings) during the three (3) month period
immediately before the expiration of the Transition Period; or

ii)           a Prospective Customer with whom in the course of my employment, I
had dealings (other than minimal dealings) during the three (3) month period
immediately before the expiration of the Transition Period;

b)           directly or indirectly do business with or for any such person,
firm or company as is referred to in sections 4 a) i) and ii) above; or

c)           interfere with or attempt to interfere with the business relations
of Evergreen with any of Evergreen’s Customers or Prospective Customers with
whom or which I had dealings (other than minimal dealings) during the three (3)
month period immediately before the expiration of the Transition Period.

5.           Nothing in section 4 above shall be construed as prohibiting
me from seeking, procuring, or transacting business which is not a Competing
Business.

6.           I undertake that I will not at any time during the three (3) month
period immediately after the expiration of the Transition Period (or for such
period thereafter that I am performing services for Evergreen pursuant to a
consulting or similar agreement), directly or indirectly on my own behalf or on
behalf of any third party, knowingly offer employment to or seek to procure an
offer of employment for any of Evergreen’s employees with whom I had dealings
(other than minimal dealings) during the three (3) month period immediately
before the expiration of the Transition Period.

7.           I will not at any time directly or indirectly entice or endeavour
to entice any person to breach the terms, whether written, verbal or customary,
of his or her employment with Evergreen.

8.           The restrictions set out above in sections 2 to 7 inclusive shall
survive the expiration of the Transition Period.

9.           The restrictions set out above in sections 2 to 7 inclusive do not
exceed what is reasonable and necessary in all of the circumstances to preserve
and protect Evergreen’s

 
6
Evergreen Energy Inc. │ 1225 Seventeenth Street │ Suite 1300 │ Denver, Colorado
80202 │ Tel: (303) 293-2992 │ Fax: (303) 293-8430
 
 

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Evergreen Energy Inc. LOGO [evergreenenergylogo.jpg]
 

legitimate interests and its connections with Customers and Prospective
Customers for whom or which I will have become a key business contact as a
result of my employment with Evergreen. Should any of the restrictions set out
above in sections 2 to 7 inclusive prove to be unenforceable for any reason, it
is hereby agreed and declared that each of the restrictions is separate and
distinct and shall be construed and applied separately from every other of the
restrictions. Further, if any of the restrictions is found by a court of
competent jurisdiction to be invalid because it exceeds what is reasonable and
necessary in all of the circumstances to preserve and protect Evergreen’s
legitimate interests and its connections with Customers and Prospective
Customers but the restriction in question would be valid if some part were
deleted or amended, the restriction in question shall apply with such deletions
or amendments or both as may be necessary to make it valid.

10.           For purposes of this Agreement, the following terms shall have the
following meanings:

a)           “Competing Business” means any business which competes with a
business carried on by Evergreen at the expiration of the Transition Period
provided that I was involved in the business in question (other than minimal
dealings) at any time within the three (3) month period immediately before that
date;
b)           “Customer” means any person, firm, or company to or for whom or
which Evergreen provides services in the course of its business;
c)           “Prospective Customer” means any person, firm, or company to or for
whom or which Evergreen has been in negotiations with a view to providing
services to or for such person, firm, or company, always provided that such
person, firm, or company shall not be a Prospective Customer if any such person,
firm, or company has informed Evergreen that he or she or it does not want
Evergreen to provide the services which have been the subject of such
negotiations or has appointed another person, firm, or company to provide such
services; and

 
11.           This Agreement may be signed in counterparts, and it shall be as
effective when counterparts have been executed by the Parties as if each party
had signed the same counterpart.   This Agreement may be delivered by facsimile
or PDF.

Executed this 22 day of July, 2009.

THEODORE VENNERS

/s/ Theodore Venners

 
7
Evergreen Energy Inc. │ 1225 Seventeenth Street │ Suite 1300 │ Denver, Colorado
80202 │ Tel: (303) 293-2992 │ Fax: (303) 293-8430
 
 

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Evergreen Energy Inc. LOGO [evergreenenergylogo.jpg]
 

Accepted and approved this 22 day of July, 2009

EVERGREEN ENERGY INC.

