Exhibit 4.1
 EXECUTION COPY
   
 


EVERGREEN ENERGY INC.,


AS ISSUER,


EACH OF THE
SUBSIDIARY GUARANTORS PARTY HERETO,


AS GUARANTORS


AND


U.S. BANK NATIONAL
ASSOCIATION,


AS TRUSTEE


8.00% CONVERTIBLE
SECURED NOTES DUE 2012


INDENTURE


DATED AS OF JULY
30, 2007



   
 














CROSS-REFERENCE
TABLE*


	
  TIA Indenture Section

  	
   

  	
  Section

  
	
   

  	
   

  	
   

  
	
  Section 310(a)(1)

  	
   

  	
  9.09

  
	
  (a)(2)

  	
   

  	
  9.09

  
	
  (a)(3)

  	
   

  	
  N.A.**

  
	
  (a)(4)

  	
   

  	
  N.A.

  
	
  (a)(5)

  	
   

  	
  9.09

  
	
  (b)

  	
   

  	
  9.09

  
	
  (c)

  	
   

  	
  N.A.

  
	
  Section 311(a)

  	
   

  	
  9.13

  
	
  (b)

  	
   

  	
  9.13

  
	
  (c)

  	
   

  	
  N.A.

  
	
  Section 312(a)

  	
   

  	
  2.05

  
	
  (b)

  	
   

  	
  14.03

  
	
  (c)

  	
   

  	
  14.03

  
	
  Section 313(a)

  	
   

  	
  9.15

  
	
  (b)(1)

  	
   

  	
  N.A.

  
	
  (b)(2)

  	
   

  	
  9.15

  
	
  (c)

  	
   

  	
  9.15; 14.02

  
	
  (d)

  	
   

  	
  9.15

  
	
  Section 314(a)

  	
   

  	
  5.02; 5.03

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)(1)

  	
   

  	
  14.04(a)

  
	
  (c)(2)

  	
   

  	
  14.04(a)

  
	
  (c)(3)

  	
   

  	
  N.A.

  
	
  (d)

  	
   

  	
  N.A.

  
	
  (e)

  	
   

  	
  14.04(b)

  
	
  (f)

  	
   

  	
  N.A.

  
	
  Section 315(a)

  	
   

  	
  9.01(a); 9.01(b)(i)

  
	
  (b)

  	
   

  	
  9.14; 14.02

  
	
  (c)

  	
   

  	
  9.01(a)

  
	
  (d)

  	
   

  	
  9.01(b)

  
	
  (e)

  	
   

  	
  8.11

  
	
  Section 316(a) (last sentence)

  	
   

  	
  2.09

  
	
  (a)(1)(A)

  	
   

  	
  8.05

  
	
  (a)(1)(B)

  	
   

  	
  8.04

  
	
  (a)(2)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  8.07

  
	
  (c)

  	
   

  	
  14.05

  
	
  Section 317(a)(1)

  	
   

  	
  8.08; 14.01

  
	
  (a)(2)

  	
   

  	
  8.09; 14.01

  
	
  (b)

  	
   

  	
  2.04; 14.01

  
	
  Section 318(a)

  	
   

  	
  14.01

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)

  	
   

  	
  14.01

  







*                 Cross-Reference
Table shall not, for any purpose, be deemed a part of this Indenture.


**          N.A. means Not
Applicable.
















TABLE OF
CONTENTS






 


	
  

  	
   

  	
   

  	
  Page

  
	
  ARTICLE 1

  	
   

  	
   

  
	
  DEFINITIONS AND INCORPORATION BY REFERENCE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.01. 

  	
  Definitions

  	
   

  	
  1

  
	
  Section 1.02. 

  	
  Trust Indenture Act Provisions

  	
   

  	
  15

  
	
  Section 1.03. 

  	
  Rules of Construction

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  	
   

  
	
  THE SECURITIES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 2.01. 

  	
  Form and Dating

  	
   

  	
  16

  
	
  Section 2.02. 

  	
  Execution and Authentication

  	
   

  	
  17

  
	
  Section 2.03. 

  	
  Registrar, Paying Agent and Conversion Agent

  	
   

  	
  18

  
	
  Section 2.04. 

  	
  Paying Agent to Hold Money and Securities in
  Trust

  	
   

  	
  18

  
	
  Section 2.05. 

  	
  Holder Lists

  	
   

  	
  19

  
	
  Section 2.06. 

  	
  Transfer and Exchange

  	
   

  	
  19

  
	
  Section 2.07. 

  	
  Replacement Securities

  	
   

  	
  20

  
	
  Section 2.08. 

  	
  Outstanding Securities

  	
   

  	
  20

  
	
  Section 2.09. 

  	
  Treasury Securities

  	
   

  	
  21

  
	
  Section 2.10. 

  	
  Temporary Securities

  	
   

  	
  21

  
	
  Section 2.11. 

  	
  Cancellation

  	
   

  	
  21

  
	
  Section 2.12. 

  	
  Legend; Additional Transfer and Exchange
  Requirements

  	
   

  	
  21

  
	
  Section 2.13. 

  	
  CUSIP Numbers

  	
   

  	
  28

  
	
  Section 2.14. 

  	
  Persons Deemed Owners

  	
   

  	
  28

  
	
  Section 2.15. 

  	
  Defaulted Interest

  	
   

  	
  29

  
	
  Section 2.16. 

  	
  Tax Treatment

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  	
   

  
	
  REDEMPTION; REPURCHASE OF SECURITIES AT OPTION OF HOLDERS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 3.01. 

  	
  Provisional Redemption

  	
   

  	
  30

  
	
  Section 3.02. 

  	
  Redemption Procedures

  	
   

  	
  30

  
	
  Section 3.03. 

  	
  Purchase of Securities at Option of the Holder
  upon a Fundamental Change

  	
   

  	
  31

  
	
  Section 3.04. 

  	
  Effect of Fundamental Change Purchase Notice

  	
   

  	
  35

  
	
  Section 3.05. 

  	
  Deposit of Fundamental Change Purchase Price

  	
   

  	
  36

  
	
  Section 3.06. 

  	
  Securities Purchased in Part

  	
   

  	
  36

  
	
  Section 3.07. 

  	
  Repayment to the Company

  	
   

  	
  36

  
	
  Section 3.08. 

  	
  Compliance with Securities Laws upon Purchase of
  Securities

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  	
   

  
	
  CONVERSION

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.01. 

  	
  Conversion Privilege

  	
   

  	
  37

  
	
  Section 4.02. 

  	
  Conversion upon Satisfaction of Collateral Price
  Trigger

  	
   

  	
  37

  
	
  Section 4.03. 

  	
  Conversion upon Make-Whole Fundamental Changes

  	
   

  	
  38

  
	
  Section 4.04. 

  	
  Conversion Procedure

  	
   

  	
  39

  



 



 i
 









 


	
  Section 4.05. 

  	
  Taxes on Conversion

  	
   

  	
  39

  
	
  Section 4.06. 

  	
  Company to Provide Stock

  	
   

  	
  40

  
	
  Section 4.07. 

  	
  Adjustment of Conversion Rate

  	
   

  	
  40

  
	
  Section 4.08. 

  	
  No Adjustment

  	
   

  	
  46

  
	
  Section 4.09. 

  	
  Stockholder Rights Plans

  	
   

  	
  47

  
	
  Section 4.10. 

  	
  Effect of Reclassification, Consolidation, Merger
  or Sale on Conversion Privilege

  	
   

  	
  47

  
	
  Section 4.11. 

  	
  Other Adjustments

  	
   

  	
  48

  
	
  Section 4.12. 

  	
  Notice of Adjustment

  	
   

  	
  48

  
	
  Section 4.13. 

  	
  Trustee’s Disclaimer

  	
   

  	
  48

  
	
  Section 4.14. 

  	
  Settlement upon Conversion

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  	
   

  
	
  COVENANTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.01. 

  	
  Payment of Securities

  	
   

  	
  50

  
	
  Section 5.02. 

  	
  Reports and Certain Information

  	
   

  	
  51

  
	
  Section 5.03. 

  	
  Compliance Certificates

  	
   

  	
  52

  
	
  Section 5.04. 

  	
  Maintenance of Corporate Existence

  	
   

  	
  52

  
	
  Section 5.05. 

  	
  Stay, Extension and Usury Laws

  	
   

  	
  52

  
	
  Section 5.06. 

  	
  Maintenance of Office or Agency of the Trustee,
  Registrar, Paying Agent and Conversion Agent

  	
   

  	
  52

  
	
  Section 5.07. 

  	
  Notice of Default

  	
   

  	
  52

  
	
  Section 5.08. 

  	
  Additional Interest Notice

  	
   

  	
  52

  
	
  Section 5.09. 

  	
  Ownership in Evergreen Operations

  	
   

  	
  53

  
	
  Section 5.10. 

  	
  Limitation on Debt and Disqualified or Preferred
  Stock

  	
   

  	
  53

  
	
  Section 5.11. 

  	
  Limitation on Restricted Payments

  	
   

  	
  54

  
	
  Section 5.12. 

  	
  Limitation on Liens

  	
   

  	
  54

  
	
  Section 5.13. 

  	
  Limitation on Asset Sales

  	
   

  	
  54

  
	
  Section 5.14. 

  	
  Termination of Certain Covenants

  	
   

  	
  56

  
	
  Section 5.15. 

  	
  Release of Security Interests

  	
   

  	
  56

  
	
  Section 5.16. 

  	
  No Impairment of The Security Interests

  	
   

  	
  56

  
	
  Section 5.17. 

  	
  Release of Collateral

  	
   

  	
  56

  
	
  Section 5.18. 

  	
  Interest Rate Reduction

  	
   

  	
  57

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  	
   

  
	
  COLLATERAL

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 6.01. 

  	
  Collateral

  	
   

  	
  57

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
   

  	
   

  
	
  CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 7.01. 

  	
  Company May Consolidate, Etc., Only on Certain
  Terms

  	
   

  	
  58

  
	
  Section 7.02. 

  	
  Successor Substituted

  	
   

  	
  59

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
   

  	
   

  
	
  DEFAULT AND REMEDIES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 8.01. 

  	
  Events of Default

  	
   

  	
  59

  
	
  Section 8.02. 

  	
  Acceleration

  	
   

  	
  60

  
	
  Section 8.03. 

  	
  Other Remedies

  	
   

  	
  61

  



 



 ii
 









 


	
  Section 8.04. 

  	
  Waiver of Defaults and Events of Default

  	
   

  	
  61

  
	
  Section 8.05. 

  	
  Control by Majority

  	
   

  	
  61

  
	
  Section 8.06. 

  	
  Limitations on Suits

  	
   

  	
  62

  
	
  Section 8.07. 

  	
  Rights of Holders to Receive Payment and to
  Convert

  	
   

  	
  62

  
	
  Section 8.08. 

  	
  Collection Suit by Trustee

  	
   

  	
  62

  
	
  Section 8.09. 

  	
  Trustee May File Proofs of Claim

  	
   

  	
  62

  
	
  Section 8.10. 

  	
  Priorities

  	
   

  	
  63

  
	
  Section 8.11. 

  	
  Undertaking for Costs

  	
   

  	
  63

  
	
  Section 8.12. 

  	
  Delay or Omission Not Waiver

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
   

  	
   

  
	
  TRUSTEE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 9.01. 

  	
  Certain Duties and Responsibilities of Trustee

  	
   

  	
  63

  
	
  Section 9.02. 

  	
  Certain Rights of Trustee

  	
   

  	
  64

  
	
  Section 9.03. 

  	
  Trustee Not Responsible for Recitals or Issuance
  or Securities

  	
   

  	
  66

  
	
  Section 9.04. 

  	
  May Hold Securities

  	
   

  	
  66

  
	
  Section 9.05. 

  	
  Moneys Held in Trust

  	
   

  	
  66

  
	
  Section 9.06. 

  	
  Compensation and Reimbursement

  	
   

  	
  67

  
	
  Section 9.07. 

  	
  Reliance on Officers’ Certificate

  	
   

  	
  67

  
	
  Section 9.08. 

  	
  Disqualification: Conflicting Interests

  	
   

  	
  67

  
	
  Section 9.09. 

  	
  Corporate Trustee Required; Eligibility

  	
   

  	
  67

  
	
  Section 9.10. 

  	
  Resignation and Removal; Appointment of Successor

  	
   

  	
  68

  
	
  Section 9.11. 

  	
  Acceptance of Appointment by Successor

  	
   

  	
  69

  
	
  Section 9.12. 

  	
  Merger, Conversion, Consolidation or Succession
  to Business

  	
   

  	
  70

  
	
  Section 9.13. 

  	
  Preferential Collection of Claims Against the
  Company

  	
   

  	
  70

  
	
  Section 9.14. 

  	
  Notice of Defaults

  	
   

  	
  70

  
	
  Section 9.15. 

  	
  Reports by Trustee

  	
   

  	
  70

  
	
  Section 9.16. 

  	
  Preferential Collection of Claims

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
   

  	
   

  
	
  SUBORDINATION OF SECURITIES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 10.01. 

  	
  Agreement of Subordination upon Occurrence of
  Collateral Price Trigger

  	
   

  	
  71

  
	
  Section 10.02. 

  	
  Payments to Holders

  	
   

  	
  71

  
	
  Section 10.03. 

  	
  Subrogation of Securities

  	
   

  	
  73

  
	
  Section 10.04. 

  	
  Authorization to Effect Subordination

  	
   

  	
  73

  
	
  Section 10.05. 

  	
  Notice to Trustee

  	
   

  	
  73

  
	
  Section 10.06. 

  	
  Trustee’s Relation to Senior Indebtedness

  	
   

  	
  74

  
	
  Section 10.07. 

  	
  No Impairment of Subordination

  	
   

  	
  74

  
	
  Section 10.08. 

  	
  Certain Conversions Not Deemed Payment

  	
   

  	
  74

  
	
  Section 10.09. 

  	
  Article Applicable to Paying Agents

  	
   

  	
  75

  
	
  Section 10.10. 

  	
  Senior Indebtedness Entitled to Rely

  	
   

  	
  75

  
	
  Section 10.11. 

  	
  Reliance on Judicial Order or Certificate of
  Liquidating Agent

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
   

  	
   

  
	
  AMENDMENTS, SUPPLEMENTS AND WAIVERS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 11.01. 

  	
  Without Consent of Holders

  	
   

  	
  75

  
	
  Section 11.02. 

  	
  With Consent of Holders

  	
   

  	
  76

  
	
  Section 11.03. 

  	
  Compliance with Trust Indenture Act

  	
   

  	
  77

  



 



 iii
 









 


	
  Section 11.04. 

  	
  Revocation and Effect of Consents

  	
   

  	
  78

  
	
  Section 11.05. 

  	
  Notation on or Exchange of Securities

  	
   

  	
  78

  
	
  Section 11.06. 

  	
  Trustee to Sign Amendments, Etc.

  	
   

  	
  78

  
	
  Section 11.07. 

  	
  Effect of Supplemental Indentures

  	
   

  	
  78

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
   

  	
   

  
	
  SATISFACTION AND DISCHARGE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 12.01. 

  	
  Satisfaction and Discharge of the Indenture

  	
   

  	
  78

  
	
  Section 12.02. 

  	
  Repayment to the Company

  	
   

  	
  79

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 13

  	
   

  	
   

  
	
  GUARANTEES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 13.01. 

  	
  The Guarantees

  	
   

  	
  79

  
	
  Section 13.02. 

  	
  Guarantees Unconditional

  	
   

  	
  79

  
	
  Section 13.03. 

  	
  Discharge; Reinstatement

  	
   

  	
  80

  
	
  Section 13.04. 

  	
  Waiver by the Subsidiary Guarantors

  	
   

  	
  80

  
	
  Section 13.05. 

  	
  Subrogation and Contribution

  	
   

  	
  80

  
	
  Section 13.06. 

  	
  Stay of Acceleration

  	
   

  	
  80

  
	
  Section 13.07. 

  	
  Limitation on Amount of Guarantees

  	
   

  	
  81

  
	
  Section 13.08. 

  	
  Execution and Delivery of Guarantee

  	
   

  	
  81

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 14

  	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 14.01. 

  	
  Trust Indenture Act Controls

  	
   

  	
  81

  
	
  Section 14.02. 

  	
  Notices

  	
   

  	
  81

  
	
  Section 14.03. 

  	
  Communications by Holders with Other Holders

  	
   

  	
  82

  
	
  Section 14.04. 

  	
  Certificate and Opinion as to Conditions
  Precedent

  	
   

  	
  82

  
	
  Section 14.05. 

  	
  Record Date for Vote or Consent of Holders

  	
   

  	
  83

  
	
  Section 14.06. 

  	
  Rules by Trustee, Paying Agent, Registrar and
  Conversion Agent

  	
   

  	
  83

  
	
  Section 14.07. 

  	
  Legal Holidays

  	
   

  	
  83

  
	
  Section 14.08. 

  	
  Governing Law; Jury Trial Waiver

  	
   

  	
  83

  
	
  Section 14.09. 

  	
  No Adverse Interpretation of Other Agreements

  	
   

  	
  83

  
	
  Section 14.10. 

  	
  No Recourse against Others

  	
   

  	
  83

  
	
  Section 14.11. 

  	
  Successors

  	
   

  	
  83

  
	
  Section 14.12. 

  	
  Multiple Counterparts

  	
   

  	
  83

  
	
  Section 14.13. 

  	
  Separability

  	
   

  	
  84

  
	
  Section 14.14. 

  	
  Calculations in Respect of the Securities

  	
   

  	
  84

  
	
  Section 14.15. 

  	
  Table of Contents, Headings, Etc.

  	
   

  	
  84

  



 



 iv















	
  Exhibit A

  	
  Form of Note:

  
	
   

  	
  - Assignment Form

  
	
   

  	
  - Form of Conversion Notice

  
	
   

  	
  - Form of Fundamental Change Purchase Notice

  
	
   

  	
  - Form of Certificate to be Delivered upon Exchange
  or Registration of Transfer of Restricted Securities

  
	
  Exhibit B

  	
  Table showing the Increase in Conversion Rate in
  connection with a Make-Whole Fundamental Change

  



 



 v















THIS
INDENTURE, dated as of July 30, 2007, is between EVERGREEN ENERGY INC., a
Delaware corporation (the “Company”),
EVERGREEN OPERATIONS, LLC, a Delaware limited liability company, KFx PLANT,
LLC, a Wyoming limited liability company, KFx OPERATIONS, LLC, a Wyoming
limited liability company, LANDRICA DEVELOPMENT COMPANY, a South Dakota
corporation, BUCKEYE INDUSTRIAL MINING CO., an Ohio corporation (the “Subsidiary Guarantors”) and U.S. BANK NATIONAL ASSOCIATION,
a national banking association, as trustee (in such capacity and not in its
individual capacity, the “Trustee”).


In
consideration of the premises and the purchase of the Securities by the Holders
thereof, the parties hereto agree as follows for the equal and ratable benefit
of the Holders.


ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE


Section 1.01.  Definitions.


“Additional Amount” has the meaning specified in Section
4.02.


“Additional Interest” has the meaning set forth in Section
5(a) of the Registration Rights Agreement. 
Unless the context otherwise requires, all references herein or in the
Securities to “interest” accrued or payable as of any date shall include,
without duplication, any Additional Interest accrued or payable as of such date
as provided in the Registration Rights Agreement.


“Additional Interest Notice” has the meaning specified in
Section 5.08.


“Additional Shares” has the meaning specified in Section
4.03.


“Affiliate” of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. 
For purposes of this definition, “control” (including, with correlative
meanings, the terms “controlling,” “controlled by” and “under common control
with”), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of such Person, whether through the ownership of voting securities,
by agreement or otherwise.


“Agent” means any Registrar, Paying Agent or Conversion
Agent.


“Agent Members” has the meaning specified in Section 2.01(d).


“Applicable  Conversion Rate”
means, at any time, for each $1,000 principal amount of Securities, $1,000
divided by the Conversion Rate in effect at such time, subject to adjustment as
provided by this Indenture.


“Applicable  Conversion Price”
means, at any time, an amount equal to $1,000 divided by the Applicable
Conversion Rate at such time, rounded to the nearest cent.


“Applicable Procedures” means, with respect to any transfer
or exchange of beneficial ownership interests in a Global Security, the rules
and procedures of the Depositary, in each case to the extent applicable to such
transfer or exchange.



 1
 









“Applicable Stock Price” means, in respect of a Conversion
Date, the arithmetic average of the Daily Volume-weighted Average Prices of the
Common Stock over the Cash Settlement Averaging Period relating to such
Conversion Date.


“Asset Sale” means any sale, lease, transfer or other
disposition of any assets by any Subsidiary Guarantor, including by means of a
merger, consolidation or similar transaction and including any sale or issuance
of the Equity Interests of any Subsidiary Guarantor (each of the above referred
to as a “disposition”), provided
that the following are not included in the definition of “Asset Sale”:


(a)           a disposition to a Wholly Owned
Subsidiary of Evergreen Operations that is or upon such disposition becomes a
Subsidiary Guarantor, including the sale or issuance by any Subsidiary
Guarantor of any Equity Interests of such Subsidiary to any Wholly Owned
Subsidiary of Evergreen Operations that is or upon such disposition becomes a
Subsidiary Guarantor;


(b)           the disposition by any Subsidiary
Guarantor in the ordinary course of business of (i) Cash and Cash management
investments, (ii) inventory and other assets acquired and held for resale in
the ordinary course of business, (iii) damaged, worn out or obsolete assets, or
(iv) rights granted to others pursuant to leases or licenses;


(c)           the sale or discount of accounts
receivable arising in the ordinary course of business in connection with the
compromise or collection thereof;


(d)           a transaction covered by Article 7;


(e)           a Restricted Payment permitted under
Section 5.11; and


(f)            any disposition in a transaction or
series of related transactions of assets with a fair market value of less than
$250,000.