By: /s/ Tom Stoner
Tom Stoner
President & CEO

 
8
Evergreen Energy Inc. │ 1225 Seventeenth Street │ Suite 1300 │ Denver, Colorado
80202 │ Tel: (303) 293-2992 │ Fax: (303) 293-8430
 
 

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Exhibit B
To
Transition Agreement
Dated effective July 1, 2009

SEVERANCE AGREEMENT, WAIVER AND RELEASE

This Severance Agreement, Waiver and Release (the “Agreement”) is entered into
between Evergreen Energy Inc. (the “Company”), and Theodore Venners (the
“Employee”).  The “Effective Date” of this Agreement is as defined below in
Paragraph 7.

In consideration of the conditions, covenants and agreements set forth below,
for good and valuable consideration, the sufficiency of which is hereby
acknowledged, the Company and the Employee (collectively called the “Parties”)
agree as follows:
 
      1.          The Employee was the Founder of the Company and has been
employed by the Company since its founding until his separation from employment
at the termination of the Transition Agreement to which this Agreement is
attached.  The purpose of this Agreement is to settle all issues relating to his
employment and separation from employment.

      2.          The Company and the Employee, each without admitting any
liability or wrongdoing, desire to resolve amicably, and in the spirit of
compromise, all issues and differences between them in accordance with and in
consideration of the terms of this Agreement.
 
      3.          The Employee understands and acknowledges that whether or not
he signs this agreement, he is entitled to any earned but unpaid salary through
July 1, 2009, commissions, vacation pay, paid time off, expenses, or other
amounts to which the Employee already is entitled in accordance with the terms
of the Company’s established policy.
 
4.          Further Payment.  Pursuant to the Transition Agreement to, Company
agrees to pay the Employee as set forth therein

5.        Mutual Waiver and Release of Claims. In exchange for this Agreement
and in consideration of the payments and other benefit provided in the
Transition Agreement, which is in addition to anything of value to which the
Employee already is entitled, the Employee hereby irrevocably and
unconditionally releases and forever discharges the Company and its officers,
members, agents, directors, shareholders, supervisors, employees,
representatives, affiliates, and their successors and assigns, and all persons
acting by, through, under, or in concert with any of them, from any and all
charges, complaints, demands, damages, costs, expenses, causes of action,
action, rights, benefits, complaints, claims and liabilities of any kind or
nature

 
9
Evergreen Energy Inc. │ 1225 Seventeenth Street │ Suite 1300 │ Denver, Colorado
80202 │ Tel: (303) 293-2992 │ Fax: (303) 293-8430
 
 

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whatsoever, known or unknown, suspected or unsuspected, certain or contingent,
which the Employee at any time had or claimed to have regarding events that
occurred up to and including the Effective Date of this Agreement, including but
not limited to any and all such claims arising out of, related to, or in any
manner incidental to the Employee’s employment with the Company or his
separation from employment.
 
          Similarly, in consideration of the rights and obligations created by
this Agreement, the Company, and its officers, members, agents, directors,
shareholders, supervisors, employees, representatives, affiliates, and their
successors and assigns, and all persons acting by, through, under, or in concert
with the Company, hereby irrevocably and unconditionally release and forever
discharge the Employee and his heirs, successors, and assigns from any and all
charges, complaints, demands, damages, costs, expenses, causes of action,
action, rights, benefits, complaints, claims and liabilities of any kind or
nature whatsoever, known or unknown, suspected or unsuspected, certain or
contingent, which the Company at any time had or claimed to have regarding
events that occurred up to and including the Effective Date of this Agreement.
 
6.           Specific Claims Released.  This release includes, but is not
limited to, all claims arising under any federal, state or municipal law,
including the Americans with Disabilities Act, Title VII of the Civil Rights Act
of 1964, Equal Pay Act, Fair Labor Standards Act, Family and Medical Leave Act,
Age Discrimination in Employment Act, National Labor Relations Act, Occupational
Safety and Health Act, Employee Retirement Income Security Act (except as
specified below in this section), Colorado Wage Claim Act, the Colorado
Anti-Discrimination Act, and other statutes and the common law of the state of
Colorado, including claims for tort, breach of express or implied employment
contract, wrongful discharge, intentional infliction of emotional distress, and
defamation or injuries incurred on the job or upon separation from
employment.  The Parties understand and agree that they are waiving and
releasing any and all claims that they now have or might claim to have against
each other based on events up to the Effective Date of this Agreement,
regardless of their nature or origin, and the fact that such claim is not listed
above does not mean it is not included in this release.