“Average Life” means, with respect to any Debt, the quotient
obtained by dividing (a) the sum of the products of (i) the number of years
from the date of determination to the dates of each successive scheduled
principal payment of such Debt and (ii) the amount of such principal payment by
(b) the sum of all such principal payments.


“Bankruptcy Law” has the meaning specified in Section 8.01.


“beneficial owner” has the meaning specified in Section
3.03(a).


“Board of Directors” means, except as used in the definition
of Fundamental Change where Section 3.03(a)(4) applies and except where the
context otherwise requires, the board of directors of the Company.


“Business Day” means any day, except a Saturday, Sunday or
legal holiday on which banking institutions in The City of New York, New
York or the city in which the Corporate Trust Office is located are authorized
or obligated by law or executive order to close.


“Capital Lease” means, with respect to any Person, any lease
of any property which, in conformity with GAAP, is required to be capitalized
on the balance sheet of such Person.


“Capital Stock” means, with respect to any Person, any and
all shares of stock of a corporation, partnership or membership interests or
other equivalent interests (however designated, whether voting or 



 2
 









non-voting) in such Person’s equity, entitling the
holder to receive a share of the profits and losses, and a distribution of
assets, after liabilities, of such Person.


“capital stock” has the meaning specified in Section 3.03(a).


“Cash” means such coin or currency of the United States as at
any time of payment is legal tender for the payment of public and private
debts.


“Cash Amount” has the meaning specified in Section 4.14(e).


“Cash Collateral Account” has the meaning specified in
Section 6.01(c).


“Cash Settlement Averaging Period” means:


(a)           in respect of a Conversion Date,
occurring after the date of the Company’s notice of redemption, the 20 Trading
Day period beginning on the Trading Day immediately succeeding the date of such
redemption notice, if the Company has called the Securities for redemption;


(b)           in respect of a Conversion Date
occurring during the period beginning on the Trading Day immediately succeeding
the 22nd Scheduled Trading Day preceding the Maturity Date, the 20 Trading Day
period beginning on such 22nd Scheduled Trading Day; and


(c)           in respect of any other Conversion
Date, the 20 Trading Day period beginning on the Trading Day following the
final Trading Day of the Conversion Retraction Period relating to such
Conversion Date.


“Close of Business” means 5:00 p.m. New York City time.


“Certificated Security” means a Security that is in
substantially the form attached hereto as Exhibit A and is issued pursuant to
Section 2.12(a)(i).


“Closing Price” of the Common Stock (or any other security
for which a Closing Price must be determined) on any Trading Day means the
reported last sale price per share (or, if no last sale price is reported, the
average of the bid and ask prices per share or, if more than one in either
case, the average of the average bid and the average ask prices per share) on
such date reported by NYSE Arca or, if the Common Stock (or such other
security) is not quoted or listed for trading on NYSE Arca, as reported by the
principal national or regional securities exchange on which the Common Stock
(or such other security) is listed or otherwise as provided in this Indenture.


“Collateral” has the meaning specified in Section 6.01(c).


“Collateral Agent” means U.S. Bank National Association, or
its successor, acting in such capacity pursuant to the Security Agreement.


“Collateral Price Trigger” has the meaning specified in
Section 5.17(a).


“Collateral Price Trigger Notice” has the meaning specified
in Section 5.17(b).


“Common Stock” means, subject to Section 4.10, shares of
common stock of the Company, no par value per share, at the date of this
Indenture or shares of any class or classes resulting from any reclassification
or reclassifications thereof and that have no preference in respect of
dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the 



 3
 









Company and that are not subject to redemption by the
Company; provided that if at any time there shall
be more than one such resulting class, the shares of each such class then so
issuable shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.


“Company” means the party named as such in the first
paragraph of this Indenture until a successor replaces it pursuant to the
applicable provisions of this Indenture, and thereafter “Company” shall mean
such successor Company.


“Company Order” has the meaning specified in Section 2.02(d).


“continuing director” has the meaning specified in Section
3.03(a).


“Conversion Agent” has the meaning specified in Section 2.03.


“Conversion Date” has the meaning specified in Section
4.04(a).


“Conversion Notice” has the meaning specified in Section
4.04(a).


“Conversion Rate” means, for each $1,000 principal amount of
Securities, 190.4762 shares of Common Stock, subject to adjustment from time to
time as set forth in this Indenture.


“Conversion Retraction Period” has the meaning specified in
Section 4.14(c).


“Conversion Settlement Date” has the meaning specified in
Section 4.14(d).


“Corporate Trust Office” means the office of the Trustee at
which at any time the trust created by this Indenture shall be principally
administered, which office at the date of the execution of this Indenture is
located at 60 Livingston Avenue, St. Paul, Minnesota 55107-2292, Attention:
Corporate Trust Services (Evergreen 8.00% Convertible Secured Notes due 2012),
or such other office as the Trustee may designate by written notice to the
Company.


“Coupon Make-Whole
Payment” means, on any determination date, an amount per $1,000
principal amount of Securities equal to the present value of all remaining
scheduled payments of interest on each Security to be redeemed from (and
including) such date to (and including) the Maturity Date, computed using a
discount rate equal to the Treasury Yield plus 50 basis points.


“Custodian” has the meaning specified in Section 8.01.


“Daily  Volume-weighted Average Price” of the Common Stock means the
daily volume-weighted average price for the Common Stock on NYSE Arca during
the period beginning at 9:30:01 a.m., New York City time (or such other time as
is the applicable official open of trading at NYSE Arca) and ending at 4:00:00
p.m., New York City time (or such other time as is the official close of
trading at NYSE Arca), as reported by Bloomberg Financial Services through its
“Volume at Price” (EEE <Equity> VAP <Go>) functions. The Daily
Volume-weighted Average Price shall be rounded to the nearest cent.


“Debt”
means, with respect to any Person, without duplication:


(a)           all indebtedness of such Person for borrowed
money;


(b)           all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments;



 4
 









(c)           all obligations of such Person in
respect of letters of credit, bankers’ acceptances or other similar
instruments, excluding obligations in respect of trade letters of credit or
bankers’ acceptances issued in respect of trade payables to the extent not
drawn upon or presented, or, if drawn upon or presented, the resulting
obligation of the Person is paid within 10 Business Days;


(d)           all obligations of such Person to pay
the deferred and unpaid purchase price of property or services which are
recorded as liabilities under GAAP, excluding trade payables arising in the
ordinary course of business;


(e)           all obligations of such Person as
lessee under Capital Leases;


(f)            all Debt of other Persons Guaranteed
by such Person to the extent so Guaranteed;


(g)           all Debt of other Persons secured by
a Lien on any asset of such Person, whether or not such Debt is assumed by such
Person; and


(h)           all obligations of such Person under
Hedging Agreements.


The amount of Debt of any Person shall be deemed to
be:


(i)            with respect to contingent
obligations, the maximum liability upon the occurrence of the contingency
giving rise to the obligation;


(ii)           with respect to Debt secured by a
Lien on an asset of such Person but not otherwise the obligation, contingent or
otherwise, of such Person, the lesser of (x) the fair market value of such
asset on the date the Lien attached and (y) the amount of such Debt;


(iii)          with respect to any Debt issued with
original issue discount, the face amount of such Debt less the remaining
unamortized portion of the original issue discount of such Debt;


(iv)          with respect to any Hedging Agreement,
the net amount payable if such Hedging Agreement terminated at that time due to
default by such Person; and


(v)           otherwise, the outstanding principal
amount thereof.


“Default” means any event that is, or after notice or passage
of time or both would be, an Event of Default.


“Depositary” has the meaning specified in Section 2.01(b).


“Designated Senior Indebtedness” means the obligations of the Company under
any Senior Indebtedness in which the instrument creating or evidencing the same
or any related agreements or documents to which the Company is a party
expressly provides that such Senior Indebtedness shall be “Designated Senior
Indebtedness” for purposes of this Indenture; provided
that the instrument, agreement or other document may place limitations and
conditions on the right of the Senior Indebtedness to exercise the rights of
Designated Senior Indebtedness.


“Disqualified Equity
Interests” means Equity Interests that by their terms or upon the
happening of any event are:


(a)           required to be redeemed or redeemable
at the option of the holder prior to the Stated Maturity of the Securities for
consideration other than Qualified Equity Interests; or



 5
 









(b)           convertible at the option of the
holder into Disqualified Equity Interests or exchangeable for Debt;


provided that Equity Interests
will not constitute Disqualified Equity Interests solely because of provisions
giving holders thereof the right to require repurchase or redemption upon an
“asset sale” or “change of control” occurring prior to the Stated Maturity of
the Securities if those provisions:


(i)            are no more favorable to the holders
than Section 5.13 and Section 3.03 and


(ii)           specifically state that repurchase or
redemption pursuant thereto will not be required prior to the Company’s
repurchase of the Securities as required by this Indenture.


“Disqualified Stock”
means Capital Stock constituting Disqualified Equity Interests.


“Distributed Property” has the meaning specified in Section
4.07(c).


“Effective Date” has the meaning specified in Section
4.03(a)).


“Equity Interests” means all Capital Stock and all warrants
or options with respect to, or other rights to purchase, Capital Stock, but
excluding Debt convertible into equity.


“Event of Default” has the meaning specified in Section 8.01.


“Evergreen Operations” means Evergreen Operations, LLC, a Delaware
limited liability corporation.


“Excess Proceeds” has the meaning specified in Section
5.13(a).


“Exchange Act” means the United States Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder,
as in effect from time to time.


“Expiration Date” has the meaning specified in Section
5.13(b).


“Ex Date” means (i) when used with respect to any dividend or
distribution, the first date on which the Common Stock trades, regular way, on
the relevant exchange or in the relevant market from which the sale price was
obtained without the right to receive such dividend or distribution; and (ii)
when used with respect to any tender offer or exchange offer, the first date on
which the Common Stock trades, regular way, on the relevant exchange or in the
relevant market from which the sale price was obtained after the expiration
time.


“Expiration Time” has the meaning specified in Section
4.07(e).


“Fort Union Plant” means the Company’s K-Fuel refined coal
facility located in Gillette, Wyoming.


“Fundamental Change” has the meaning specified in Section
3.03(a).


“Fundamental Change Company Notice” has the meaning specified
in Section 3.03(b).


“Fundamental Change Purchase Date” has the meaning specified
in Section 3.03(a).


“Fundamental Change Purchase Notice” has the meaning
specified in Section 3.03(c).



 6
 









“Fundamental Change Purchase Price” has the meaning specified
in Section 3.03(a).


“GAAP” means generally accepted accounting principles in the
United States of America as in effect as of the Issue Date.


“Global Security” means a permanent Global Security that is
in substantially the form attached hereto as Exhibit A and which is deposited
with the Depositary or its custodian and registered in the name of the
Depositary or its nominee.


“Guarantee” means any obligation, contingent or otherwise, of
any Person directly or indirectly Guaranteeing any Debt or other obligation of
any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Debt or other obligation of such other Person (whether arising by virtue
of partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for purposes of
assuring in any other manner the obligee of such Debt or other obligation of
the payment thereof or to protect such obligee against loss in respect thereof,
in whole or in part; provided that
the term “Guarantee” does not include
endorsements for collection or deposit in the ordinary course of business.  The term “Guarantee”
used as a verb has a corresponding meaning.


“Hedging Agreement” means (i) any interest rate swap
agreement, interest rate cap agreement or other agreement designed to protect
against fluctuations in interest rates or (ii) any foreign exchange forward
contract, currency swap agreement or other agreement designed to protect
against fluctuations in foreign exchange rates or (iii) any commodity or raw
material futures contract or any other agreement designed to protect against
fluctuations in raw material prices.


“Holder” means the person in whose name a Security is
registered in the Register.


“Incur” means,
with respect to any Debt or Capital Stock, to incur, create, issue, assume or
Guarantee such Debt or Capital Stock.  If
any Person becomes a Subsidiary on any date after the date of this Indenture,
the Debt and Capital Stock of such Person outstanding on such date shall be
deemed to have been Incurred by such Person on such date for purposes of
Section 5.10, but will not be considered the sale or issuance of Equity
Interests for purposes of Section 5.13. 
The accretion of original issue discount or payment of interest in kind
will not be considered an Incurrence of Debt.


“Indenture”
means this Indenture as amended or supplemented from time to time pursuant to
the terms of this Indenture, including the provisions of the TIA that are
explicitly incorporated in this Indenture by reference to the TIA.


“Initial Interest Rate” means a per annum rate of interest
equal to 8.00%.


“Initial Purchasers” means Credit Suisse Securities (USA)
LLC, Capital One Southcoast, Johnson Rice & Company L.L.C. and Natexis
Bleichroeder Inc.


“Interest Payment Date” means February 1 and August 1 of each
year, commencing February 1, 2008.


“Interest Payment Record Date” means January 15 or July 15
(whether or not a Business Day), as the case may be, immediately preceding the
relevant Interest Payment Date.


“Interest Rate Reduction” has the meaning specified in
Section 5.18(a).



 7
 









“Issue Date” means the date on which the Securities are
originally issued under this Indenture.


“junior securities” has the meaning specified in Section
10.08.


“Legal Holiday” has the meaning specified in Section 14.07.


“Lien” means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale or
other title retention agreement or Capital Lease).


“Make-Whole Fundamental Change” means any transaction or
event described in clause (i), (ii), (iii) or (v) under the definition of
Fundamental Change; provided that,
for the purpose of defining a Make-Whole Fundamental Change, clause (z) of
Section 3.03(a) shall not apply with respect to any transaction or event
described in clause (ii) of such definition.


“Maturity Date” means August 1, 2012.


“Merger Event” has the meaning specified in Section 4.10.


“NASDAQ” means the NASDAQ Stock Market.


“Net Cash Proceeds”
means, with respect to any Asset Sale, the proceeds of such Asset Sale in the
form of Cash (including (i) payments in respect of deferred payment obligations
to the extent corresponding to principal, but not interest, when received in
the form of Cash, and (ii) proceeds from the conversion of other consideration
received when converted to Cash), net of:


(a)           brokerage commissions and other fees
and expenses related to such Asset Sale, including fees and expenses of
counsel, accountants and investment bankers;


(b)           provisions for taxes as a result of
such Asset Sale without regard to the consolidated results of operations of the
Company and its Subsidiaries;


(c)           payments required to be made to
holders of minority interests in Subsidiaries as a result of such Asset Sale or
to repay Debt outstanding at the time of such Asset Sale that is secured by a
Lien on the property or assets sold; and


(d)           appropriate amounts to be provided as
a reserve against liabilities associated with such Asset Sale, including
pension and other post-employment benefit liabilities, liabilities related to
environmental matters and indemnification obligations associated with such
Asset Sale, with any subsequent reduction of the reserve other than by payments
made and charged against the reserved amount to be deemed a receipt of Cash.


“Non-Payment Default”
has the meaning specified in Section 10.02(b).


“Notice of Default”
has the meaning specified in Section 8.01.


“NYSE” means the New York Stock Exchange.


“Obligations” means, with respect to any Debt, all
obligations (whether in existence on the Issue Date or arising afterwards,
absolute or contingent, direct or indirect) for or in respect of principal
(when due, upon acceleration, upon redemption, upon mandatory repayment or
repurchase pursuant to a mandatory offer to purchase, or otherwise), premium,
interest, penalties, fees, indemnification, reimbursement and other amounts
payable and liabilities with respect to such Debt, including all interest 



 8
 









accrued or accruing after the commencement of any
bankruptcy, insolvency or reorganization or similar case or proceeding at the
contract rate (including, without limitation, any contract rate applicable upon
default) specified in the relevant documentation, whether or not the claim for
such interest is allowed as a claim in such case or proceeding.


“Offering Circular” means the Confidential Offering Circular
dated July 25, 2007, relating to the Securities.


“Offer to Purchase” has the meaning specified in Section
5.13(b).


“Officer” means, with respect to any Person, the Chairman or
any Co-Chairman of the Board, any Vice Chairman of the Board, the Chief
Executive Officer, the Chief Operating Officer, the Chief Legal Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary, any Assistant Secretary or any Vice President of
such Person.


“Officers’ Certificate” means a certificate signed by at
least two Officers of the Company; provided, however, that for purposes of Section 4.12 and Section 5.03,
“Officers’ Certificate” means a certificate signed by the principal executive
officer, principal financial officer or principal accounting officer of the
Company and at least one other Officer of the Company.


“Opinion of Counsel” means a written opinion from legal
counsel containing, as applicable, the information specified in Section
14.04.  The counsel may be an employee of
or counsel to the Company who is reasonably satisfactory to the Trustee.


“Paying Agent” has the meaning specified in Section 2.03.


“Payment Blockage Notice” has the meaning specified in
Section 10.02(b).


“Payment Default” has the meaning specified in Section
10.02(a).


“Permitted Business” means any of the businesses in which the
Company and its Subsidiaries are engaged on the Issue Date, and any business
reasonably related, incidental, complementary or ancillary thereto.


“Permitted Debt” has the meaning specified in Section 5.10.


“Permitted Liens” means:


(a)           Liens existing on the Issue Date;


(b)           Liens securing the Securities;


(c)           pledges or deposits under worker’s
compensation laws, unemployment insurance laws or similar legislation, or good
faith deposits in connection with bids, tenders, contracts or leases, or to
secure public or statutory obligations, performance or surety bonds, customs
duties and the like, or for the payment of rent, in each case incurred in the
ordinary course of business and not securing Debt;


(d)           Liens imposed by law, such as
carriers’, vendors’, warehousemen’s and mechanics’ liens, in each case for sums
not yet due or being contested in good faith and by appropriate proceedings;


(e)           Liens in respect of taxes and other
governmental assessments and charges which are not yet due or which are being
contested in good faith and by appropriate proceedings;



 9
 









(f)            Liens securing reimbursement
obligations with respect to letters of credit that encumber documents and other
property relating to such letters of credit and the proceeds thereof;


(g)           survey exceptions, encumbrances, easements
or reservations of, or rights of others for, licenses, rights of way, sewers,
electric lines, telegraph and telephone lines and other similar purposes, or
zoning or other restrictions as to the use of real property, not interfering in
any material respect with the conduct of the business of the Company and its
Subsidiaries;


(h)           licenses or leases or subleases as
licensor, lessor or sublessor of any of the Company’s or any of its
Subsidiaries’ property, including intellectual property, in the ordinary course
of business;


(i)            customary Liens in favor of trustees
and escrow agents, and netting and setoff rights, banker’s liens and the like
in favor of financial institutions and counterparties to financial obligations
and instruments, including Hedging Agreements;


(j)            Liens on assets pursuant to merger
agreements, stock or asset purchase agreements and similar agreements in
respect of the disposition of such assets;


(k)           options, put and call arrangements,
rights of first refusal and similar rights relating to investments in joint
ventures, partnerships and the like;


(l)            judgment liens, and Liens securing
appeal bonds or letters of credit issued in support of or in lieu of appeal
bonds, so long as no event of default then exists under a judgment default;


(m)          Liens incurred in the ordinary course
of business securing obligations not in excess of $2.5 million and not securing
Debt and not in the aggregate materially detracting from the value of the
properties or their use in the operation of the business of the Company and its
Subsidiaries;


(n)           Liens (including the interest of a
lessor under a Capital Lease) on property that secure Debt Incurred for the
purpose of financing all or any part of the purchase price or cost of
construction or improvement of such property and which attach within 365
calendar days after the date of such purchase or the completion of construction
or improvement;


(o)           Liens on property of a Person at the
time such Person becomes a Subsidiary of the Company, provided
such Liens were not created in contemplation thereof and do not extend to any
other property of the Company or any Subsidiary;


(p)           Liens on property at the time the
Company or any of its Subsidiaries acquires such property, including any
acquisition by means of a merger or consolidation with or into the Company or a
Subsidiary of such Person, provided such Liens were not created in
contemplation thereof and do not extend to any other property of the Company or
any Subsidiary;


(q)           Liens securing Debt or other
obligations of the Company or a Subsidiary of the Company or a Wholly Owned
Subsidiary;


(r)            Liens securing Hedging Agreements so
long as such Hedging Agreements relate to Debt that is, and is permitted to be
under this Indenture, secured by a Lien on the same property securing such
Hedging Agreements;


(s)           extensions, renewals or replacements
of any Liens referred to in clauses (a), (b), (n), (o) or (p) in connection
with the refinancing of the obligations secured thereby, provided
that such Lien does



 10















not extend to any other property and, except as
contemplated by the definition of Permitted Refinancing Debt, the amount
secured by such Lien is not increased;


(t)            Liens securing Debt or other
obligations related to any Project; and


(u)           other Liens securing obligations in
an aggregate amount not exceeding $3.5 million.


“Permitted Refinancing Debt” has the meaning specified in
Section 5.10(b).


“Person” or “person” means
an individual, a corporation, a partnership, a limited liability company, an
association, a trust or any other entity, including a government or political
subdivision or an agency or instrumentality thereof.


“Preferred Stock” means, with respect to any Person, any and
all Capital Stock which is preferred as to the payment of dividends or distributions,
upon liquidation or otherwise, over another class of Capital Stock of such
Person.


“Principal Amount” of the Security means the
Principal Amount as set forth on the face of the Security and adjusted as set
forth on the “Schedule of Increases and Decreases” attached to the Security,
which shall not exceed $95 million.


“Project” means the planning, development, financing,
construction, testing and operation of one or more K-Fuel or K-Direct refined
coal facilities at a designated site, and all activity related thereto, with or
without one or more project partners and investors, other than the Fort Union
Plant.  As used herein, Project shall
include all activity undertaken by Evergreen Energy International LLC, a
Delaware limited liability company, and exclude all activity undertaken by the
Company directly, or by any Subsidiary Guarantor.


“Purchase Debt” has the meaning specified in Section 5.13(b).


“QIB” means a qualified institutional buyer as defined in
Rule 144A.


“Qualified Equity Interests” means all Equity Interests of a
Person other than Disqualified Equity Interests.


“Qualified Stock” means all Capital Stock of a Person other
than Disqualified Stock.


“record date”
means, with respect to the events specified in Section 4.07, the meaning
specified in Section 4.07(f).


“Redemption Date” means the date specified by the Company for
the redemption of Securities pursuant to Section 3.01 hereof.


“Redemption Notice” has the meaning specified in Section
3.02(a).


“Reduced Interest Rate” means a per annum rate of interest
equal to 5.00%.


“Reduced Interest Rate Trigger” has the meaning specified in
Section 5.18(a).


“Reference Property” has the meaning specified in Section
4.10.


“Register” has the meaning specified in Section 2.03.



 11
 









“Registrar” has the meaning specified in Section 2.03.


“Registration Rights Agreement” means the Registration Rights
Agreement, dated as of the date hereof, among the Company, the Subsidiary
Guarantors and the Initial Purchasers.


“Responsible Officer”,
when used with respect to the Trustee, means any officer within the Corporate
Trust Office of the Trustee and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject and who
shall have direct responsibility for the administration of this Indenture.


“Restricted Certificated Security” means a Certificated
Security that is a Restricted Security.


“Restricted Global Security” means a Global Security that is
a Restricted Security.


“Restricted Legend” has the meaning specified in Section
2.12(f).


“Restricted Payments” has the meaning specified in Section
5.11(a).


“Restricted Security” means a Security required to bear the
Restricted Legend called for by Section 2.12(f).


“Rule 144” means Rule 144 under the Securities Act or any
successor to such rule, as it may be amended from time to time.


“Rule 144A” means Rule 144A under the Securities
Act or any successor to such rule, as it may be amended from time to time.


“Rule 144A Information” has the meaning specified in
Section 5.02(b).


“Scheduled Trading Day” means a day that is scheduled to be a
Trading Day.


“SEC” means the United States Securities and Exchange
Commission, as from time to time constituted, created under the Exchange Act,
or, if at any time after the execution of this Indenture the SEC is not
existing and performing the duties now assigned to it under the TIA, then the
body performing such duties at such time.


“Security Agreement” means the Security Agreement dated as of
the date hereof among the Company, the Subsidiary Guarantors, the Trustee and
U.S. Bank National Association, as Collateral Agent thereunder.


“Security Documents” means the Security Agreement and all
other security documents granting a security interest in any assets of any
Person to secure the Obligations under the Securities, as may be amended,
restated, supplemented or otherwise modified from time to time.


“Security” or “Securities”
means the Company’s 8.00% Convertible Secured Notes due 2012, as amended or
supplemented from time to time pursuant to the terms of this Indenture, that
are issued under this Indenture.


“Securities Act” means the United States Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder, as in
effect from time to time.



 12
 









“Securities Custodian” means the Trustee, as custodian with
respect to the Global Securities, or any successor thereto.


“Senior Indebtedness” means the principal of, premium, if
any, interest, including any interest accruing after the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowed as a claim in the proceeding, and rent payable on or in
connection with, and all fees, costs, expenses and other amounts accrued or due
on or in connection with, Debt of the Company whether secured or unsecured,
absolute or contingent, due or to become due, outstanding on the date of this
Indenture or thereafter created, incurred, assumed, Guaranteed or in effect
Guaranteed by the Company, including all deferrals, renewals, extensions, or
refundings of, or amendments, modifications or supplements to, the
foregoing.  “Senior Indebtedness” does
not include:


(a)           any Debt that expressly provides that
such Debt shall not be senior in right of a payment to the Securities or
expressly provides that such Debt is pari passu or
junior to the Securities; and


(b)           any Debt to any of the Company’s
majority-owned Subsidiaries.


“Settlement Amount” has the meaning specified in Section
4.14(e).


“Significant Subsidiary” means any Subsidiary of the Company
which has: (i) consolidated assets or in which the Company and its other
Subsidiaries have investments equal to or greater than 10% of the Company’s
total consolidated assets; or (ii) consolidated gross revenue equal to or
greater than 10% of the Company’s consolidated gross revenue, measured as at
the end of the Company’s most recently completed fiscal year in the case of
consolidated assets or investments or for the most recently completed fiscal year
in the case of consolidated gross revenue.


“Specified Indebtedness” has the meaning set forth in Section
8.01(g).


“Spin-Off” has the meaning specified in Section 4.07(c).


“Spin-Off Securities” has the meaning specified in Section
4.07(c).


“Stated Maturity” means (a) with respect to any Debt, the
date specified as the fixed date on which the final installment of principal of
such Debt is due and payable or (b) with respect to any scheduled installment
of principal of or interest on any Debt, the date specified as the fixed date
on which such installment is due and payable as set forth in the documentation
governing such Debt, not including any contingent obligation to repay, redeem
or repurchase prior to the regularly scheduled date for payment.


“Stock Price” has the meaning specified in Section 4.03.


“Subordinated Debt” means any Debt of the Company or any
Subsidiary Guarantor which is subordinated in right of payment to the
Securities or the Subsidiary Guarantee, as applicable, pursuant to a written
agreement to that effect.


“Subsidiary” means, with respect of any Person, any
corporation, association or other business entity of which more than 50% of the
outstanding Voting Stock is owned, directly or indirectly, by, or, in the case
of a partnership, the sole general partner or the managing partner or the only
general partners of which are, such Person and one or more Subsidiaries of such
Person (or a combination thereof). Unless otherwise specified, “Subsidiary”
means a Subsidiary of the Company.



 13
 









“Subsidiary Guarantee” has the meaning specified in Section
13.01.


“Subsidiary Guarantor” means each of the parties named as
such in the first paragraph of this Indenture and any other Subsidiary that
executes a Subsidiary Guarantee, in each case until such Subsidiary Guarantor
is released from its Subsidiary Guarantee pursuant to the terms of this
Indenture.


“TIA” means the United States Trust Indenture Act of 1939, as
amended, and the rules and regulations thereunder as in effect on the date of
this Indenture; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
then “TIA” means, to the extent required by such amendment, the Trust Indenture
Act of 1939 as so amended.


“Trading Day” means a day during which trading in the Common
Stock generally occurs on NYSE Arca or, if the Common Stock is not quoted or
listed for trading on NYSE Arca, on the principal national or regional
securities exchange on which the Common Stock is listed or quoted.


“Treasury Yield”
means the yield to maturity at the time of computation of the Coupon Make-Whole
Payment of United States Treasury securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release
H.15 (519) that has become publicly available at least two Business Bays prior
to the Redemption Date (or, if such Statistical Release is no longer published,
any publicly available source for similar market data)) most nearly equal to
the then remaining term to the Maturity Date; provided,
however, that if the then remaining term to the Maturity Date is not
equal to the constant maturity of a United States Treasury security for which a
weekly average yield is given, the Treasury Yield shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the then remaining term to the Maturity Date is less than
one year, the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year shall be used.


“Trigger Event” has the meaning specified in Section 4.07(c).


“Trust Officer” means, with respect to the Trustee, any
officer within the Corporate Trust Services department (or any successor
department) of the Trustee located at the Corporate Trust Office of the
Trustee, who shall have direct responsibility for the administration of this
Indenture, and also means, with respect to any particular corporate trust matter,
any other officer of the Trustee to whom such corporate trust matter is
referred because of such officer’s knowledge of and familiarity with the
particular subject.


“Trustee” means U.S. Bank National Association, not in its individual capacity, but solely in its capacity as trustee
hereunder, until a successor replaces it pursuant to the applicable provisions
of this Indenture and, thereafter, shall mean such successor Trustee.


“Unrestricted Certificated Security” means a Certificated
Security that is not a Restricted Security.


“Unrestricted Global Security” means a Global Security that
is not a Restricted Security.


“U.S. Government Obligations” means obligations issued or
directly and fully Guaranteed or insured by the United States of America or by
any agent or instrumentality thereof, provided that
the full faith and credit of the United States of America is pledged in support
thereof.



 14
 









“Vice President” when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title “vice president.”


“Voting Stock” means, with respect to any Person, Capital
Stock of any class or kind ordinarily having the power to vote for the election
of directors, managers or other voting members of the governing body of such
Person.


“Wholly Owned” means, with respect to any Subsidiary, a
Subsidiary all of the outstanding Capital Stock of which (other than any
director’s qualifying shares) is owned by the Company or one or more Wholly
Owned Subsidiaries (or a combination thereof).


Section 1.02.  Trust Indenture Act
Provisions.  Whenever this
Indenture refers to a provision of the TIA, that provision is incorporated by
reference in and made a part of this Indenture. 
The Indenture shall also include those provisions of the TIA required to
be included herein by the provisions of the TIA.  The following TIA terms used in this
Indenture have the following meanings:


“Commission” means the SEC;


“indenture securities” means the Securities;


“indenture security Holder” means a Holder;


“indenture to be qualified” means this Indenture;


“indenture trustee” or “institutional trustee”
means the Trustee; and


“obligor” on the indenture securities means the Company and
any successor obligor on the Securities.


All
other terms used in this Indenture that are defined in the TIA, defined by TIA
reference to another statute or defined by any SEC rule and not otherwise
defined herein have the meanings assigned to them therein.


Section 1.03.  Rules of Construction.  Unless the context otherwise
requires:


(a)   a term has the meaning assigned to it herein;


(b)   an accounting term not otherwise defined has
the meaning assigned to it in accordance with GAAP;


(c)   words in the singular include the plural, and
words in the plural include the singular;


(d)   provisions apply to successive events and
transactions;


(e)   the term “merger” includes a statutory share
exchange and the term “merged” has a correlative meaning;


(f)    the masculine gender includes the feminine
and the neuter;


(g)   references to agreements and other
instruments include subsequent amendments thereto;



 15
 









(h)   references to “interest” include Additional
Interest, without duplication;


(i)    “herein,” “hereof,” “hereunder,”
“hereinafter” and other words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other subdivision;


(j)    unless context otherwise requires, any
reference to an “Article” or a “Section” refers to an Article or Section,
as the case may be, of this Indenture;


(k)   “or” is not exclusive; and


(l)    “including” means including without
limitation.


ARTICLE 2

THE SECURITIES


Section 2.01.  Form and Dating.  (a) The Securities and the corresponding
Trustee’s certificate of authentication shall be substantially in the
respective forms set forth in Exhibit A, which Exhibit is
incorporated in and made part of this Indenture.  The Securities may have notations, legends or
endorsements required by law, exchange rule, Applicable Procedures or
usage.  The Company shall provide any
such notations, legends or endorsements to the Trustee in writing.  Each Security shall be dated the date of its
authentication.


The
terms and provisions contained in the Securities shall constitute, and are
hereby expressly made, a part of this Indenture and the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby; provided,
however, to the extent permitted by
applicable law, if any provision of any Security conflicts with the express
provisions of this Indenture, the provisions of this Indenture shall govern and
be controlling.


(b)   Restricted Global Securities.  All of the Securities shall be issued
initially in the form of one or more Restricted Global Securities, which shall
be deposited on behalf of the purchasers of the Securities represented thereby
with the Securities Custodian, as custodian for the depositary, The Depository
Trust Company (such depositary, or any successor thereto, being hereinafter referred
to as the “Depositary”), and registered in
the name of its nominee, Cede & Co., or as otherwise instructed by the
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided.  The aggregate
principal amount of the Restricted Global Securities may from time to time be
increased or decreased by adjustments made on the records of the Securities
Custodian and the Depositary as hereinafter provided, subject in each case to
compliance with the Applicable Procedures and the provisions of this Indenture.


(c)   Global Securities In General.  Each Global Security shall represent such of
the outstanding Securities as shall be specified therein and each shall provide
that it shall represent the aggregate amount of outstanding Securities from
time to time endorsed thereon and that the aggregate amount of outstanding
Securities represented thereby may from time to time be reduced or increased,
as appropriate, to reflect exchanges, purchases or conversions of such
Securities, in each case in accordance with this Indenture.  Any adjustment of the aggregate principal
amount of a Global Security to reflect the amount of any increase or decrease
in the amount of outstanding Securities represented thereby shall be made by
the Trustee in accordance with instructions given by the Holder thereof as
required by Section 2.12 hereof, or otherwise in accordance with this
Indenture, and shall be made on the records of the Trustee and the Depositary.



 16
 









The
Company shall issue and the Trustee shall, upon receipt of a Company Order,
authenticate and deliver in accordance with Section 2.02, initially one or more
Global Securities that (i) shall be registered in the name of
Cede & Co. or as otherwise instructed by the Depositary, (ii) shall
be delivered by the Trustee to the Depositary or to the Securities Custodian
pursuant to the Depositary’s instructions and (iii) shall bear legends
required for Global Securities as set forth in Exhibit A hereto.


(d)   Book Entry Provisions.  Members of, or participants in, the
Depositary (“Agent Members”) shall have no
rights under this Indenture with respect to any Global Security held on their
behalf by the Depositary or under the Global Security, and the Depositary
(including, for this purpose, its nominee) may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner and
Holder of such Global Security for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein
shall (i) prevent the Company, the Trustee or any agent of the Company or
the Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary, or such nominee, as the case may be,
or (ii) impair, as between the Depositary and its Agent Members, the Applicable
Procedures or the operation of customary practices governing the exercise of
the rights of a Holder of any Security.


None
of the Company, the Trustee, the Registrar, any Paying Agent or any agent of
any of them shall have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in the Securities, for maintaining, supervising or reviewing any
records relating to such beneficial owner interests, or for any acts or omissions
of a Depositary or for any transactions between a Depositary and any beneficial
owner or between or among beneficial owners. 
No owner of a beneficial interest in the Securities shall have any
rights under this Indenture, and the Depositary or its nominee, if any, shall
be deemed and treated by the Company, the Trustee, the Registrar, any Paying
Agent or any agent of any of them as the absolute owner and holder of such
Securities for all purposes whatsoever. 
Notwithstanding the foregoing, nothing herein shall prevent the Company,
the Trustee, the Registrar, any Paying Agent or any agent of any of them from
giving effect to any written certification, proxy or other authorization
furnished by a Depositary, or any of its members and any other Person on whose behalf
such member may act.


(e)   Certificated Securities.  Certificated Securities shall be issued only
under the circumstances provided in Section 2.12(a)(i).


Section 2.02.  Execution and
Authentication.  (a) A
duly authorized Officer of the Company shall sign the Securities for the
Company by manual or facsimile signature.


(b)   If an Officer of the Company whose signature
is on a Security no longer holds that office at the time the Trustee
authenticates the Security, the Security shall be valid nevertheless.


(c)   A Security shall not be valid until an
authorized signatory of the Trustee manually signs the certificate of
authentication on the Security.  The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.


(d)   The Trustee shall initially authenticate and
make available for delivery Securities for original issue in the aggregate
principal amount of up to $95,000,000 upon receipt of a written order or orders
of the Company signed by an Officer of the Company (a “Company
Order”), stating the CUSIP number, principal amount and date of
authentication for each such Security.


(e)   The Trustee shall act as the initial
authenticating agent.  Thereafter, the
Trustee may appoint an authenticating agent acceptable to the Company to
authenticate Securities.  An
authenticating agent may authenticate Securities whenever the Trustee may do
so.  Each reference in this Indenture to 



 17
 









authentication by the Trustee includes authentication
by such agent.  An authenticating agent
shall have the same rights as an Agent to deal with the Company or an Affiliate
of the Company.


The
Securities shall be issuable only in registered form without coupons and only
in denominations of $1,000 principal amount and any integral multiple thereof.


Section 2.03.  Registrar, Paying Agent and
Conversion Agent.  The Company
shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange (the “Registrar”),
an office or agency in the United States where Securities may be presented for
purchase or payment (the “Paying Agent”),
an office or agency where Securities may be presented for conversion (the “Conversion Agent”), and an office or agency where notices
and demands to or upon the Company in respect of the Securities and this
Indenture may be served.  The Registrar
shall keep a register of the Securities (the “Register”)
and of their transfer and exchange.


The
Company may have one or more co-registrars, one or more additional paying
agents, and one or more additional conversion agents.  The term “Registrar” includes any
co-registrar, including any named pursuant to Section 5.06.  The term “Paying Agent” includes any
additional paying agent, including any named pursuant to Section 5.06.  The term “Conversion Agent” includes any
additional conversion agent, including any named pursuant to Section 5.06.


The
Company shall enter into an appropriate agency agreement with any Agent not a
party to this Indenture.  The agreement
shall implement the provisions of this Indenture that relate to such
Agent.  The Company shall notify the
Trustee of the name and address of any Agent not a party to this
Indenture.  If the Company fails to
maintain a Registrar, Paying Agent or Conversion Agent or agent for service of
notices and demands in any place required by this Indenture, or fails to give
the foregoing notice, the Trustee shall act as such.  The Company or any Affiliate of the Company
may act as the Paying Agent.


The
Company hereby initially appoints the Trustee as the Registrar, Paying Agent
and Conversion Agent in connection with the Securities.


Section 2.04.  Paying Agent to Hold Money and
Securities in Trust.  Prior to
11:00 a.m., New York City time, on each due date of payments in
respect of, or delivery of Cash or shares of Common Stock, as applicable and as
provided herein, the Company shall deposit with the Paying Agent Cash (in
immediately available funds if deposited on the due date) or with the
Conversion Agent such number of shares of Common Stock or other consideration
sufficient to make such payments or deliveries when so becoming due.  The Company shall require each Paying Agent
or Conversion Agent, as applicable (other than the Trustee), to agree in
writing that such Agent shall hold in trust for the benefit of Holders or the
Trustee all Cash, Common Stock or other consideration, as applicable, held by
such Agent for the making of payments or deliveries in respect of the
Securities and shall notify the Trustee in writing of any default by the
Company in making any such payment or delivery. 
If the Company or an Affiliate of the Company acts as the Paying Agent
or Conversion Agent, as applicable, it shall segregate the Cash, Common Stock
and other consideration, as applicable, held by it as the Paying Agent or Conversion
Agent, as applicable, and hold it as a separate trust fund.


The
Company at any time may require a Paying Agent or Conversion Agent, as
applicable, to pay all Cash, Common Stock or other consideration, as
applicable, held by it to the Trustee, and the Trustee may at any time during
the continuance of any Default, upon written request to the Paying Agent or the
Conversion Agent, as applicable, require such Paying Agent or Conversion Agent,
as applicable, to pay forthwith to the Trustee all Cash, Common Stock or other
consideration, as applicable, so held in trust by such Paying Agent or
Conversion Agent.  Upon doing so, the
Paying Agent or the Conversion Agent, as 



 18
 









applicable, shall have no further liability for such
Cash, Common Stock or other consideration, as applicable.


Section 2.05.  Holder Lists.  The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of the Holders. 
If the Trustee is not the Registrar, the Company shall furnish to the
Trustee on or before each Interest Payment Date, and at such other times as the
Trustee may request in writing, a list of the names and addresses of the
Holders in such form and as of such date as the Trustee may reasonably request.


Section 2.06.  Transfer and Exchange.  (a) Subject to compliance
with any applicable additional requirements contained in Section 2.12, when a
Security is presented to a Registrar with a request to register a transfer
thereof or to exchange such Security for an equal principal amount of
Securities of other authorized denominations, the Registrar shall register the
transfer or make the exchange as requested; provided, however, that every Security presented or surrendered for
registration of transfer or exchange shall, if such Security is a Certificated
Security, be duly endorsed or accompanied by an assignment form, in the form
included in Exhibit A attached hereto and, if applicable, a transfer
certificate, in the form included in Exhibit A attached hereto, and in
form reasonably satisfactory to the Registrar duly executed by the Holder
thereof or its attorney duly authorized in writing.  To permit registration of transfers and
exchanges, upon surrender of any Security for registration of transfer or
exchange at an office or agency maintained pursuant to Section 2.03, the
Company shall execute and the Trustee shall, upon receipt of a Company Order,
authenticate Securities of a like aggregate principal amount at the Registrar’s
request.  Any exchange or transfer shall
be without charge, except that the Company or the Registrar may require payment
of a sum sufficient to cover any tax, assessment or other governmental charge
that may be imposed in relation thereto, other than exchanges pursuant to
Section 2.10, Section 11.05, Article 3 or Article 4, in each case, not
involving any transfer.