This release does not preclude an action by either party to enforce the specific
terms of this Agreement or the Transition Agreement. It does not preclude
workers’ compensation claims, if any, that have already been filed or that
pertain to on-the-job injuries that have already been reported.  This release
does not preclude claims for benefits in which the Employee has become vested
under the Employee Retirement Income Security Act.
 
7.           ADEA Release; Effective Date.  The Employee acknowledges,
understands, and agrees as follows:

a.           He has carefully read and fully understands all of the provisions
of this Agreement, including the release provisions.

 
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Evergreen Energy Inc. │ 1225 Seventeenth Street │ Suite 1300 │ Denver, Colorado
80202 │ Tel: (303) 293-2992 │ Fax: (303) 293-8430
 
 

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b.           He knowingly and voluntarily agrees to all of the terms set forth
in this Agreement, and he intends to be legally bound by them.

c.           Through this Agreement, he is releasing the Company from any and
all claims, including claims under the Age Discrimination in Employment Act
(ADEA) and all other claims described above in Paragraphs 5 and 6 that he may
have against the Company and the other persons described above.

d.           He understands that rights or claims under the ADEA that may arise
after the Effective Date of this Agreement are not waived.

e.           He has been advised to, and has had the opportunity to, consult
with an attorney before executing this Agreement.

f.           By receiving the Severance Payment specified in this Agreement, he
is receiving valuable consideration in addition to anything to which he already
is entitled.

g.           He has been given the opportunity to have up to twenty-one (21)
days in which to consider this Agreement before signing it, and if he chooses to
sign it before the 21-day period has expired, he does so knowingly, voluntarily,
and without any compulsion from the Company or anyone else.

h.           He has seven (7) days after signing this Agreement to revoke
it.  This Agreement will become effective as to both Parties upon the expiration
of the seven-day revocation period (the “Effective Date”), if the Employee has
not revoked this Agreement.  To be effective, revocation must be in writing and
received by William G. Laughlin, General Counsel of the Company, within the
seven-day period.  The notice of revocation must be sent or delivered by letter
or transmitted via facsimile to Mr. Laughlin at the Company’s office in Denver,
Colorado, and must be received by him within the specified period.

8.           Covenant Not to Sue.  The Parties expressly covenant and agree
never to institute or participate in any suit or action, at law or in equity,
arbitration, administrative proceeding, or other proceeding, against each other
by reason of the claims released in this Agreement.  This covenant and agreement
specifically includes, without limitation, administrative actions, arbitrations,
actions in court of law and equity, class actions, and any type of action or
proceeding that may be filed in the future, but does not include an action or
claim to enforce the rights and obligations created by this Agreement.
 
9.           Non-Disparagement.  The Employee agrees that he will not make any
negative, disparaging, derogatory, or adverse statements, remarks, comments, or
other communications, in any form or format, to any third party regarding the
Company; any of its officers, directors, employees, or agents; or any of its
products.  The Company agrees that its officers, directors, and agents will not
make any negative, disparaging, derogatory, or adverse statements, remarks,

 
11
Evergreen Energy Inc. │ 1225 Seventeenth Street │ Suite 1300 │ Denver, Colorado
80202 │ Tel: (303) 293-2992 │ Fax: (303) 293-8430
 
 

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comments, or other communications, in any form or format, to any third party
regarding the Employee.

10.           Non-Disclosure.  The Employee agrees to keep the circumstances
regarding the negotiations, existence, conditions, and terms of this Agreement
strictly confidential.  The Employee agrees that he will not disclose any of
these items to any person, including but not limited to any former, current, or
prospective employee of the Company, with the exceptions that the Employee may
disclose the terms of this Agreement to his financial advisor, attorney(s),
accountant, family, or by order of, or in response to inquiry by, a court of law
or administrative agency.  It is further agreed that if the Employee discloses
the terms of this Agreement to any family member, the Employee will be
responsible for any breach of this Agreement by that family member.  It is
expressly agreed that this Non-Disclosure provision is an essential and material
provision of this Agreement.