Neither
the Company, any Registrar nor the Trustee shall be required to exchange or
register a transfer of any Securities or portions thereof in respect of which a
Fundamental Change Purchase Notice has been delivered and not validly withdrawn
by the Holder thereof (except, in the case of the purchase of a Security in
part, the portion thereof not to be purchased).


All
Securities issued upon any transfer or exchange of Securities shall be valid
obligations of the Company, evidencing the same debt and entitled to the same
benefits under this Indenture as the Securities surrendered upon such transfer
or exchange.


(b)   Any Registrar appointed pursuant to Section
2.03 or Section 5.06 hereof shall provide to the Trustee such information as
the Trustee may reasonably request in connection with the delivery by such
Registrar of Securities upon transfer or exchange of Securities.


The
Trustee shall have no obligation or duty to monitor, determine or inquire as to
compliance with any restrictions on transfer imposed under this Indenture or
under applicable law with respect to any transfer of any interest in any
Security (including any transfers between or among Agent Members or other beneficial
owners of interests in any Global Security) other than to require delivery of
such opinions of counsel, certificates and other documentation or evidence as
are expressly required by, and to do so if and when expressly required by the
terms of, this Indenture (including if so requested by the Company exercising a
right to require the delivery of such items), and to examine the same to
determine substantial compliance as to form with the express requirements
hereof.


Any
Holder of a Global Security shall, by acceptance of such Global Security, agree
that transfers of beneficial interests in such Global Security may be effected
only through a book-entry system 



 19
 









maintained by the Depositary (or its agent), and that
ownership of a beneficial interest in a Global Security shall be required to be
reflected in a book-entry system.


Section 2.07.  Replacement Securities.  If (a) any mutilated security
is surrendered to the Company, a Registrar or the Trustee, or (b) the
Company, the Registrar and the Trustee receive evidence to their satisfaction
of the destruction, loss or theft of any Security, and, in either case, there
is delivered to the Company, the Registrar and the Trustee such security or
indemnity bond as shall be reasonably required by them to save each of them
harmless from any loss, liability and expense that any of them may suffer or
Incur if a Security is replaced and subsequently presented or claimed for
payment, then, in the absence of notice to the Company, such Registrar or the
Trustee that such Security has been acquired by a bona fide or protected
purchaser, the Company shall issue, and the Trustee shall, upon receipt of a
Company Order (which the Company agrees to deliver promptly), authenticate and
deliver, in exchange for any such mutilated Security or in lieu of any such
destroyed, lost or stolen Security, a new Security of like tenor and principal
amount, bearing a number not contemporaneously outstanding.


In
case any such mutilated, destroyed, lost or stolen Security has become or is
about to become due and payable, or purchased by the Company pursuant to
Article 3, the Company in its discretion may, instead of issuing a new
Security, pay or purchase such Security, as the case may be, in accordance
herewith.


Upon
the issuance of any new Securities under this Section 2.07, the Company may
require the payment of a sum sufficient to cover any tax, assessment or other
governmental charge that may be imposed in relation thereto and any other
reasonable expenses (including the reasonable fees and expenses of the Trustee
or the Registrar) in connection therewith.


Every
new Security issued pursuant to this Section 2.07 in lieu of any mutilated,
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the mutilated, destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall
be entitled to all benefits of this Indenture equally and proportionately with
any and all other Securities duly issued and outstanding hereunder.


The
provisions of this Section 2.07 are (to the extent lawful) exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.


Section 2.08.  Outstanding Securities.  Securities outstanding at any time
are all Securities authenticated by the Trustee, except for those canceled by
it, those paid or repurchased pursuant to Section 2.07, those delivered to it
for cancellation and those described in this Section 2.08 as not outstanding.


If
a Security is replaced pursuant to Section 2.07 (other than a mutilated
Security surrendered for replacement), it ceases to be outstanding unless the
Trustee receives, subsequent to the new Security’s authentication, proof
satisfactory to the Company that the replaced Security is held by a bona fide
or protected purchaser.  A mutilated
Security ceases to be outstanding upon surrender and replacement thereof
pursuant to Section 2.07.


If the Paying Agent holds, in accordance with the
terms of this Indenture, prior to 11:00 a.m., New York City time, on the
Maturity Date, on a Redemption Date or on a Fundamental Change Purchase Date,
as the case may be, Cash sufficient to pay all Securities then payable, then on
and after such Maturity Date, Fundamental Change Purchase Date or Redemption
Date, as the case may be, such Securities shall cease to be outstanding and
interest on such Securities shall cease to accrue.



 20















If
a Security is converted in accordance with Article 4, then on the Conversion
Date, such Security shall cease to be outstanding and interest on such Security
shall cease to accrue, unless there shall be a default in the delivery of the
consideration payable hereunder upon such conversion.


Subject
to the restrictions contained in Section 2.09, a Security does not cease to be
outstanding solely because the Company or an Affiliate of the Company holds the
Security.


Section 2.09.  Treasury Securities.  In determining whether the Holders
of the required principal amount of Securities have given or concurred in any
notice, request, demand, authorization, direction, waiver or consent,
Securities owned by the Company or any other obligor on the Securities or by any
Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be outstanding for such purposes, except that, for purposes of
determining whether the Trustee shall be protected in relying on any such
notice, request, demand, authorization, direction, waiver or consent, only
Securities which a Trust Officer actually knows are so owned shall be so
disregarded.  Securities so owned which
have been pledged in good faith shall not be disregarded if the pledgee
establishes to the satisfaction of the Trustee the pledgee’s right so to act
with respect to the Securities and that the pledgee is not, and is not acting
on the behalf of, the Company or any other obligor on the Securities or any
Affiliate of the Company or of such other obligor.  If requested by the Trustee, the Company
agrees to notify the Trustee in writing of the existence of any such Treasury
Securities or Securities owned by the Company, any other obligor on the
Securities, or, to the knowledge of the Company, any Affiliate of the Company.


Section 2.10.  Temporary Securities.  Until definitive Securities are
ready for delivery, the Company may prepare and execute, and, upon receipt of a
Company Order, the Trustee shall authenticate and deliver, temporary
Securities.  Temporary Securities shall
be substantially in the form of definitive Securities but may have variations
that the Company reasonably considers appropriate for temporary
Securities.  After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 2.03,
without charge to the Holder.  Upon surrender
for cancellation of any one or more temporary Securities, the Company shall
execute and the Trustee shall, upon receipt of a Company Order (which the
Company agrees to deliver promptly), authenticate and deliver in exchange
therefor a like principal amount of definitive Securities of authorized
denominations.  Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.


Section 2.11.  Cancellation.  The Company at any time may
deliver Securities to the Trustee for cancellation.  The Registrar, the Paying Agent and the
Conversion Agent shall forward to the Trustee or its agent any Securities
surrendered to them for transfer, exchange, payment or conversion.  The Trustee and no one else shall cancel, in
accordance with its standard procedures, all Securities surrendered for
transfer, exchange, payment, conversion or cancellation and shall deliver the
canceled Securities to the Company.  The
Company may not issue new Securities to replace Securities that it has paid or
delivered to the Trustee for cancellation or that any Holder has converted
pursuant to Article 4.


All
Securities that are purchased pursuant to Article 3 or otherwise acquired by
the Company shall be delivered to the Trustee for cancellation.  If the Company shall acquire any of the
Securities, such acquisition shall not operate as a repurchase or satisfaction
of the indebtedness represented by such Securities unless and until the same
are delivered to the Trustee for cancellation.


Section 2.12.  Legend; Additional Transfer
and Exchange Requirements. (a)  Transfer
and Exchange of Global Securities.



 21
 









(i)    Certificated Securities shall be issued in
exchange for interests in the Global Securities only (x) if the Depositary
notifies the Company that it is unwilling or unable to continue as Depositary
for the Global Securities or if it at any time ceases to be a “clearing agency”
registered under the Exchange Act, if so required by applicable law or
regulation, and a successor Depositary is not appointed by the Company within
90 calendar days of such notice or (y) if an Event of Default has occurred
and is continuing, each of clauses (x) and (y) in accordance
with the Applicable Procedures.  In any such
case, the Company shall execute, and the Trustee shall, upon receipt of a
Company Order (which the Company agrees to deliver promptly), authenticate and
deliver Certificated Securities in an aggregate principal amount equal to the
principal amount of such Global Securities in exchange therefor.  Only Restricted Certificated Securities shall
be issued in exchange for beneficial interests in Restricted Global Securities,
and only Unrestricted Certificated Securities shall be issued in exchange for
beneficial interests in Unrestricted Global Securities.  Certificated Securities issued in exchange
for beneficial interests in Global Securities shall be registered in such names
and shall be in such authorized denominations as the Depositary, pursuant to
instructions from its Agent Members or otherwise in accordance with the
Applicable Procedures, shall instruct the Trustee.  The Trustee shall deliver or cause to be
delivered such Certificated Securities to the Persons in whose name such
Securities are so registered.  Such
exchange shall be effected in accordance with the Applicable Procedures.  In the event that the Certificated Securities
are not issued to each such beneficial owner promptly after the Registrar has
received a request from the Depositary to issue such Certificated Securities,
the Company expressly acknowledges, with respect to the right of any Holder to
pursue a remedy pursuant to Section 8.06 or 8.07 hereof, the right of any
beneficial holder of Securities to pursue such remedy with respect to the
portion of the Global Security that represents such Beneficial Owner’s
Securities as if such Certificated Securities had been issued.


(ii)   Notwithstanding any other provisions of this
Indenture other than the provisions set forth in Section 2.12(a)(i), a Global
Security may not be transferred except as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary or by the Depositary or any such nominee
to a successor Depositary or a nominee of such successor Depositary.


(b)   Transfer and Exchange of Certificated
Securities.  In the event that
Certificated Securities are issued in exchange for beneficial interests in
Global Securities in accordance with Section 2.12(a)(i), and, on or after such
event, Certificated Securities are presented by a Holder to the Registrar with
a request:


(x)            to
register the transfer of the Certificated Securities to a person who shall take
delivery thereof in the form of Certificated Securities only; or


(y)           to
exchange such Certificated Securities for an equal principal amount of
Certificated Securities of other authorized denominations,


such Registrar shall register the transfer or make the
exchange as requested; provided, however,
that the Certificated Securities presented or surrendered for register of transfer
or exchange:


(i)    shall be duly endorsed or accompanied by a
written instrument of transfer in accordance with the proviso to the first
sentence of Section 2.06(a); and


(ii)   in the case of a Restricted Certificated
Security, such request shall be accompanied by the following additional
information and documents, as applicable:



 22
 









(A)  if such Restricted
Certificated Security is being delivered to the Registrar by a Holder for
registration in the name of such Holder, without transfer, or such Restricted
Certificated Security is being transferred to the Company or a Subsidiary of
the Company, a certification to that effect from such Holder (in substantially
the form set forth in Exhibit A);


(B)   if such Restricted
Certificated Security is being transferred to a person the Holder reasonably
believes is a QIB in accordance with Rule 144A, or pursuant to an
effective registration statement under the Securities Act or in compliance with
Regulation S under the Securities Act, a certification to that effect from
such Holder (in substantially the form set forth in Exhibit A); or


(C)   if such Restricted
Certificated Security is being transferred pursuant to an exemption from the
registration requirements of the Securities Act in accordance with
Rule 144 or pursuant to and in compliance with another exemption from the
registration requirements under the Securities Act, a certification to that
effect from the Holder (in substantially the form set forth in Exhibit A)
and, if the Company or the Registrar so requests, an Opinion of Counsel,
certificates and other information reasonably acceptable to the Company to the
effect that such transfer does not require registration under the Securities
Act.


(c)   Transfer of a Beneficial Interest in a
Restricted Global Security for a Beneficial Interest in an Unrestricted Global
Security.  Any person having a
beneficial interest in a Restricted Global Security may upon request, subject
to the Applicable Procedures, transfer such beneficial interest to a Person who
is required or permitted to take delivery thereof in the form of a beneficial
interest in an Unrestricted Global Security. 
Upon receipt by the Trustee of written instructions, or such other form
of instructions as is customary for the Depositary, from the Depositary or its
nominee on behalf of any Person having a beneficial interest in a Restricted
Global Security and the following additional information and documents in such
form as is customary for the Depositary from the Depositary or its nominee on
behalf of the Person having such beneficial interest in the Restricted Global
Security (all of which may be submitted by facsimile or electronically):


(i)    if such beneficial interest is being
transferred pursuant to an effective registration statement under the
Securities Act, a certification to that effect from the Holder (in
substantially the form set forth in Exhibit A); or


(ii)   if such beneficial interest is being
transferred pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144, a certification to that effect
from the Holder (in substantially the form set forth in Exhibit A) and, if
the Company or the Trustee so requests, an Opinion of Counsel, certificates and
other information reasonably acceptable to the Company to the effect that such
transfer does not require registration under the Securities Act;


the Registrar shall reduce or cause to be reduced the
aggregate principal amount of the Restricted Global Security by the appropriate
principal amount and shall increase or cause to be increased the aggregate
principal amount of the Unrestricted Global Security by a like principal
amount.  Such transfer shall otherwise be
effected in accordance with the Applicable Procedures.  If no Unrestricted Global Security is then
outstanding, the Company shall execute and the Trustee shall, upon receipt of a
Company Order (which the Company agrees to deliver promptly), authenticate and
deliver an Unrestricted Global Security.



 23
 









(d)   Transfer of a Beneficial Interest in an
Unrestricted Global Security for a Beneficial Interest in a Restricted Global
Security.  Any person having a
beneficial interest in an Unrestricted Global Security may upon request,
subject to the Applicable Procedures, transfer such beneficial interest to a
person who is required or permitted to take delivery thereof in the form of a
beneficial interest in a Restricted Global Security.  Upon receipt by the Trustee of written
instructions, or such other form of instructions as is customary for the
Depositary, from the Depositary or its nominee on behalf of any person having a
beneficial interest in an Unrestricted Global Security and the following
additional information and documents in such form as is customary for the
Depositary, from the Depositary or its nominee on behalf of the person having
such beneficial interest in the Unrestricted Global Security (all of which may
be submitted by facsimile or electronically):


(i)    a certification from the Holder (in
substantially the form set forth in Exhibit A) to the effect that such
beneficial interest is being transferred to a person that the transferor
reasonably believes is a QIB in accordance with Rule 144A;


(ii)   a certification from the Holder (in
substantially the form set forth in Exhibit A) to the effect that such
beneficial interest is being transferred in compliance with Regulation S
under the Securities Act;


(iii)  if such beneficial interest in such
Unrestricted Global Security is being transferred in compliance with any other
exemption from registration under the Securities Act, certification to that
effect from such Holder (in substantially the form set forth in Exhibit A)
and if the Company or the Trustee so requests, an Opinion of Counsel,
certificates and other information reasonably acceptable to the Company to the
effect that such transfer does not require registration under the Securities
Act; or


(iv)  a certification (in substantially the form set
forth in Exhibit A) to the effect that such beneficial interest is being
transferred to the Company or a Subsidiary of the Company,


the Registrar shall reduce or cause to be reduced the
aggregate principal amount of the Unrestricted Global Security by the
appropriate principal amount and shall increase or cause to be increased the
aggregate principal amount of the Restricted Global Security by a like
principal amount.  Such transfer shall
otherwise be effected in accordance with the Applicable Procedures.  If no Restricted Global Security is then outstanding,
the Company shall execute and the Trustee shall, upon receipt of a Company
Order (which the Company agrees to deliver promptly), authenticate and deliver
a Restricted Global Security.


(e)   Transfers of Certificated Securities for
Beneficial Interest in Global Securities. 
In the event that Certificated Securities are issued in exchange for
beneficial interests in Global Securities and, thereafter, the events or
conditions specified in Section 2.12(a)(i) which required such exchange shall
cease to exist, the Company shall mail notice to the Trustee and to the Holders
(i) stating that Holders may exchange Certificated Securities for
interests in Global Securities by complying with the procedures set forth in
this Indenture and (ii) briefly describing such procedures and the events
or circumstances requiring that such notice be given.  Thereafter, if Certificated Securities are
presented by a Holder to a Registrar with a request:


(x)            to
register the transfer of such Certificated Securities to a Person who will take
delivery thereof in the form of a beneficial interest in a Global Security,
which request shall specify whether such Global Security will be a Restricted
Global Security or an Unrestricted Global Security; or



 24
 









(y)           to
exchange such Certificated Securities for an equal principal amount of
beneficial interests in a Global Security, which beneficial interests will be
owned by the Holder transferring such Certificated Securities (provided that in the case of such an exchange, Restricted
Certificated Securities may be exchanged only for Restricted Global Securities
and Unrestricted Certificated Securities may be exchanged only for Unrestricted
Global Securities),


the Registrar shall register the transfer or make the
exchange as requested by canceling such Certificated Security and causing the
aggregate principal amount of the applicable Global Security to be increased
accordingly and, if no such Global Security is then outstanding, the Company
shall issue and the Trustee shall, upon receipt of a Company Order (which the
Company agrees to deliver promptly) authenticate and deliver a new Global
Security; provided, however,
that the Certificated Securities presented or surrendered for registration of
transfer or exchange:


(i)    shall be duly endorsed or accompanied by a
written instrument of transfer in accordance with the proviso to the first
sentence of Section 2.06(a);


(ii)   in the case of a Restricted Certificated
Security to be transferred for a beneficial interest in an Unrestricted Global
Security, such request shall be accompanied by the following additional
information and documents, as applicable:


(A)  if such Restricted Certificated Security is
being transferred pursuant to an effective registration statement under the
Securities Act, a certification to that effect from such Holder (in
substantially the form set forth in Exhibit A); or


(B)   if such Restricted Certificated Security is
being transferred pursuant to an exemption from the registration requirements
of the Securities Act in accordance with Rule 144, a certification to that
effect from such Holder (in substantially the form set forth in Exhibit A)
and an Opinion of Counsel, certificates and other information reasonably
acceptable to the Company to the effect that such transfer does not require
registration under of the Securities Act;


(iii)  in the case of a Restricted Certificated
Security to be transferred to another person for a beneficial interest in a
Restricted Global Security, such request shall be accompanied by, if such
Restricted Certificated Security is being transferred to a person the Holder
reasonably believes is a QIB in accordance with Rule 144A, a certification to
that effect from such Holder (in substantially the form set forth in Exhibit
A).


(iv)  in the case of an Unrestricted Certificated
Security to be transferred or exchanged for a beneficial interest in an
Unrestricted Global Security, or in the case of a Restricted Certificated
Security to be exchanged (and not transferred) for a beneficial interest in a
Restricted Global Security, such request need not be accompanied by any
additional information or documents; and


(v)   in the case of an Unrestricted Certificated
Security to be transferred or exchanged for a beneficial interest in a
Restricted Global Security, such request shall be accompanied by the following
additional information and documents, as applicable:


(A)  if such Unrestricted Certificated Security is
being transferred to a person the Holder reasonably believes is a QIB (which,
in the case of an exchange, shall be such Holder) in accordance with
Rule 144A, a certification to that effect from such Holder (in
substantially the form set forth in Exhibit A);



 25
 









(B)   if such Unrestricted Certificated Security is
being transferred in compliance with any other exemption from registration
under the Securities Act, certification to that effect from such Holder (in
substantially the form set forth in Exhibit A) and an Opinion of Counsel,
certificates and other information reasonably acceptable to the Company to the
effect that such transfer does not require registration under the Securities
Act; or


(C)   if such Unrestricted Certificated Security is
being transferred to the Company or a Subsidiary of the Company, a
certification to that effect from such Holder (in substantially the form set
forth in Exhibit A).


(f)    Legends.  (i) Except as permitted by the following
paragraphs (ii), (iii) and (iv), each Global Security and Certificated
Security (and all Securities issued in exchange therefor or upon registration
of transfer or replacement thereof) shall bear a legend (the “Restricted Legend”) in substantially the following form, for
so long as it is required by this Indenture to bear such legend:


THIS SECURITY (OR ITS
PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON CONVERSION HEREOF
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.  EACH PURCHASER OF THIS SECURITY IS HEREBY
NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.


THE HOLDER OF THIS SECURITY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY AND THE COMMON
STOCK ISSUABLE UPON CONVERSION HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (III) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (III) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE. 
IN ANY CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE
IN ANY HEDGING TRANSACTIONS WITH REGARD TO THIS SECURITY EXCEPT AS PERMITTED
UNDER THE SECURITIES ACT.


THIS SECURITY IS BEING
ISSUED WITH ORIGINAL ISSUE DISCOUNT, FOR PURPOSES OF SECTIONS 1271, 1272, 1273
AND 1275 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND IS
SUBJECT TO THE CONTINGENT PAYMENT DEBT INSTRUMENT REGULATIONS OF TREASURY
REGULATION SECTION 1.1275-4.  THE ISSUE
PRICE OF THIS NOTE IS $1,000 PER NOTE WITH A PRINCIPAL AMOUNT OF $1,000 AT
MATURITY; THE ISSUE DATE IS JULY 30, 2007. 
THE COMPANY’S DETERMINATION OF THE COMPARABLE YIELD IS 



 26
 









4.89%
PER ANNUM, COMPOUNDED SEMIANNUALLY.  YOU
MAY OBTAIN THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE PRICE, YIELD TO
MATURITY, AND PROJECTED PAYMENT SCHEDULE FOR THE SECURITY BY SUBMITTING A
WRITTEN REQUEST TO THE COMPANY AT EVERGREEN ENERGY INC., ATTN: CHIEF FINANCIAL
OFFICER, 1225 17th STREET, SUITE 1300, DENVER, COLORADO 80202.