11.           Confidential Information.  The Employee agrees that he will not at
any time, during or after the termination of his/her employment, reveal,
divulge, or make known to any person any confidential or proprietary information
(“Confidential Information”) that was made known to him as a result of his
employment with the Company.  “Confidential Information” shall mean any trade
secret or information of a secret, proprietary, or confidential nature to the
Company and its business operations that the Employee acquired during and as a
result of his employment, including but not limited to all methods, processes,
products, techniques, know-how, marketing strategies and plans, data, financial
statements and projections, business plans, inventions, improvements, or
discoveries (whether or not patentable or copyrightable), price lists,
forecasts, customer lists, customer files, and customer requirements, unless
such information is in the public domain to such an extent as to be readily
available to competitors.  This section shall survive the termination of this
Agreement.

12.           Breach of Provisions by Employee.  The Employee and the Company
enter into this Agreement with the understanding that all of the terms and
provisions of this Agreement, including but not limited to Paragraphs 5 through
11 inclusive, are material and important terms of this Agreement, and that the
amount of the Severance Payment made to the Employee has been based in part on
the value to the Company of these provisions.  In the event that the Employee
breaches any of the provisions of Paragraphs 5 through 11, the Company, in
addition to all remedies available to it at law and equity, shall be released
from its obligation to make any further payments or installments of the
Severance Payment.  However, in such event, the Employee’s covenants and
obligations in this Agreement shall remain in full force and effect.  Further,
the Employee agrees and acknowledges that any violation by him/her of Paragraphs
5 through 11 will result in irreparable damage to the Company and, therefore,
the Company may obtain injunctive or other equitable relief for any breach or
threatened breach of these Paragraphs, in addition to any other remedies
available to the Company.

13.           Non-Admission of Liability.  This Agreement is not, and shall not
be construed as, an admission by either party of any wrongdoing or liability, or
as an admission by either party

 
12
Evergreen Energy Inc. │ 1225 Seventeenth Street │ Suite 1300 │ Denver, Colorado
80202 │ Tel: (303) 293-2992 │ Fax: (303) 293-8430
 
 

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of any violation of the rights of any person, or of any violation of any order,
law, statute, duty, or contract.
 

14.           Intentionally left blank

15.           Intentionally left blank

16.           Personnel File and Release of Information.  The Parties agree that
a copy of this Agreement shall be maintained in the Employee’s personnel file,
and that the Company shall respond to any inquiries concerning his employment by
providing a neutral reference verifying only his position, dates of employment,
final salary rate and that his position at the Company had been eliminated.

17.           Unemployment Claims. The Company agrees not to contest any claim
for unemployment benefits made by the employee to the State of Colorado and
agrees that a claim for unemployment benefits would not violate the release
provisions of Paragraphs 5 through 8.  The parties understand that despite the
Non-Disclosure provisions of Paragraph 11 of this Agreement, the Employee may
provide, or may be required by the unemployment agency to provide, information
regarding the existence and amount of the Severance Payment provisions of this
Agreement in connection with his claim for unemployment benefits.

18.           Authority and Non-Assignment.  The Parties represent and warrant
that they have full authority to enter into this Agreement and that they have
not assigned or otherwise transferred, to any other person or entity, any
interest in any claim, demand, action and/or cause of action that they have, may
have, or may claim to have against each other.

19.           Accord and Satisfaction.  The Parties expressly acknowledge that
the Further Payment made pursuant to Paragraph 4 and the promises made herein
constitute a full accord and satisfaction of any and all claims between the
Parties.

20.           Warranties and Acknowledgments.  The Parties expressly warrant and
represent to each other the following:  (a) that no promise or inducement has
been offered except as expressly provided in this Agreement; (b) that this
Agreement is not in violation of or in conflict with any other agreement of the
Parties; and (c) that the Parties have had the opportunity to resolve all
questions concerning the meaning, legal nature, and binding effect of this
Agreement with counsel of their choosing.
 