THE COMPANY ACKNOWLEDGES AND
AGREES, AND EACH HOLDER AND EACH BENEFICIAL OWNER OF THIS SECURITY, BY
PURCHASING OR HOLDING THIS SECURITY OR A BENEFICIAL INTEREST IN THIS SECURITY,
SHALL BE DEEMED TO ACKNOWLEDGE AND AGREE THAT (IN THE ABSENCE OF AN ADMINISTRATIVE
DETERMINATION OR JUDICIAL RULING TO THE CONTRARY) (I) EACH HOLDER AND EACH
BENEFICIAL OWNER OF THIS SECURITY SHALL BE BOUND BY THE COMPANY’S DETERMINATION
OF THE PROJECTED PAYMENT SCHEDULE AND COMPARABLE YIELD WITHIN THE MEANING OF
U.S. TREASURY REGULATION SECTION 1.275-4(B), (II) THE COMPARABLE YIELD MEANS
THE YIELD AT WHICH THE COMPANY WOULD ISSUE, AS OF THE ISSUE DATE, A FIXED RATE,
NONCONVERTIBLE DEBT INSTRUMENT WITH NO CONTINGENT PAYMENTS, BUT WITH TERMS AND
CONDITIONS OTHERWISE COMPARABLE TO THOSE OF THE SECURITIES, (III) THE COMPANY
HAS DETERMINED THAT THE COMPARABLE YIELD IS THE “APPLICABLE FEDERAL RATE”
PRESCRIBED BY THE TREASURY DEPARTMENT, (IV) THE FAIR MARKET VALUE OF COMMON
STOCK RECEIVED BY A HOLDER OR BENEFICIAL OWNER OF A SECURITY UPON CONVERSION OF
SUCH SECURITY SHALL BE TREATED AS A CONTINGENT PAYMENT UNDER U.S. TREASURY
REGULATION SECTION 1.1275-4(B), (V) THE AMOUNT OF ANY “COUPON MAKE-WHOLE
PAYMENT” RECEIVED BY A HOLDER OR BENEFICIAL OWNER OF A SECURITY SHALL BE
TREATED AS A CONTINGENT PAYMENT UNDER U.S. TREASURY REGULATION SECTION
1.1275-4(B), (VI) THE COMPARABLE YIELD AND THE PROJECTED PAYMENT SCHEDULE ARE
NOT DETERMINED FOR ANY PURPOSE OTHER THAN FOR THE PURPOSE OF APPLYING U.S.
TREASURY REGULATION SECTION 1.1275-4(B)(4) TO THE SECURITY, AND (VII) THE
COMPARABLE YIELD AND THE PROJECTED PAYMENT SCHEDULE DO NOT CONSTITUTE A
PROJECTION OR REPRESENTATION REGARDING THE ACTUAL AMOUNTS PAYABLE ON THE
SECURITY.


(ii)   Upon any sale or transfer of a Restricted
Security (x) after the expiration of the holding period applicable to
sales of the Securities under Rule 144(k) of the Securities Act,
(y) pursuant to Rule 144 or (z) pursuant to an effective
registration statement under the Securities Act:


(A)  in the case of any Restricted Certificated
Security, each Registrar shall permit the Holder thereof to transfer such
Restricted Certificated Security to a transferee who, unless such transferee is
an Affiliate of the Company, shall take such Security in the form of an
Unrestricted Certificated Security or (under the circumstances described in
Section 2.12(e)) an Unrestricted Global Security, and in each case shall
rescind any restriction on the transfer of such Security; provided,
however, that the Holder of such
Restricted Certificated Security shall, in connection with such exchange or
transfer, comply with the other applicable provisions of this Section 2.12; and


(B)   in the case of a Restricted Global Security,
each Registrar shall permit the Holder thereof to transfer such beneficial
interest in a Restricted Global Security to a transferee who, unless such
transferee is an Affiliate of the Company, shall take such 



 27
 









Security in the form of a
beneficial interest in an Unrestricted Global Security and shall rescind any
restriction on transfer of such Security; provided, however, that such Unrestricted Global Security shall
continue to be subject to the provisions of Section 2.12(a)(ii); and provided further, however, that
the owner of such beneficial interest shall, in connection with such transfer,
comply with the other applicable provisions of this Section 2.12.


If the Applicable Procedures so require, prior to the
removal of any restrictive legend at the end of the holding period applicable
to sales of the Securities under Rule 144(k) of the Securities Act, such
requesting Holder shall deliver an Opinion of Counsel in form reasonably
acceptable to the Company to the effect that the restrictions on transfer
contained herein and the restrictive legend are no longer required in order to
maintain compliance with the Securities Act.


(iii)  Upon the exchange, registration of transfer or
replacement of Securities not bearing the Restricted Legend, the Company shall
issue, and the Trustee shall, upon receipt of a Company Order (which the
Company agrees to deliver promptly), authenticate and deliver, Securities that
do not bear such Restricted Legend.


(iv)  After the expiration of the holding period
pursuant to Rule 144(k) of the Securities Act, the Company may with the
consent of any Holder of a Restricted Global Security or a Restricted
Certificated Security that is not an Affiliate of the Company, remove any
restriction of transfer on such Security, and the Company shall issue, and the
Trustee shall, upon receipt of a Company Order (which the Company agrees to
deliver promptly), authenticate and deliver Securities that do not bear the
Restricted Legend.


(v)   Until the expiration of the holding period
applicable to sales of the Securities under Rule 144(k) of the Securities
Act or a transfer pursuant to Rule 144 or pursuant to an effective
registration statement under the Securities Act, the shares of Common Stock
issued upon conversion of the Securities shall bear a legend substantially to
the same effect as the Restricted Legend; provided that
all Securities held by Affiliates of the Company shall bear the Restricted
Legend at all times.


(g)   Transfers to the Company.  Nothing contained in this Indenture or in the
Securities shall prohibit the sale or other transfer of any Securities
(including beneficial interests in Global Securities) to the Company, or any of
its Subsidiaries or any of its Affiliates.


Section 2.13.  CUSIP Numbers.  The Company in issuing the
Securities may use one or more “CUSIP,” “ISIN” or other similar numbers (if
then generally in use), and, if so, the Trustee shall use “CUSIP,” “ISIN” or
other similar numbers in notices of purchase as a convenience to Holders; provided, however, that
any such notice may state that no representation is made as to the correctness
of such numbers either as printed on the Securities or as contained in any
notice of a purchase and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such purchase shall
not be affected by any defect in or omission of such numbers.  The Company shall promptly notify the Trustee
of any change in the “CUSIP,” “ISIN” or other similar numbers.


Section 2.14.  Persons Deemed Owners.  Prior to due presentment of a
Security for registration of transfer, the Company, the Trustee and any agent
of the Company or the Trustee may treat the person in whose name such Security
is registered, which shall initially be the Depositary, as the owner of such
Security for the purpose of receiving payment of principal of, redemption
price, Fundamental Change Purchase Price and interest on the Security, for the
purpose of receiving Common Stock or Cash and for all other purposes, including
without limitation, for purposes of giving notices hereunder, whatsoever, 



 28
 









whether or not such Security is overdue, and none of
the Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.  The
registered Holder of a Global Security may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action that a Holder is entitled
to take under this Indenture or the Securities.


Section 2.15.  Defaulted Interest.  If the Company defaults on a
payment of interest on the Securities, it shall pay the defaulted interest,
plus (to the extent permitted by law) any interest payable on the defaulted
interest, in accordance with the terms hereof, to the Persons who are Holders
on a subsequent special record date, which date shall be at least five Business
Days prior to the payment date.  The
Company shall fix such special record date and payment date in a reasonable
manner.  At least 10 calendar days before
such special record date, the Company shall mail to each Holder a notice that
states the special record date, the payment date and the amount of defaulted
interest, and interest payable on defaulted interest, if any, to be paid.  The Company may make payment of any defaulted
interest in any other lawful manner not inconsistent with the requirements (if
applicable) of any securities exchange on which the Securities may be listed
and, upon such notice as may be required by such exchange.


Section 2.16.  Tax Treatment.  Solely for purposes of applying U.S. Treasury
Regulation section 1.1275-4 to the Securities:


(a)   for United States federal income tax
purposes, ordinary interest income shall accrue with respect to the Securities
as tax original issue discount according to the “noncontingent bond method,” as
set forth in U.S. Treasury Regulation section 1.1275-4(b) using a comparable
yield of 4.89%, compounded semiannually;


(b)   the Company acknowledges and agrees, and each
Holder and each beneficial owner of a Security, by purchasing or holding a
Security or beneficial interest in a Security, shall be deemed to acknowledge
and agree that (in the absence of an administrative determination or judicial
ruling to the contrary):


(i)    each Holder and each beneficial owner of a
Security shall be bound by the Company’s determination of the projected payment
schedule and comparable yield within the meaning of U.S. Treasury Regulation
Section 1.275-4(b),


(ii)   the comparable yield means the yield at which
the Company would issue, as of the Issue Date, a fixed rate, nonconvertible
debt instrument with no contingent payments, but with terms and conditions
otherwise comparable to those of the Securities,


(iii)  the Company has determined that the comparable
yield is the “applicable Federal Rate” prescribed by the Treasury Department,


(iv)  the fair market value of Common Stock received
by a Holder or beneficial owner of a Security upon conversion of such Security
shall be treated as a contingent payment under U.S. Treasury Regulation section
1.1275-4(b),


(v)   the amount of any “Coupon Make-Whole Payment”
received by a Holder or beneficial owner of a Security shall be treated as a
contingent payment under U.S. Treasury Regulation Section 1.1275-4(b),



 29
 









(vi)  the comparable yield and the projected payment
schedule are not determined for any purpose other than for the purpose of
applying U.S. Treasury Regulation section 1.1275-4(b)(4) to the Security, and


(vii) the comparable yield and the projected payment
schedule do not constitute a projection or representation regarding the actual
amounts payable on the Security.


The
Holders of the Securities may obtain the amount of original issue discount,
issue price, yield to maturity, and projected payment schedule for the Security
by submitting written requests to the Company at Evergreen Energy Inc., Attn:
Chief Financial Officer, 1225 17th Street, Suite 1300, Denver, Colorado 80202.


ARTICLE 3

REDEMPTION; REPURCHASE OF SECURITIES AT OPTION OF HOLDERS


Section 3.01.  Provisional Redemption.  At any time and from time to time,
the Company may redeem the Securities, in whole or in part, at a redemption
price payable in Cash equal to 100% of the principal amount of the Securities
to be redeemed, plus any accrued and unpaid interest to, but not including, the
Redemption Date, and the Coupon Make-Whole Payment, if:


(a)   the Closing Price of the Common Stock for at
least 20 Trading Days in any 30 consecutive Trading Day period is at least 130%
of the Applicable Conversion Price per share; and


(b)   the shelf registration statement covering
resales of the Securities and the Common Stock issuable upon conversion of the
Securities is effective and available for use pursuant to the terms of the
Registration Rights Agreement and is expected to remain effective and available
for use for the 30 calendar days following the Redemption Date, unless
registration is no longer required.


As
set forth in Section 4.02 below, the Company shall pay the Coupon Make-Whole
Payment on all Securities converted after the date that the Company mails the
Redemption Notice.  In no event will the
Coupon Make-Whole Payment for Securities be reduced by accrued and unpaid
interest.


Section 3.02.  Redemption Procedures.


(a)   The Company shall give at least 20 calendar
days’ but not more than 60 calendar days’ notice of redemption by mail to
Holders (the “Redemption Notice”). The
Redemption Notice shall identify the Securities to be redeemed and shall state:


(i)    the Redemption Date;


(ii)   the redemption price;


(iii)  the name and address of the Paying Agent;


(iv)  that the Securities called for redemption must
be surrendered to the Paying Agent to collect the redemption price;


(v)   that interest on the Securities called for
redemption ceases to accrue on and after the Redemption Date; and



 30















(vi)  that Securities called for redemption may only
be converted until the Close of Business on the Business Day immediately
preceding the Redemption Date;


provided, that at the Company’s
request provided to the Trustee at least 25 calendar days prior to the
Redemption Date, together with a complete form of the Redemption Notice, the
Trustee may give the Redemption Notice in the Company’s name and at its
expense.


(b)   If the Company does not redeem all of the
Securities, the Trustee will select the Securities to be redeemed in principal
amounts of $1,000 or multiples thereof by lot, on a pro rata basis or by any
other method that the Trustee considers fair and appropriate or in accordance
with the applicable procedures of the Depository to the extent Securities are
held in book-entry form. If any Securities are to be redeemed in part only, the
Company shall issue a new Security or Securities with a principal amount equal
to the unredeemed principal portion thereof. If a portion of a Holder’s
Securities is selected for partial redemption, and the Holder converts a
portion of its Securities, the converted portion will be deemed to be taken
from the portion selected for redemption.


(c)   If the Paying Agent holds Cash sufficient to
pay the redemption price of the Securities for which a Redemption Notice has
been delivered on the Redemption Date in accordance with the terms of this
Section 3.02, then, on and after the Redemption Date, the Securities will cease
to be outstanding and interest on such Securities shall cease to accrue,
whether or not the Securities are delivered to the Paying Agent. Thereafter,
all rights of the Holder shall terminate, other than the right to receive the
redemption price upon delivery of the Securities.


(d)   The Company shall not redeem Securities on
any date if the principal amount of the Securities has been accelerated and
such acceleration has not been rescinded, on or prior to such date.


(e)   Upon surrender of a Security that is redeemed
in part, the Trustee shall authenticate for the Holder a new Security of the
same maturity equal in principal amount to the unredeemed portion of the
Security surrendered.


(f)    Securities called for redemption are
convertible by the Holder until the Close of Business on the Business Day
immediately preceding the Redemption Date.


Section 3.03.  Purchase of Securities at
Option of the Holder upon a Fundamental Change. (a) In the event a
Fundamental Change shall occur at any time when any Securities remain
outstanding, each Holder shall have the right, at such Holder’s option, to
require the Company to purchase all of such Holders’ Securities or any portion
of the principal amount thereof that is equal to $1,000 or an integral multiple
thereof on a date specified by the Company (the “Fundamental
Change Purchase Date”) that is not less than 15 nor more than
45 Business Days after the date the Company mails the Fundamental Change
Company Notice pursuant to Section 3.03(b), at a purchase price in Cash equal
to 100% of the principal amount of the Securities tendered for purchase, plus
accrued and unpaid interest (including Additional Interest, if any) to, but not
including, the Fundamental Change Purchase Date (the “Fundamental
Change Purchase Price”), subject to satisfaction by or on behalf of
any Holder of the requirements set forth in Section 3.03(c).


A
“Fundamental Change” shall be deemed to
have occurred upon the occurrence of any of the following:


(i)    any “person” or “group” (other than the
Company or its employee benefit plans) becomes the “beneficial owner,” directly
or indirectly, of shares of the Company’s Voting Stock representing 50% or more
of the total voting power of all outstanding classes of the Company’s 



 31
 









Voting Stock or has the
power, directly or indirectly, to elect a majority of the members of the Board
of Directors and (a) files a Schedule 13D or Schedule TO, or any
successor schedule, form or report under the Exchange Act, disclosing the same,
or (b) the Company otherwise becomes aware of any such person or group;


(ii)   the Company consolidates with, or merges with
or into, another Person or, in a single transaction or a series of
transactions, the Company sells, assigns, conveys, transfers, leases or
otherwise disposes of all or substantially all of the Company’s assets, other
than any merger in which holders of the Common Stock immediately prior to the
merger have, directly or indirectly, at least a majority of the total voting
power in the aggregate of all classes of capital stock of the continuing or
surviving corporation immediately after the merger;


(iii)  the Common Stock into which the Securities are
then convertible ceases to be listed on the NYSE, NYSE Arca, NASDAQ or another
national securities exchange and is not then quoted on an established automated
over-the-counter trading market in the United States and no American Depositary
Shares or similar instruments for the Common Stock are so listed or quoted in
the United States;


(iv)  continuing directors cease to constitute a
majority of the Board of Directors; or


(v)   the Company’s stockholders approve any plan
or proposal for the Company’s liquidation or dissolution.


Notwithstanding
anything to the contrary set forth in this Indenture, it will not constitute a
Fundamental Change in the case of a transaction described in clause (ii) above
if:


(x)        at least 90% of all the consideration
(excluding Cash payments for fractional shares and Cash payments pursuant to
dissenters’ appraisal rights) in such transaction consists of common stock
traded on the NYSE Arca, NYSE, NASDAQ or another national securities exchange
(or which will be so traded when issued or exchanged in connection with such
merger or consolidation) and as a result of such transaction or transactions
the Securities become convertible solely into such shares of common stock;


(y)       the transaction is effected solely for
the purpose of changing the Company’s jurisdiction of incorporation and
resulting in a reclassification, conversion or exchange of outstanding shares
of the Common Stock, if at all, solely into shares of the surviving entity or a
direct or indirect parent of the surviving entity; or


(z)        the persons that “beneficially owned”,
directly or indirectly, shares of the Company’s Voting Stock representing a
majority of the total voting power of all of the Company’s outstanding Voting Stock
immediately prior to such transaction beneficially own, directly or indirectly,
shares of Voting Stock representing a majority of the total voting power of all
outstanding classes of Voting Stock of the surviving or transferee person.


For
purposes of this Section 3.03:


(1)           “person” and “group” shall have the meanings given to them for purposes of
Sections 13(d) and 14(d) of the Exchange Act or any successor provisions,
and the term “group” includes any group acting for the purpose of acquiring,
holding or disposing of securities within the meaning of Rule 13d-5(b)(1)
under the Exchange Act, or any successor provision;



 32
 









(2)           a “beneficial
owner” shall be determined in accordance with Rule 13d-3 under
the Exchange Act, as in effect on the date of this Indenture;


(3)           “beneficially own”
and “beneficially owned” have meanings
correlative to that of beneficial owner;


(4)           “board of directors”
means the board of directors or other governing body charged with the ultimate
management of any person;


(5)            “capital stock”
means:  (i) in the case of a
corporation, corporate stock; (ii) in the case of an association or
business entity, any and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock; (iii) in the case of a
partnership or limited liability company, partnership interests (whether
general or limited) or membership interests; or (iv) any other interest or
participation that confers on a person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing person; and


(6)           “continuing director”
means a director who either was a member of the Company’s board of directors on
July 25, 2007, or who becomes a member of the board of directors subsequent to
that date and whose election, appointment or nomination for election by the
Company’s stockholders is duly approved by a majority of the continuing
directors on the Company’s board of directors at the time of such approval,
either by a specific vote or by approval of the proxy statement issued by the
Company on behalf of the Company’s entire board of directors in which such
individual is named as a nominee for director.


(b)   Notice of Fundamental Change.  Within
30 Business Days after the effective date of each Fundamental Change, the
Company shall notify the Trustee of the Fundamental Change Purchase Date and
shall mail a written notice of the Fundamental Change (the “Fundamental Change Company Notice”) to each Holder (and to
beneficial owners as required by applicable law) in accordance with Section
14.02.  The Fundamental Change Company
Notice shall include the form of a Fundamental Change Purchase Notice to be
completed by the Holder and shall state, as applicable:


(i)       the events causing such Fundamental
Change and the date of such Fundamental Change;


(ii)      that the Holder has a right to require the
Company to purchase the Holder’s Securities;


(iii)     the date by which the Fundamental Change
Purchase Notice must be delivered to the Paying Agent in order for a Holder to
exercise the Fundamental Change purchase right;


(iv)     the Fundamental Change Purchase Date;


(v)      the Fundamental Change Purchase Price;


(vi)     the procedures that the Holder must follow
to exercise its Fundamental Change purchase right under this Section 3.03;


(vii)    the names and addresses of the Paying Agent
and the Conversion Agent;


(viii)   that the Securities must be surrendered to
the Paying Agent to collect payment of the Fundamental Change Purchase Price;



 33
 









(ix)      that the Fundamental Change Purchase Price
for any Security as to which a Fundamental Change Purchase Notice has been duly
given and not withdrawn shall be paid promptly following the later of the
Fundamental Change Purchase Date and the time of surrender of such Security;


(x)       the Conversion Rate (including any increase
in the Conversion Rate in the case of a Make-Whole Fundamental Change);


(xi)      that the Securities with respect to which
a Fundamental Change Purchase Notice has been given may be converted pursuant
to Article 4 of this Indenture only if either (A) the Fundamental Change
Purchase Notice has been withdrawn in accordance with the terms of this
Indenture or (B) there shall be a default in the payment of the Fundamental
Change Purchase Price;


(xii)     the procedures for withdrawing a
Fundamental Change Purchase Notice;


(xiii)    that, unless the Company defaults in making
payment of such Fundamental Change Purchase Price, interest on Securities
surrendered for purchase by the Company shall cease to accrue on and after the
Fundamental Change Purchase Date; and


(xiv)   the CUSIP number(s) of the Securities.


If
any of the Securities are in the form of a Global Security, then the Company
shall modify such notice to the extent necessary to accord with the Applicable
Procedures for repurchases.


At
the Company’s request, the Trustee shall give the Fundamental Change Company
Notice on behalf of the Company and at the Company’s expense; provided, however, that
the Company makes such request at least three Business Days (unless a shorter
period shall be consented to by the Trustee) prior to the date by which such
Fundamental Change Company Notice must be given to the Holders in accordance
with this Section 3.03(b); provided further,
however, that the text of such notice
shall be prepared by the Company.


(c)   Fundamental Change Purchase Notice.  A Holder may
exercise its right specified in Section 3.03(a) upon delivery of a written
notice (which shall be in substantially the form included in Exhibit A
hereto and which may be delivered by letter, overnight courier, hand delivery,
facsimile transmission or in any other written form and, in the case of Global
Securities, may be delivered electronically or by other means in accordance
with the Applicable Procedures) of the exercise of such rights (a “Fundamental Change Purchase Notice”) to and actually
received by a Paying Agent by the Close of Business, on the Business Day
immediately preceding the Fundamental Change Purchase Date.  The Fundamental Change Purchase Notice must
state:


(i)    if Certificated Securities are to be
delivered, the certificate numbers of the Securities that the Holder shall
deliver to be purchased;


(ii)   the portion of the principal amount of the
Securities that the Holder shall deliver to be purchased, which portion must be
in principal amounts of $1,000 or an integral multiple thereof; and


(iii)  that such Securities are being tendered for
and shall be purchased by the Company on the Fundamental Change Purchase Date
pursuant to the terms and conditions specified in this Indenture.



 34
 









The
delivery of such Security to any Paying Agent (together with all necessary
endorsements) at the office of such Paying Agent shall be a condition to the
receipt by the Holder of the Fundamental Change Purchase Price; provided, however, that
such Fundamental Change Purchase Price shall be paid pursuant to this Section
3.03 only if the Security so delivered to the Paying Agent shall conform in all
material respects to the description thereof in the related Fundamental Change
Purchase Notice.


The
Company shall purchase from the Holder thereof, pursuant to this Section 3.03,
a portion of a Security if the principal amount of such portion is $1,000 or an
integral multiple of $1,000.  Provisions
of this Section 3.03 that apply to the purchase of all of a Security also apply
to the purchase of such a portion of such Security.


Notwithstanding
anything herein to the contrary, any Holder delivering to the Paying Agent the
Fundamental Change Purchase Notice contemplated by this Section 3.03(c) shall
have the right to withdraw such Fundamental Change Purchase Notice at any time
prior to the Close of Business on the Business Day immediately preceding the
Fundamental Change Purchase Date by delivery of a written notice of withdrawal
to the Paying Agent in accordance with Section 3.04(b).


A
Paying Agent shall promptly notify the Company once each Business Day of the
receipt by it of any Fundamental Change Purchase Notices or written notices of
withdrawal thereof.


(d)   Notwithstanding anything herein to the
contrary, in the case of Global Securities, any Fundamental Change Purchase
Notice may be delivered or withdrawn, and such Securities may be surrendered or
delivered for purchase, in accordance with the Applicable Procedures.


Section 3.04.  Effect of Fundamental Change
Purchase Notice.  (a) Upon
receipt by any Paying Agent of a Fundamental Change Purchase Notice, the Holder
of the Security in respect of which such Fundamental Change Purchase Notice was
given shall (unless such Fundamental Change Purchase Notice is withdrawn as
specified below) thereafter be entitled to receive the Fundamental Change
Purchase Price with respect to such Security. 
Such Fundamental Change Purchase Price shall be paid to such Holder
promptly following the later of (i) the Fundamental Change Purchase Date (provided such Holder has satisfied the conditions in Section
3.03(c) with respect to such Security) and (ii) the time of delivery of
such Security to a Paying Agent by the Holder thereof in the manner required by
Section 3.03(c).  A Security in respect
of which a Fundamental Change Purchase Notice has been given by the Holder
thereof may not be converted pursuant to Article 4 hereof on or after the date
of the delivery of such Fundamental Change Purchase Notice, unless either (A)
such Fundamental Change Purchase Notice has first been validly withdrawn in
accordance with Section 3.04(b); or (B) there shall be a default in the payment
of the Fundamental Change Purchase Price; provided, that
the conversion right with respect to such Security shall terminate at the Close
of Business, on the date such default is cured and such Security is purchased
in accordance herewith.


(b)   A Fundamental Change Purchase Notice may be
withdrawn by any Holder delivering such Fundamental Change Purchase Notice upon
delivery of a written notice of withdrawal (which may be delivered by mail,
overnight courier, hand delivery, facsimile transmission or in any other
written form and, in the case of Global Securities, may be delivered
electronically or by other means in accordance with the Applicable Procedures)
to and actually received by Paying Agent at any time prior to the Close of
Business, on the Business Day immediately preceding the Fundamental Change
Purchase Date, specifying:


(i)    if Certificated Securities are to be
withdrawn, the certificate numbers of the Securities in respect of which such
notice of withdrawal is being submitted;



 35
 









(ii)   the principal amount of the Securities in
respect of which such notice of withdrawal is being submitted, which principal
amount must be $1,000 or an integral multiple thereof; and


(iii)  the principal amount, if any, of the
Securities that remains subject to the original Fundamental Change Purchase
Notice and that has been or shall be delivered for purchase by the Company.


Section 3.05.  Deposit of Fundamental Change
Purchase Price.  Prior to
10:00 a.m., New York City time, on a Fundamental Change Purchase
Date, the Company shall deposit with the Paying Agent (or if the Company or an
Affiliate of the Company is acting as the Paying Agent, shall segregate and
hold in trust as provided in Section 2.04) an amount in Cash (in immediately
available funds if deposited on such Fundamental Change Purchase Date)
sufficient to pay the aggregate Fundamental Change Purchase Price of all the
Securities or portions thereof that are to be purchased on that Fundamental
Change Purchase Date.


If
any Paying Agent holds, in accordance with the terms hereof, at
10:00 a.m., New York City time, on a Fundamental Change Purchase
Date, Cash sufficient to pay the aggregate Fundamental Change Purchase Price of
all Securities for which a Fundamental Change Purchase Notice has been
delivered and not validly withdrawn in accordance with this Indenture, then, on
and after such Fundamental Change Purchase Date, such Securities shall cease to
be outstanding and interest (including Additional Interest, if any) on such
Securities shall cease to accrue, whether or not such Securities are delivered
to the Paying Agent, and all rights of the Holders in respect thereof shall
terminate (other than the right to receive the Fundamental Change Purchase
Price upon delivery of such Securities by their Holders to the Paying Agent).


Section 3.06.  Securities Purchased in
Part.  Any Certificated
Security that is to be purchased only in part shall be surrendered at the office
of any Paying Agent (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form reasonably
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder’s attorney duly authorized in writing), and promptly
after a Fundamental Change Purchase Date, the Company shall issue and the
Trustee shall, upon receipt of a Company Order (which the Company agrees to
deliver promptly), authenticate and deliver to the Holder of such Security,
without service charge, a new Security or Securities, of such authorized
denomination or denominations as may be requested by such Holder, in aggregate
principal amount equal to, and in exchange for, the portion of the principal
amount of the Security so surrendered that is not purchased.


Section 3.07.  Repayment to the Company.  To the extent that the aggregate
amount of Cash deposited by the Company pursuant to Section 3.03 exceeds the
aggregate Fundamental Change Purchase Price of the Securities or portions
thereof that the Company is obligated to purchase on the Fundamental Change
Purchase Date, then, within one day after the Fundamental Change Purchase Date,
the Paying Agent shall return any such excess Cash to the Company.


Section 3.08.  Compliance with Securities
Laws upon Purchase of Securities.  When
complying with the provisions of Article 3 hereof (provided
that such offer or purchase constitutes an “issuer tender offer” for purposes
of Rule 13e-4 (which term, as used herein, includes any successor
provision thereto) under the Exchange Act at the time of such offer or
purchase), and subject to any exemptions available under applicable law, the
Company shall:


(a)   comply with Rule 13e-4, Rule 14e-1
and any other tender offer rules under the Exchange Act that may then be
applicable; and



 36
 









(b)   otherwise comply with all federal and state
securities laws so as to permit the rights and obligations in connection with
any purchase pursuant to this Article 3 to be exercised in the time and in the
manner specified herein.


ARTICLE 4

CONVERSION


Section 4.01.  Conversion Privilege.  The Securities shall be
convertible in accordance with their terms and in accordance with and subject
to this Article 4 into a number of shares of Common Stock equal to the Applicable
Conversion Rate, subject to the following sentence regarding fractional shares
and subject to the Company’s right to elect to satisfy all or a portion of its
conversion obligation in Cash pursuant to Section 4.14, on any Trading Day on
or before the Close of Business on the Business Day immediately preceding the
Maturity Date or, with respect to Securities called for redemption, the
Redemption Date.


A
Holder of a Security otherwise entitled to a fractional share will receive Cash
in an amount equal to the value of such fractional share based on the
Applicable Stock Price.


A
Security for which a Holder has delivered a Fundamental Change Purchase Notice
requiring us to purchase the Securities may be surrendered for conversion only
if such notice is withdrawn in accordance with this Indenture.


Section 4.02.  Conversion upon Satisfaction
of Collateral Price Trigger.


(a)   If the Company elects to redeem the
Securities, in whole or in part, the Company shall pay to any Holder that
elects to convert its Securities (whether or not such Securities are called for
redemption) during the period from and including the date the Company gives its
Redemption Notice to and including the Business Day immediately preceding the
Redemption Date, in addition to the amount of Common Stock and/or Cash
specified pursuant to Section 4.14, the amount of any accrued and unpaid
interest on the Securities being converted, together with the Coupon Make-Whole
Payment for such Securities (such aggregate amount, the “Additional
Amount”).  In addition, if the
Collateral Price Trigger Notice required by Section 5.17(b) does not state that
the Company is electing to redeem the Securities in whole or in part, the
Company shall also pay, on the Conversion Settlement Date, the Additional
Amount to any Holder that converts its Securities during the period of 10
Trading Days beginning on the Trading Day immediately succeeding the date the
Company delivers the Collateral Price Trigger Notice.


(b)   The Company may elect to pay any Additional
Amount in Cash or in shares of Common Stock by notice given to Holders of
Securities:


(i)    in the case of any Additional Amounts
payable in connection with a redemption of Securities, in the Company’s
Redemption Notice; and


(ii)   in all other cases, in the Collateral Price
Trigger Notice;


provided that if the Company does
not make such election, the Company shall pay the Additional Amounts solely in
Cash.


(c)   If the Company elects to pay any Additional
Amounts in shares of Common Stock, the number of shares payable for each $1,000
principal amount of Securities shall equal the Additional 



 37
 









Amount per $1,000 principal amount of Securities
divided by 95% of the average of the Daily Volume-weighted Average Prices of
the Common Stock over the applicable measurement period, which shall be in the
case of any Additional Amounts payable in connection with a redemption of
Securities, the 10 Trading Days beginning on the 12th Scheduled Trading Day
prior to the Redemption Date, and in all other cases, the 10 Trading Days
beginning on the Trading Day immediately succeeding the date the Company
delivers the Collateral Price Trigger Notice.


Section 4.03.  Conversion upon Make-Whole
Fundamental Changes.  (a) If a
Holder elects to convert its Securities in connection with a Make-Whole Fundamental
Change, then the Conversion Rate of the Securities being converted by such
Holder shall be increased by an additional number of shares of Common Stock
(the “Additional Shares”) pursuant to the
table attached as Exhibit B hereto.  For
the avoidance of doubt, the increases provided for in this Section 4.03 shall
only be made with respect to the Securities being converted in connection with
such Make-Whole Fundamental Change and shall not be effective as to any
Securities not so converted.  For purposes
of this Section 4.03, a conversion shall be deemed to be “in connection” with a
Make-Whole Fundamental Change to the extent that such conversion is effected at
any time from and after the public announcement of, and until thirty
(30) Trading Days after, the Effective Date of such Make-Whole Fundamental
Change.


The
increase in the Conversion Rate, expressed as a number of Additional Shares to
be received per $1,000 principal amount of Securities, shall be determined by
the Company by reference to the table attached as Exhibit B hereto, based
on the date on which the Make-Whole Fundamental Change occurs or becomes
effective (the “Effective Date”) and the price
paid or deemed to be paid per share of Common Stock in the transaction
constituting the Make-Whole Fundamental Change (the “Stock Price”);
provided that if a Holder of the Common
Stock receives only Cash in connection with a Fundamental Change described in
clause (ii) of the definition of Fundamental Change, the Stock Price
shall be the Cash amount paid per share. 
In all other cases, the Stock Price shall be the average of the Closing
Price of the Common Stock over the five consecutive Trading Day period ending
on the Trading Day preceding the Effective Date, provided that
if the Stock Price is between two Stock Price amounts in the table or the
Effective Date is between two Effective Dates in the table, the Company shall
determine the increased Conversion Rate by a straight-line interpolation
between the number of Additional Shares set forth for the next higher and next
lower Stock Price amounts and the next earliest and next latest Effective
Dates, based on a 365 day year, as applicable. 
If (i) the Stock Price is greater than $12.50 per share of Common Stock (subject
to adjustment as of any date on which the Conversion Rate is adjusted pursuant
to Section 4.07), no Additional Shares will be added to the Conversion Rate,
and (ii) the Stock Price is less than $3.75 per share (subject to adjustment in
the same manner as set forth in Section 4.07), no Additional Shares shall be
added to the Conversion Rate.  An
adjusted Stock Price pursuant to the foregoing sentence shall equal the Stock
Price applicable immediately prior to such adjustment, multiplied by a fraction,
the numerator of which is the Conversion Rate immediately prior to the
adjustment giving rise to the Stock Price adjustment and the denominator of
which is the Conversion Rate as so adjusted. 
The number of Additional Shares set forth in Exhibit B shall be adjusted
whenever, and on the same basis, the Conversion Rate shall be adjusted pursuant
to Section 4.07.


(b)   At least 15 calendar days prior to the
Effective Date, the Company shall mail to all Holders at their addresses shown
in the Register of the Registrar and to beneficial owners as required by
applicable law a notice (a “Make-Whole Fundamental
Change Notice”) regarding the Make-Whole Fundamental Change.  The Make-Whole Fundamental Change Notice
shall state, as applicable: (i) the events causing such Make-Whole Fundamental
Change; (ii) the expected Effective Date of such Make-Whole Fundamental Change;
(iii) the last date on which a Holder may exercise the conversion right in
connection with such Make-Whole Fundamental Change; (iv) the names and
addresses of the Paying and Conversion Agents; (v) the Conversion Rate
(including any increase to the Conversion Rate as a result of such Make-Whole
Fundamental Change); (vi) that Securities with respect to which a Fundamental 



 38
 









Change Purchase Notice is given by the Holder in
connection with a Fundamental Change may be converted, only if the Fundamental
Change Purchase Notice has been withdrawn in accordance with Section 3.04(b);
and (vii) the procedures that Holders must follow to exercise the right.


Section 4.04.  Conversion Procedure.  (a) The right of conversion
attaching to any Security may be exercised at any time during which conversion
is permitted in accordance with Section 4.01 (i) if such Security is
represented by a Global Security, by book-entry transfer to the Conversion
Agent through the facilities of the Depositary in accordance with the
Applicable Procedures, or (ii) if such Security is represented by a
Certificated Security, by delivery of such Security at the specified office of
the Conversion Agent, accompanied, in either case, by:  (A) a duly signed and completed conversion
notice (the “Conversion Notice”), in the form
as set forth on the reverse of Security attached hereto as Exhibit A; (B) if
such Certificated Security has been lost, stolen, destroyed or mutilated, a
notice to the Conversion Agent in accordance with Section 2.07 regarding the
loss, theft, destruction or mutilation of the Security; (C) appropriate
endorsements and transfer documents if required by the Conversion Agent; and
(D) payment of any tax or duty, in accordance with Section 4.05, which may be
payable in respect of any transfer involving the issue or delivery of the
Common Stock in the name of a Person other than the Holder of the
Security.  The date on which the Holder satisfies
all of those requirements is the “Conversion Date.”  The Securities shall be deemed to be
converted immediately prior to the Close of Business on the Conversion
Date.  The Company shall deliver to the
Holder through a Conversion Agent a certificate for the number of whole shares
of Common Stock issuable upon the conversion (and Cash in lieu of any
fractional shares pursuant to Section 4.01) as soon as practicable following
the Conversion Date.


(b)   The person in whose name the Security is
registered shall be deemed, to the extent such person receives Common Stock
upon conversion, to be a stockholder of record on the Conversion Date; provided, however, that
no surrender of a Security or satisfaction of the other conditions in Section
4.04(a) on any date when the stock transfer books of the Company shall be
closed shall be effective to constitute the person or persons entitled to
receive the shares of Common Stock upon such conversion as the record holder or
holders of such shares of Common Stock on such date, but such surrender shall, provided that all such conditions have been satisfied, be
effective to constitute the person or persons entitled to receive such shares
of Common Stock as the record holder or holders thereof for all purposes at the
Close of Business on the next succeeding day on which such stock transfer books
are open.  Upon conversion of a Security,
such person shall no longer be a Holder of such Security.  No separate payment or adjustment shall be
made for accrued and unpaid interest on a converted Security or for dividends
or distributions on shares of Common Stock issued upon conversion of a
Security.  Except as otherwise provided
in this Indenture, by delivering to the holder the shares of Common Stock
issuable upon conversion, together with a Cash payment in lieu of any fractional
shares or for its settlement obligations pursuant to Section 4.14, the Company
shall satisfy its obligation with respect to the conversion of the
Securities.  Accordingly, any accrued but
unpaid interest shall be deemed paid in full upon conversion, rather than
cancelled, forfeited or extinguished.


(c)   Upon surrender of a Security that is
converted in part, the Company shall execute, and the Trustee shall, upon
receipt of a Company Order, authenticate and deliver to the Holder, a new
Security equal in principal amount of the unconverted portion of the Security
surrendered.


Section 4.05.  Taxes on Conversion.  If a Holder converts a Security,
the Company shall pay any documentary, stamp or similar issue or transfer taxes
or duties relating to the issuance or delivery of shares of Common Stock upon
exercise of such conversion rights. 
However, the Holder shall pay any tax or duty which may be payable
relating to any transfer involving the issuance or delivery of shares of Common
Stock in a name other than the Holder’s name. 
The Conversion Agent may refuse to deliver the certificate representing
shares of Common Stock being issued in a name other than the Holder’s name 



 39
 









until the Conversion Agent receives a sum sufficient
to pay any tax or duties which will be due because the shares are to be issued
in a name other than the Holder’s name. 
Nothing herein shall preclude any tax withholding required by law or
regulation.


Section 4.06.  Company to Provide Stock.  (a) The Company shall, prior
to the issuance of any Securities hereunder, and from time to time as may be
necessary, reserve at all times and keep available, free from preemptive
rights, out of its authorized but unissued Common Stock, a sufficient number of
shares of Common Stock deliverable upon conversion of all of the Securities.


(b)   All shares of Common Stock that may be issued
upon conversion of the Securities shall be newly issued shares or shares held
in the treasury of the Company, shall be duly authorized, validly issued, fully
paid and nonassessable and shall be free of any preemptive rights and free of
any lien or adverse claim.


(c)   The Company shall comply with all applicable
securities laws regulating the offer and delivery of any Common Stock upon
conversion of Securities and, if the Common Stock is then listed or quoted on
the NYSE, NASDAQ or any other United States national or regional securities
exchange or other market, shall list or cause to have quoted and keep listed
and quoted the shares of Common Stock issuable upon conversion of the
Securities to the extent permitted or required by the rules of such exchange or
market; provided, however,
that, if the rules of such automated quotation system or exchange permit the
Company to defer the listing of such Common Stock until the first conversion of
the Securities into Common Stock in accordance with the provisions of this
Indenture, the Company covenants to list such Common Stock issuable upon
conversion of the Securities in accordance with the requirements of such
automated quotation system or exchange at such time.


(d)   Notwithstanding anything herein to the
contrary, nothing herein shall give to any Holder any rights as a creditor in
respect solely of its right to conversion.


Section 4.07.  Adjustment of Conversion Rate.  The Conversion Rate shall be adjusted from
time to time by the Company if any of the following events occur:


(a)   If the Company, at any time or from time to
time while any of the Securities are outstanding, pays a dividend in shares of
Common Stock or makes a distribution in shares of Common Stock to all holders
of outstanding shares of Common Stock, or if the Company subdivides the
outstanding shares of Common Stock into a greater number of shares of Common
Stock or combines outstanding shares of Common Stock into a smaller number of
shares of Common Stock or reclassifies the Common Stock, then the Conversion
Rate shall be adjusted based on the following formula:





where


CR0                           =              the Conversion Rate in effect
immediately prior to the Ex Date of such dividend or distribution, or effective
date of such subdivision, combination or reclassification, as applicable;


CR’                            =              the Conversion Rate in effect on
and after the Ex Date or effective date of such subdivision, combination or
reclassification;



 40















OS0                           =              the number of shares of Common Stock outstanding
immediately prior to such dividend or distribution, or effective date of such
subdivision, combination or reclassification, as applicable; and


OS’                            =              the number of shares of Common
Stock outstanding on and after such dividend or distribution or effective date
of such subdivision, combination or reclassification, as applicable.