21.           Cooperation with the Company.  The Employee agrees to make himself
available at reasonable times by telephone or otherwise to assist the management
of the Company in connection with their requests, investigations, or inquiries
concerning events or matters relevant to the period of time the Employee was
with the Company and related to the scope of his duties.  Employee shall be
entitled to reimbursement of reasonable expenses incurred in connection with
such assistance and, should such assistance be required following the expiration
of the Transition

 
13
Evergreen Energy Inc. │ 1225 Seventeenth Street │ Suite 1300 │ Denver, Colorado
80202 │ Tel: (303) 293-2992 │ Fax: (303) 293-8430
 
 

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Evergreen Energy Inc. LOGO [evergreenenergylogo.jpg]
 
Period, a reasonable hourly consulting fee for Employee’s time spent in excess
of two hours per month rendering such assistance  The Employee shall fully
cooperate with the Company in the defense or prosecution of any claims or
demands related to the period of time he was with the Company.  This cooperation
would include voluntarily submitting to interviews, providing information, or
appearing in court or discovery proceedings as requested by attorneys or other
authorized representatives of the Company.   Employee shall be entitled to
reimbursement of expenses but no other compensation in connection with
appearances in court or to otherwise provide testimony.
 
22.           Miscellaneous.

a.           Successors and Assigns.  This Agreement shall be binding in all
respects upon, and shall inure to the benefit of, the heirs, successors, and
assigns of the Parties.

b.           Severability.  In the event that a court of competent jurisdiction
enters a final judgment holding invalid any material provision of this
Agreement, the remainder of this Agreement shall be fully enforceable.

c.           Integration.  This Agreement constitutes the entire agreement of
the Parties and a complete merger of prior negotiations and agreements with
respect to the matters set forth herein. This Agreement shall not be modified
except in writing signed by the Parties or their authorized representatives.

d.           Waiver.  No term or condition of this Agreement shall be deemed to
have been waived, nor shall there be an estoppel against the enforcement of any
provision of this Agreement, except in a written document signed by the party
charged with the waiver or estoppel.  No written waiver shall be deemed a
continuing waiver unless specifically stated herein, and the written waiver
shall operate only as to the specific term or condition waived.

e.           Mistake.  The Company and the Employee each forever waive all
rights to assert that this Agreement, or any provision of it, was the result of
a mistake in law or in fact. Further, they forever waive all rights to assert
that any or all of the legal theories or factual assumptions used for
negotiating purposes are for any reason inaccurate or inappropriate, or that
this Agreement is incomplete or otherwise unenforceable, in any respect.
 
f.           Fees and Costs.  In any action to enforce, interpret, or seek
damages for violation of this Agreement, the prevailing party shall recover all
reasonable attorney fees, litigation expenses, and court costs.

g.           Governing Law.  This Agreement shall be governed by and construed
in accordance with the laws of the State of Colorado and, where applicable, of
the United States.

 
14
Evergreen Energy Inc. │ 1225 Seventeenth Street │ Suite 1300 │ Denver, Colorado
80202 │ Tel: (303) 293-2992 │ Fax: (303) 293-8430
 
 

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Evergreen Energy Inc. LOGO [evergreenenergylogo.jpg]
 

h.           Priority of Documents.  If there is any conflict between this
Agreement and the Transition Agreement to which this Agreement is an Exhibit,
the Transition Agreement shall prevail.
 
i.           Counterparts; Facsimile.  This Agreement may be signed in
counterparts, and it shall be as effective when counterparts have been executed
by the Parties as if each party had signed the same counterpart.   This
Agreement may be delivered by facsimile.

Theodore Venners
 
/s/ Theodore Venners
 
Dated: July 22, 2009
Evergreen Energy Inc.
 
 
By: /s/ Thomas H. Stoner, Jr.
         Thomas H. Stoner, Jr.
          President & CEO
Dated: July 22, 2009
 

 
 
15
Evergreen Energy Inc. │ 1225 Seventeenth Street │ Suite 1300 │ Denver, Colorado
80202 │ Tel: (303) 293-2992 │ Fax: (303) 293-8430