Such
adjustment shall become effective immediately after 9:00 a.m., New York City
time, immediately following such dividend or distribution, or the effective
date fixed for determination for such subdivision, share combination or
reclassification.  The Company will not
pay any dividend or make any distribution on shares of Common Stock held in
treasury by the Company.  If any dividend
or distribution of the type described in this ‎Section 4.07(a) is
declared but not so paid or made, or the outstanding shares of Common Stock are
not subdivided, combined or reclassified, as the case may be, the Conversion
Rate shall again be adjusted, effective as of the date the Board of Directors
publicly announces its decision not to pay or make such dividend or
distribution or not to subdivide, combine or reclassify the outstanding shares
of Common Stock ,as applicable, to the Conversion Rate which would then be in
effect if such dividend, distribution, subdivision, combination or
reclassification or had not been declared.


(b)   If the Company, at any time or from time to
time while any of the Securities are outstanding, issues to all holders of its
outstanding shares of Common Stock any rights or warrants entitling them for a
period of not more than 60 calendar days to subscribe for or purchase shares of
Common Stock at a price per share less than the average of the Closing Price of
the Common Stock for the five consecutive Trading Day period ending on the
Business Day immediately preceding the date of announcement of such issuance,
the Conversion Rate shall be adjusted based on the following formula:





where


CR0                           =              the Conversion Rate in effect at
the Close of Business on the Business Day immediately preceding the Ex Date for
such issuance;


CR’                            =              the Conversion Rate in effect at
9:00 a.m., New York City time, on the Ex Date for such issuance;


OS0                           =              the number of shares of Common Stock that are
outstanding at the Close of Business on the Ex Date for such issuance;


X                                       =              the total number of shares of
Common Stock issuable pursuant to such rights or warrants; and


Y                                        =              the number of shares of Common
Stock equal to the quotient of (x) the aggregate price payable to exercise such
rights or warrants, divided by (y) the average of the Closing Price for the
five consecutive Trading Day period ending on the Business Day immediately
preceding the date of announcement of the issuance of such rights or warrants.


Such
adjustment shall be successively made whenever any such rights or warrants are
issued and shall become effective immediately after 9:00 a.m., New York City
time, on the Business Day following 



 41
 









the Ex Date of such issuance.  To the extent that shares of Common Stock are
not delivered pursuant to such rights or warrants upon the expiration or
termination of such rights or warrants, the Conversion Rate shall be readjusted
to the Conversion Rate which would then be in effect had the adjustments made
upon the issuance of such rights or warrants been made on the basis of the
delivery of only the number of shares of Common Stock actually delivered.  In the event that such rights or warrants are
not so issued, the Conversion Rate shall again be adjusted, effective as of the
date the Board of Directors publicly announces its decision not to issue such
rights or warrants, to be the Conversion Rate which would then be in effect if
the announcement with respect to such rights or warrants had not been made.


In
determining whether any rights or warrants entitle the holders to subscribe for
or purchase shares of Common Stock at less than the average of the Closing
Price for the five consecutive Trading Day period ending on the Business Day
immediately preceding the date of announcement of such issuance, and in
determining the aggregate offering price of such shares of Common Stock, there
shall be taken into account any consideration received by the Company for such
rights or warrants and any amount payable on exercise thereof, the value of
such consideration, if other than Cash, to be determined in good faith by the
Board of Directors.


(c)   In case the Company shall, by dividend or
otherwise, distribute to all holders of its Common Stock (i) shares of any
class of Capital Stock of the Company (other than Common Stock as covered by
‎Section 4.07(a)), (ii) evidences of Debt of the Company or (iii) other
assets or property of the Company (including securities, but excluding (A)
dividends, distributions and rights or warrants covered by Section 4.07(a) or
Section 4.07(b) (for which an adjustment is made to the Conversion Rate), (B)
Cash covered by Section 4.07(d) (for which an adjustment is made to the
Conversion Rate) and (C) to the extent provided in Section 4.09, rights
distributed pursuant to a stockholder rights plan) (any of such shares of
Capital Stock, Debt, or other assets or property hereinafter in this Section
4.07(c) called the “Distributed Property”),
then, in each such case, the Conversion Rate shall be adjusted based on the
following formula:





where


CR0                           =              the Conversion Rate in effect at the Close of Business
on the Business Day immediately prior to the Ex Date for such distribution;


CR’                            =              the Conversion Rate in effect at
9:00 a.m., New York City time, on the Ex Date for such distribution;


SP0                             =              the average of the Closing Price over the five
consecutive Trading Day period ending on the Trading Day immediately preceding
the Ex Date for such distribution; and


FMV                     =              the fair market value (as
determined by the Company’s Board of Directors) of the shares of Capital Stock
of the Company, evidences of Debt, assets or property distributed with respect
to each outstanding share of Common Stock on the Ex Date for such distribution.


Such
adjustment shall become effective immediately prior to 9:00 a.m., New York City
time, on the Business Day following the Ex Date; provided
that if the then fair market value (as so determined) of the portion of the
Distributed Property so distributed applicable to one share of Common Stock is
equal to 



 42
 









or greater than SP0 as
set forth above, in lieu of the foregoing adjustment, adequate provision shall
be made so that each Holder shall have the right to receive, for each $1,000
principal amount of Securities upon conversion, the amount of Distributed Property
such holder would have received had such holder owned a number of shares of
Common Stock equal to the Conversion Rate on the record date.  If such dividend or distribution is not so
paid or made, the Conversion Rate shall again be adjusted to be the Conversion
Rate that would then be in effect if such record date had not been fixed
effective as of the date the Board of Directors publicly announces its decision
not to make or pay such dividend or distribution.  If the Board of Directors determines the fair
market value of any distribution for purposes of this ‎Section 4.07(c) by
reference to the actual or when issued trading market for any securities, it
shall in doing so consider the prices in such market over the same period used
in computing the average of the Closing Price of the Common Stock.


With
respect to an adjustment pursuant to this Section 4.07(c) where there has been
a payment of a dividend or other distribution on the Common Stock consisting of
shares of Capital Stock of any class or series, or similar Equity Interest, of
or relating to a Subsidiary or other business unit of the Company (a “Spin-Off,” and any such dividend or distribution of Common
Stock, shares of Capital Stock or Equity Interests being “Spin-Off
Securities”), the Conversion Rate in effect immediately before the
Close of Business, on the fifteenth Trading Day immediately following, and
including, the effective date of such distribution shall be increased based on
the following formula:





where


CR0                           =              the Conversion Rate in effect immediately prior to the
Close of Business on the fifteenth Trading Day immediately following, and
including, the effective date for the distribution of the Spin-Off Securities;


CR’                            =              the Conversion Rate in effect at
9:00 a.m., New York City time, on the effective date for the distribution of
the Spin-Off Securities;


FMV0                =              the
average of the Closing Price of the Capital Stock or similar Equity Interest
distributed to holders of Common Stock applicable to one share of Common Stock
over the first 10 consecutive Trading Day period commencing on, and including,
the fifth Trading Day immediately succeeding the effective date of such
distribution; and


MP0                        =              the average of the Closing Price of Common Stock over
the first 10 consecutive Trading Day period commencing on, and including, the
fifth Trading Day immediately succeeding the effective date of such
distribution.


Such
adjustment shall occur at the Close of Business on the fifteenth Trading Day
from, and including, the effective date for the distribution of the Spin-Off
Securities; provided, however, that the Company may
in lieu of the foregoing adjustment elect to make adequate provision so that
each Holder of Securities shall have the right to receive upon conversion
thereof the amount of such Spin-Off Securities that such Holder of Securities
would have received if such Securities had been converted into shares of Common
Stock at the Conversion Rate on the record date with respect to such
distribution.


Rights
or warrants distributed by the Company to all holders of Common Stock entitling
the holders thereof to subscribe for, purchase or convert into shares of the
Company’s capital stock (either 



 43
 









initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events (“Trigger Event”):  (x)
are deemed to be transferred with such shares of Common Stock; (y) are not
exercisable; and (z) are also issued in respect of future issuances of Common
Stock, shall be deemed not to have been distributed for purposes of this
‎Section 4.07(c), (and no adjustment to the Conversion Rate under this
Section 4.07(c), shall be required) until the occurrence of the earliest
Trigger Event, whereupon such rights or warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the
Conversion Rate shall be made under this ‎Section 4.07(c).  If any such right or warrant, including any
such existing rights or warrants distributed prior to the date of this
Indenture, are subject to events, upon the occurrence of which such rights or
warrants become exercisable to purchase different securities, evidences of Debt
or other assets, then the date of the occurrence of any and each such event
shall be deemed to be the date of distribution and Ex Date with respect to new
rights or warrants with such rights (and a termination or expiration of the
existing rights or warrants without exercise by any of the holders
thereof).  In addition, in the event of
any distribution (or deemed distribution) of rights or warrants or any Trigger
Event or other event (of the type described in the preceding sentence) with
respect thereto that was counted for purposes of calculating a distribution
amount for which an adjustment to the Conversion Rate under this Section
4.07(c) was made, (1) in the case of any such rights or warrants that shall all
have been redeemed or repurchased without exercise by any holders thereof, the
Conversion Rate shall be readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as the case may be, as
though it were a Cash distribution, equal to the per share redemption or
repurchase price received by a holder or holders of Common Stock with respect
to such rights or warrants (assuming such holder had retained such rights or
warrants), made to all holders of Common Stock as of the date of such
redemption or repurchase, and (2) in the case of such rights or warrants that
shall have expired or been terminated without exercise by any holders thereof,
the Conversion Rate shall be readjusted as if such rights or warrants had not
been issued.


For
purposes of this Section 4.07(c), Section 4.07(a) and Section 4.07(b), any
dividend or distribution to which this Section 4.07(c) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock to which Section 4.07(a) or 4.07(b) applies (or
both), shall be deemed instead to be (1) a dividend or distribution of the
evidences of Debt, assets or shares of capital stock other than such shares of
Common Stock or rights or warrants to which Section 4.07(a) or 4.07(b) applies
(and any Conversion Rate adjustment required by this Section 4.07(c) with
respect to such dividend or distribution shall then be made) immediately
followed by (2) a dividend or distribution of such shares of Common Stock or
such rights or warrants to which Section 4.07(a) or 4.07(b) applies (and any
further Conversion Rate adjustment required by Section 4.07(a) and 4.07(b) with
respect to such dividend or distribution shall then be made), except (A) the Ex
Date of such dividend or distribution shall be substituted for “the Ex Date,”
“such dividend or distribution or effective date, as applicable,” “immediately
following such dividend or distribution, or the effective date for such
subdivision or share combination,” “the Ex Date for such issuance” and “the
Business Day following the Ex Date of such issuances” within the meaning of
Section 4.07(a) and Section 4.07(b) and (B) any shares of Common Stock included
in such dividend or distribution shall not be deemed “outstanding immediately
prior to such dividend or distribution or effective date, as applicable” within
the meaning of Section 4.07(a).


(d)   If a Cash dividend or distribution is made to
all holders of Common Stock (other than (i) in connection with the Company’s
liquidation, dissolution or winding up or (ii) distributions described in
Section 4.07(e)), the Conversion Rate shall be adjusted based on the following
formula:






 44
 









where


CR0                           =              the Conversion Rate in effect at
the Close of Business on the Business Day immediately prior to the Ex Date for
such dividend or distribution;


CR’                            =              the Conversion Rate in effect at
9:00 a.m., New York City time, on the Ex Date for such distribution;


SP0                             =              the average Closing Price of the Common Stock for the
five consecutive Trading Day period ending on the Trading Day immediately
preceding the Ex Date for such dividend or distribution; and


C                                        =              the amount in Cash per share the
Company dividends or distributes to holders of Common Stock.


Such
adjustment shall become effective immediately after the Close of Business, on
the Ex Date for such dividend or distribution; provided
that if the portion of the Cash so distributed applicable to one share of
Common Stock is equal to or greater than SP0 as
set forth above, in lieu of the foregoing adjustment, adequate provision shall
be made so that each Holder shall have the right to receive, for each $1,000
principal amount upon conversion, the amount of Cash such Holder would have
received had such Holder owned a number of shares of Common Stock equal to the
Conversion Rate on the record date.  If
such dividend or distribution is not so paid or made, the Conversion Rate shall
again be adjusted, effective as of the date the Board of Directors announces
its decision not to make or pay such dividend or distribution, to be the
Conversion Rate that would then be in effect if such dividend or distribution
had not been declared.


For
the avoidance of doubt, for purposes of this ‎Section 4.07(d), in the
event of any reclassification of the Common Stock, as a result of which the
Securities become convertible into more than one class of Common Stock, if an
adjustment to the Conversion Rate is required pursuant to this ‎Section
4.07(d), references in this Section 4.07(d) to one share of Common Stock or
Closing Price of one share of Common Stock shall be deemed to refer to a unit
or to the price of a unit consisting of the number of shares of each class of
Common Stock into which the Securities are then convertible equal to the
numbers of shares of such class issued in respect of one share of Common Stock
in such reclassification.  The above
provisions of this paragraph shall similarly apply to successive
reclassifications.


(e)   If the Company or any of its Subsidiaries
makes a payment in respect of a tender offer or exchange offer for all or any
portion of the Common Stock, to the extent that the Cash and value of any other
consideration included in the payment per share of Common Stock validly
tendered or exchanged exceeds the Closing Price of the Common Stock on the
Trading Day immediately succeeding the last date (the “Expiration
Date”) on which tenders or exchanges may be made pursuant to such
tender or exchange offer (as it may be amended), the Conversion Rate shall be
increased based on the following formula:






 45
 









where


CR0                           =              the Conversion Rate in effect
immediately before the Close of Business on the Expiration Date;


CR’                            =              the Conversion Rate in effect on
and after the effective date of the adjustment;


AC                              =              the aggregate value of all Cash
and any other consideration (as determined in good faith by the Company’s Board
of Directors) paid or payable for shares purchased in such tender or exchange
offer;


OS0                           =              the number of shares of Common Stock outstanding as of
the Expiration  Time (including any
shares validly tendered and not withdrawn pursuant to the tender or exchange
offer but excluding shares held in treasury);


OS’                            =              the number of shares of Common
Stock outstanding as of the last time (the “Expiration
Time”) tenders or exchanges could have been made pursuant to the
tender or exchange offer (excluding shares validly tendered and not withdrawn
in connection with the tender or exchange offer and any shares held in the
Company’s treasury); and


SP’                              =              the Closing Price of the Common
Stock on the Trading Day immediately succeeding the Expiration Date.


The
adjustment to the Conversion Rate under this Section 4.07(e) shall occur on the
Trading Day next succeeding the Expiration Date.


If
the Company is obligated to repurchase shares pursuant to any such tender or
exchange offer, but the Company is permanently prevented by applicable law from
effecting any such purchases or all or any portion of such purchases are
rescinded, the Conversion Rate shall again be adjusted to be the Conversion
Rate that would then be in effect if such tender or exchange offer had not been
made or had only been made in respect of the purchases that had been effected.


(f)    For purposes of this Section 4.07 the term “record date” shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of Common Stock
have the right to receive any Cash, securities or other property or in which
the Common Stock (or other applicable security) is exchanged for or converted
into any combination of Cash, securities or other property, the date fixed for
determination of stockholders entitled to receive such Cash, securities or
other property (whether such date is fixed by the Board of Directors or by
statute, contract or otherwise).


(g)   If application of the formulas provided in
Sections 4.07(a), 4.07(b), 4.07(c), 4.07(d) or 4.07(e) would result in a
decrease in the Conversion Rate, no adjustment to the Conversion Rate shall be
made except in the case of a subdivision or split of the Common Stock.


(h)   Notwithstanding this Section 4.07, in no
event shall the Conversion Rate exceed 266.6662 shares per $1,000 principal
amount of Securities, as adjusted pursuant to Sections 4.07(a), (b), (c) and
(e) above, as a result of an adjustment pursuant to Section 4.07(d).


Section 4.08.  No Adjustment.  No adjustment in the Conversion
Rate shall be required unless the adjustment would result in a change in the
Conversion Rate of at least 1.00%; provided, however, that any adjustment which by reason of this Section
4.08 is not required to be made shall be carried forward and 



 46
 









taken into account in subsequent adjustments and in
connection with any conversion of Securities. 
All calculations under this Article 4 shall be made to the nearest
one-ten thousandth (1/10,000) of a share.


No
adjustment in the Conversion Rate need be made for (i) issuances of Common
Stock pursuant to any present or future Company plan for reinvestment of
dividends or interest payable
on the Company’s securities or the investment or additional
optional amounts thereunder in shares of Common Stock, (ii) upon the issuance
of any shares of Common Stock or options or rights to purchase shares of Common
Stock pursuant to any present or future employee, director or consultant
benefit plan or program of or assumed by the Company or any of its Subsidiaries
or (iii) upon the issuance of any shares of Common Stock pursuant to any
option, warrant, right or exercisable, exchangeable or convertible security
outstanding as of the date the Securities were first issued.


No
adjustment to the Conversion Rate need be made pursuant to Section 4.07 for a
transaction if Holders are permitted to participate in the transaction without
conversion (assuming each Holder of a $1,000 principal amount Security held
shares of Common Stock equal to the Conversion Rate).


No
adjustment to the Conversion Rate need be made for accrued and unpaid interest,
including Additional Interest, if any.


Whenever
a provision of this Indenture requires the calculation of an average of the
Closing Price over a span of multiple days, the Company shall make appropriate
adjustments to account for any adjustment to the Conversion Rate that becomes
effective, or any event requiring an adjustment to the Conversion Rate that
becomes effective, or any event requiring an adjustment to the Conversion Rate
where the Ex Date of the event occurs, at any time during the period from
which the average is to be calculated.


Section 4.09.  Stockholder Rights Plans.  Upon conversion of the Securities,
the Holders shall receive, in addition to any shares of Common Stock issuable
upon such conversion, any associated rights issued under any future stockholder
rights plan the Company adopts that provides that each share of Common Stock
issued upon conversion of the Securities at any time prior to the distribution
of separate certificates representing such rights shall be entitled to receive
such rights unless, prior to conversion, the rights have separated from the
Common Stock, expired, terminated or been redeemed or exchanged in accordance
with such stockholder rights plan, and no adjustment shall be made to the
Conversion Rate pursuant to Section 4.07. 
If the rights have separated from the Common Stock, the Conversion Rate
shall be adjusted at the time of separation as if the Company distributed to
all holders of Common Stock, shares of Capital Stock, evidences of Debt or
assets as described in Section 4.07(c), subject to readjustment in the event of
the expiration, termination or redemption of such rights.


Section 4.10.  Effect of Reclassification,
Consolidation, Merger or Sale on Conversion Privilege.  If (1) there shall occur (a)
any reclassification of the Company’s Common Stock (other than a change in par
value, or from par value to no par value, or from no par value to par value, or
as a result of a subdivision or combination of the Common Stock); (b) a
consolidation, merger or combination involving the Company other than a merger
in which the Company is the continuing corporation and which does not result in
any reclassification of, or change (other than in par value, or from par value
to no par value, or from no par value to par value, or as a result of a
subdivision or combination) in, outstanding shares of Common Stock; or (c) a
sale or conveyance as an entirety or substantially as an entirety of the
property and assets of the Company, directly or indirectly, to another Person;
and (2) pursuant to such reclassification, consolidation, merger,
combination, sale or conveyance, holders of outstanding shares of Common Stock
would be entitled to receive stock (other than Common Stock), other securities,
other property, assets or Cash (or any combination thereof) for such shares of
Common Stock (any such event a “Merger Event”),
then the Company, or such successor or surviving, purchasing or transferee
Person, as 



 47
 









the case may be, shall, as a condition precedent to
such Merger Event, execute and deliver to the Trustee a supplemental indenture
providing that, at the effective time of the Merger Event, the right to convert
a Security will be changed, without the consent of any Holders, into a right to
convert it into the kind and amount of shares of stock, other securities or other
property or assets (including Cash or any combination thereof) that a holder of
a number of shares of Common Stock equal to the Conversion Rate immediately
prior to such Merger Event would have owned or been entitled to receive (the “Reference Property”) upon such transaction (assuming for
such purposes that such conversion were settled entirely in the Common Stock
and without giving effect to any adjustment to the Conversion Rate with respect
to a Make-Whole Fundamental Change) immediately prior to such Merger Event,
except that such Holders shall not be entitled to an increase in the Conversion
Rate if such Holder does not convert its Securities “in connection with” the
relevant Make-Whole Fundamental Change.  If
the Merger Event causes the Common Stock to be converted into the right to
receive more than a single type of consideration (determined based in part upon
any form of stockholder election), the Reference Property into which the
Securities will be convertible shall be deemed to be the weighted average of
the types and amounts of consideration received by the holders of Common Stock
that affirmatively make such an election. 
None of the foregoing provisions shall affect the right of a holder of
Securities to convert its Securities in accordance with the provisions of this
Article 4 prior to the effective date of such Merger Event.  Such supplemental indenture shall provide for
adjustments of the Conversion Rate which shall be as nearly equivalent as may
be practicable to the adjustments of the Conversion Rate provided for in this
Article 4.  The provisions of this
Section 4.10 shall similarly apply to successive Merger Events.


Section 4.11.  Other Adjustments.  Subject to applicable stock
exchange rules and listing standards, the Company shall be entitled to increase
the Conversion Rate by any amount for a period of at least 20 calendar days if
the Board of Directors determines that such increase would be in the best
interests in the Company, provided the
Company has given to Holders at least 15 calendar days’ prior notice, in
accordance with Section 14.02, of any such increase in the Conversion
Rate.  Subject to applicable stock
exchange rules and listing standards, the Company shall be entitled to increase
the Conversion Rate, in addition to the events requiring an increase in the
Conversion Rate pursuant to Section 4.07, as it, in its discretion, shall
determine to be advisable in order to avoid or diminish any tax to stockholders
in connection with any stock dividends, subdivisions of shares, distributions
of rights to purchase stock or securities or distributions of securities
convertible into or exchangeable for stock hereafter made by the Company to its
stockholders.


Section 4.12.  Notice of Adjustment.  Whenever the Conversion Rate or
conversion privilege is adjusted, the Company shall promptly mail to Holders of
a notice of the adjustment in accordance with Section 14.02, and file with the
Trustee an Officers’ Certificate briefly stating the Conversion Rate, the facts
requiring the adjustment and the manner of computing it.  Unless and until the Trustee shall receive an
Officers’ Certificate setting forth an adjustment of the Conversion Rate, the
Trustee may assume without inquiry that the Conversion Rate has not been
adjusted and that the last Conversion Rate of which it has knowledge remains in
effect.


Section 4.13.  Trustee’s Disclaimer.  The Trustee shall have no duty to
determine when an adjustment under this Article 4 should be made, how it should
be made or what such adjustment should be, but may accept as conclusive
evidence of that fact or the correctness of any such adjustment set forth in,
and shall be protected in relying upon, an Officers’ Certificate, including the
Officers’ Certificate with respect thereto which the Company is obligated to
file with the Trustee pursuant to Section 4.12. 
The Trustee makes no representation as to the validity or value of any
securities or assets issued upon conversion of Securities, and the Trustee
shall not be responsible for the Company’s failure to comply with any
provisions of this Article 4.



 48
 









The
Trustee shall not be under any responsibility to determine the correctness of
any provisions contained in any supplemental indenture executed pursuant to
Section 4.10, but may accept as conclusive evidence of the correctness thereof.


Section 4.14.  Settlement upon Conversion.


(a)   The Company may settle its conversion
obligation with respect to any Securities converted either in Common Stock
(plus Cash in lieu of fractional shares) or, in lieu thereof, Cash or a
combination of Cash and shares of Common Stock (plus Cash in lieu of fractional
shares). The Company shall inform the Holders through the Trustee of the method
it has chosen to satisfy its obligation upon conversion:


(i)    in respect of Securities to be converted on
or after the 22nd Scheduled Trading Day preceding the Maturity Date, no later
than 23 Scheduled Trading Days preceding the Maturity Date;


(ii)   in respect of Securities converted during the
period from and including the date the Company gives its Redemption Notice to
and including the Business Day immediately preceding the Redemption Date, in
the Redemption Notice; and


(iii)  in all other cases, no later than two Trading
Days following the Conversion Date.


(b)   If the Company does not give any notice
within the time periods described above as to how it will settle its conversion
obligation, the Company shall satisfy its conversion obligation only in shares
of Common Stock (and Cash in lieu of fractional shares pursuant to Section
4.01). If the Company chooses to satisfy any portion of its conversion
obligation in Cash, the Company shall specify the amount to be satisfied in
Cash as a percentage of the conversion obligation. The Company shall treat all
Holders converting on the same Trading Day in the same manner. Except with
respect to conversions described in this Section 4.14(a)(i) and (ii), the
Company shall not, however, have any obligation to settle its conversion
obligations arising on different Trading Days in the same manner.


(c)   If the Company elects to satisfy any portion
of its conversion obligation in Cash (other than Cash in lieu of fractional
shares pursuant to Section 4.01), a Holder may retract its conversion notice at
any time during the two Trading Day period beginning on the Trading Day after
the Company has notified the Trustee of the method of settlement (the “Conversion Retraction Period”). A Holder may not retract its
conversion notice if (i) such Holder is converting its Securities in connection
with a redemption; (ii) such Holder is converting its Securities on or after
the 22nd Scheduled Trading Day preceding the Maturity Date; or (iii) the
Company does not elect to satisfy any portion of its conversion obligation in
Cash (other than Cash in lieu of fractional shares pursuant to Section 4.01).


(d)   Settlement of Securities tendered for
conversion shall occur by delivery of the Settlement Amount on the date (the “Conversion Settlement Date”) that is (i) in the case of
settlement solely in shares of Common Stock (plus Cash in lieu of fractional
shares), on the third Trading Day following the Conversion Date and (ii) in the
case of settlement in Cash or a combination of Cash and shares of Common Stock
(other than Cash in lieu of fractional shares), on the second Trading Day following
the final Trading Day of the Cash Settlement Averaging Period.


(e)   The “Settlement Amount”
for Securities tendered for conversion shall be computed as follows:


(i)    If the Company elects to satisfy its entire
conversion obligation in shares of Common Stock, the Settlement Amount shall be
a number of shares of Common Stock equal to 



 49
 









(A) the aggregate
principal amount of Securities to be converted divided by 1,000 and multiplied by (2) the Applicable Conversion Rate; provided that Cash will be paid in lieu of any fractional
shares in accordance with Section 4.01.


(ii)   If the Company elects to satisfy its entire
conversion obligation in Cash, the Settlement Amount shall be Cash in an amount
equal to the product of: (A) a number equal to (x) the aggregate principal
amount of Securities to be converted divided by 1,000 and multiplied
by (y) the Applicable Conversion Rate and (B) the Applicable Stock
Price.


(iii)  If the Company elects to satisfy its
conversion obligation in a combination of Cash and shares of Common Stock, the
Settlement Amount shall be:


(A)  Cash in an amount equal to the percentage of
the conversion obligation to be paid in Cash multiplied
by the amount of Cash that would have been calculated pursuant to
clause (ii) above had the Company elected to satisfy its entire conversion
obligation in Cash (the “Cash Amount”);
and


(B)   a number of shares of Common Stock equal to
(x) (1) the aggregate principal amount of Securities to be converted divided by
1,000 and multiplied by (2) the Applicable
Conversion Rate minus (y) the Cash Amount divided
by the Applicable Stock Price; provided that
Cash will be paid in lieu of any fractional shares in accordance with Section
4.01.


(f)    If Securities are surrendered for conversion
after the Close of Business on an Interest Payment Record Date for the payment
of interest but prior to the corresponding Interest Payment Date, the Holder of
such Securities at the Close of Business on such Interest Payment Record Date
shall receive the interest payable on such Securities on the corresponding
Interest Payment Date notwithstanding the conversion, assuming such Holder was
the holder of record of such Securities at the Close of Business on such
Interest Payment Record Date; provided, however,
that each Holder agrees, by accepting a Security, that if the Holder surrenders
any Securities for conversion during such period, such Holder shall pay the
Company at the time such Holder surrenders its Securities for conversion
interest in accordance with the next sentence. 
Securities surrendered for conversion during the period from the Close
of Business on any Interest Payment Record Date to 9:00 a.m.,
New York City time, on the immediately following Interest Payment Date,
must be accompanied by funds equal to the amount of interest (including
Additional Interest, if any) payable on such Interest Payment Date on the
Securities so converted; provided
that no such payment need be made if (i) any overdue interest exists at the
time of conversion with respect to such Security, but only to the extent of the
amount of such overdue interest; (ii) Holders have surrendered their Securities
for conversion within the 10 Trading Days beginning on the Trading Day
immediately succeeding the date that the Company has delivered the Collateral
Trigger Price Notice; (iii) the Company has specified a Fundamental Change
Purchase Date in respect of the Securities that is after an Interest Payment
Record Date and on or prior to the corresponding Interest Payment Date; or (iv)
the Holder surrenders any Securities for conversion after the Close of Business
on the Interest Payment Record Date relating to the interest payment due on
August 1, 2012.


ARTICLE 5

COVENANTS


Section 5.01.  Payment of Securities.


 



 50















(a)   The Company shall promptly make all payments
in respect of the Securities on the dates and in the manner provided in the
Securities and this Indenture, including payments of Cash and shares of Common
Stock due upon conversion.  The principal
amount and Fundamental Change Purchase Price and accrued and unpaid interest
shall be considered paid on the date it is due if the Paying Agent holds by
10:00 a.m., New York City time, on such date, in accordance with this
Indenture, Cash designated and sufficient for the payment of all such amounts
then due.  The Company shall, to the
fullest extent permitted by law, pay interest on overdue principal and overdue
installments of interest at the rate borne by the Securities per annum.  Unless explicitly excluded, all references in
this Indenture or the Securities to interest shall be deemed to include
Additional Interest, if any, payable pursuant to the Registration Rights
Agreement.


(b)   The Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
amounts from time to time on demand at the rate then in effect; it shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful.  Interest shall initially
accrue on the Securities, as provided in the Securities, and this Indenture, at
the Initial Interest Rate, which interest rate is subject to reduction as
provided in Section 5.18, and shall be payable semi-annually in arrears on each
applicable Interest Payment Date to Holders of record on the relevant Interest
Payment Record Date.  Interest shall be
computed on the basis of a 360-day year of twelve 30-day months.


(c)   Each installment of accrued and unpaid
interest and Additional Interest, if any, on the Securities due on any Interest
Payment Date may be paid by mailing checks for the amount payable to or upon
the written order of the Holders entitled thereto as they shall appear on the
registry books of the Company, provided that,
with respect to any Holder with an aggregate principal amount in excess of
$2,000,000, at the application of such Holder in writing to the Registrar not
later than the relevant Interest Payment Record Date accrued and unpaid
interest and Additional Interest, if any, on such Holder’s Securities shall be
paid by wire transfer in immediately available funds to such Holder’s account
in the United States supplied by such Holder from time to time to the Trustee
and Paying Agent (if different from Trustee); provided
further that payment of accrued and unpaid interest and Additional
Interest, if any, made to the Depositary shall be paid by wire transfer in
immediately available funds in accordance with such wire transfer instructions
and other procedures provided by the Depositary from time to time.


Section 5.02.  Reports and Certain
Information.  (a) The Company
shall file with the Trustee, within 15 calendar days after the Company is
required to file with the SEC, copies of its annual report and the information,
documents and other reports which the Company is required to file with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act; provided that
any such reports, information or documents filed with the SEC pursuant to its
Electronic Date Gathering, Analysis and Retrieval (or EDGAR) system shall be
deemed filed with the Trustee.  The
Company shall comply with the provisions of TIA Section 314(a), whether or
not the Company is required to file reports with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act. 
Notwithstanding anything to the contrary herein, the Trustee shall have
no duty to review such documents for purposes of determining compliance with any
provisions of this Indenture or any applicable law.


(b)   At any time when the Securities are
Restricted Securities, and the Company is not subject to, or is not in
compliance with, Section 13 or 15(d) of the Exchange Act, upon the request
of a Holder or the holder of shares of Common Stock issued upon conversion of
Securities, the Company shall promptly furnish or cause to be furnished
Rule 144A Information (as defined below) to such Holder or such holder of
shares of Common Stock issued upon conversion of Securities, or to a
prospective purchaser of any such security designated by any such Holder or
holder, as the case may be, to the extent required to permit compliance by such
Holder or holder with Rule 144A under the Securities Act in connection
with 



 51
 









the resale of any such security.  “Rule 144A Information”
shall mean such information as is specified pursuant to Rule 144A(d)(4)
under the Securities Act or any successor provision.


(c)   The Company shall notify the Trustee of any
changes to its fiscal year.


Section 5.03.  Compliance Certificates.  The Company shall deliver to the
Trustee, within 120 calendar days after the end of each fiscal year of the
Company ending after the date hereof, an Officers’ Certificate signed by the
principal executive officer, principal financial officer or principal
accounting officer of the Company and at least one other Officer of the
Company, as to his or her knowledge of the Company’s compliance with all terms,
conditions and covenants under this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which he or she may have knowledge.


Section 5.04.  Maintenance of Corporate Existence.  The Company shall do or cause to
be done all things necessary to preserve and keep in full force and effect its
corporate existence or, following any consolidation, merger, conveyance,
transfer or lease in accordance with Section 7.01, its legal existence as a
Person permitted to be the resulting, surviving or transferee Person in
accordance with Section 7.01.


Section 5.05.  Stay, Extension and Usury
Laws.  The Company covenants,
to the extent it may lawfully do so, that it shall not at any time insist upon,
plead or in any manner whatsoever claim or take the benefit or advantage of any
stay, extension or usury law or other law which would prohibit or forgive the
Company from paying all or any portion of the principal amount or Fundamental
Change Purchase Price in respect of Securities, or any interest (including any
Additional Interest) on the Securities as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture, and the Company, to the extent
it may lawfully do so, hereby expressly waives all benefit or advantage of any
such law and covenants that it shall not, by resort to any such law, hinder,
delay or impede the execution of any power herein granted to the Trustee or any
Agent, but shall suffer and permit the execution of every such power as though
no such law had been enacted.


Section 5.06.  Maintenance of Office or
Agency of the Trustee, Registrar, Paying Agent and Conversion Agent.  The Company shall maintain an
office or agency of the Trustee, Registrar, Paying Agent and Conversion Agent
in the United States where Securities may be presented or surrendered for
payment, where Securities may be surrendered for registration of transfer,
exchange, purchase or conversion and where notices and demands to or upon the
Company in respect of the Securities and this Indenture may be served.  The Company hereby designates the Corporate
Trust Office as one such office or agency for all of the aforesaid
purposes.  The Company shall give prompt
written notice to the Trustee of the location, and of any change in the
location, of any such office or agency (other than a change in the location of
the Corporate Trust Office of the Trustee). 
If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at
the address of the Trustee set forth in Section 14.02.


Section 5.07.  Notice of Default.  In the event that any Default or
Event of Default shall occur, the Company shall give prompt (and in any event
within 30 calendar days after the Company becomes aware of such Default or
Event of Default) written notice by an Officers’ Certificate of such Default or
Event of Default, and any remedial action proposed to be taken, to the Trustee.


Section 5.08.  Additional Interest Notice.  In the event that the Company is required to
pay Additional Interest to the Holders pursuant to the Registration Rights
Agreement, the Company will provide written notice (“Additional
Interest Notice”) to the Trustee of its obligation to pay Additional




 52
 









Interest no later than 15 calendar days prior to the
proposed payment date for the Additional Interest, and the Additional Interest
Notice shall set forth the amount of Additional Interest to be paid by the
Company on such payment date.  The
Trustee shall not at any time be under any duty or responsibility to any
Holders to determine the Additional Interest, or with respect to the nature,
extent or calculation of the amount of Additional Interest when made, or with
respect to the method employed in such calculation of the Additional Interest.


Section 5.09.  Ownership in Evergreen
Operations.  All of the Equity
Interests of Evergreen Operations will at all times be 100% directly owned by
the Company.


Section 5.10.  Limitation on Debt and
Disqualified or Preferred Stock.  (a)
The Company shall not, and shall not permit any Subsidiary Guarantor to, Incur
any Debt, and shall not permit any of the Subsidiary Guarantors to Incur any
Disqualified Stock and Preferred Stock.


(b)   Notwithstanding the foregoing, the Company
and any Subsidiary Guarantor may Incur the following (“Permitted
Debt”):


(i)    Debt to the Company so long as such Debt
continues to be owed to the Company;


(ii)   Debt pursuant to the Securities;


(iii)  Debt (“Permitted Refinancing Debt”)
constituting an extension or renewal of, replacement of, or substitution for,
or issued in exchange for, or the net proceeds of which are used to repay,
redeem, repurchase, refinance or refund, including by way of defeasance (all of
the above, for purposes of this clause, “refinance”)
then outstanding Debt in an amount not to exceed the principal amount of the
Debt so refinanced, plus premiums, fees and expenses; provided
that


(A)  in case the Securities are refinanced in part
or the Debt to be refinanced is pari passu with
the Securities, the new Debt, by its terms or by the terms of any agreement or
instrument pursuant to which it is outstanding, is expressly made pari passu with, or subordinate in right of payment to, the
remaining Securities,


(B)   in case the Debt to be refinanced is
subordinated in right of payment to a Subsidiary Guarantee, the new Debt, by
its terms or by the terms of any agreement or instrument pursuant to which it
is outstanding, is expressly made subordinate in right of payment to the
Subsidiary Guarantee at least to the extent that the Debt to be refinanced is
subordinated to the Subsidiary Guarantee,


(C)   the new Debt does not have a Stated Maturity
prior to the Stated Maturity of the Debt to be refinanced, and the Average Life
of the new Debt is at least equal to the remaining Average Life of the Debt to
be refinanced, and


(D)  Debt Incurred pursuant to clauses (i), (iv)
and (v) may not be refinanced pursuant to this clause;


(iv)  Hedging Agreements entered into in the
ordinary course of business for the purpose of limiting risks associated with
its business and not for speculation;


(v)   Debt with respect to letters of credit and
bankers’ acceptances issued in the ordinary course of business and not
supporting Debt, including letters of credit supporting 



 53
 









performance, surety or
appeal bonds or indemnification, adjustment of purchase price or similar
obligations incurred in connection with the acquisition or disposition of any
business or assets;


(vi)  Debt outstanding on the Issue Date;


(vii) Debt, which may include Capital Leases,
Incurred on or after the Issue Date no later than 365 calendar days after the
date of purchase or completion of construction or improvement of property for
the purpose of financing all or any part of the purchase price or cost of
construction or improvement, provided that
the principal amount of any Debt Incurred pursuant to this clause in any
twelve-month period may not exceed (a) $5.0 million less (b) the aggregate
outstanding amount of Permitted Refinancing Debt Incurred to refinance Debt
Incurred pursuant to this clause; or


(viii)                Debt Incurred on or after the
Issue Date not otherwise permitted in an aggregate principal amount at any time
outstanding not to exceed $3.5 million for the Company and all Subsidiary
Guarantors collectively.


Section 5.11.  Limitation on Restricted
Payments.  (a) The Company
shall not directly or indirectly declare or pay any dividend or make any
distribution on its Equity Interests or purchase, redeem or otherwise acquire
or retire for value any Equity Interests of the Company (such payments and
actions, if made, “Restricted Payments”).


(b)   Provided that no Default has occurred and is
continuing or would occur as a result of this clause (b), clause (a) shall not
prohibit:


(i)    the purchase, redemption or other
acquisition or retirement for value of Equity Interests of the Company held by
officers, directors or employees or former officers, directors or employees (or
their estates or beneficiaries under their estates), upon death, disability,
retirement, severance or termination of employment or pursuant to any agreement
under which the Equity Interests were issued; provided
that the aggregate Cash consideration paid therefor in any twelve-month period
after the Issue Date does not exceed an aggregate amount of $2.0 million; or


(ii)   the cashless exercise of outstanding options
or warrants on Equity Interests of the Company.


(c)   Not later than the date of making any
Restricted Payment, the Company will deliver to the Trustee an Officers’
Certificate stating that the Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this Section 5.11 were
calculated.


Section 5.12.  Limitation on Liens.  The Company shall not, and shall
not permit any Subsidiary Guarantor to, directly or indirectly, Incur or permit
to exist any Lien of any nature whatsoever on any of its properties or assets,
whether owned at the Issue Date or thereafter acquired, to secure Debt or other
obligations that are pari passu with
or subordinated in right of payment to the Subsidiary Guarantees, to secure
Debt or trade payables other than Permitted Liens, without effectively
providing that the Subsidiary Guarantees are secured equally and ratably with
(or, if the obligation to be secured by the Lien is subordinated in right of
payment to a Subsidiary Guarantee, prior to) the obligations so secured for so
long as such obligations are so secured.


Section 5.13.  Limitation on Asset
Sales.  (a) The Company shall
not, and shall not permit any Subsidiary Guarantor to, make any Asset Sale
unless the following conditions are met:



 54
 









(i)    The Asset Sale is for fair market value, as
determined in good faith by the Board of Directors except in connection with a
condemnation proceeding.


(ii)   At least 90% of the consideration consists of
Cash received at closing. (For purposes of this clause (ii), the assumption by
the purchaser of Debt or other obligations (other than Subordinated Debt) of
the Company or such Subsidiary Guarantor pursuant to a customary novation
agreement, and instruments or securities received from the purchaser that are
promptly, but in any event within 30 calendar days of the closing, converted by
the Company to Cash, to the extent of the Cash actually so received, shall be
considered Cash received at closing.)


(iii)  Within 365 calendar days after the receipt of
any Net Cash Proceeds from an Asset Sale, the Net Cash Proceeds may (A) be used
to acquire all or substantially all of the assets of a Permitted Business, (B)
be used to make capital expenditures or otherwise acquire long-term assets that
are to be used in a Permitted Business or (C) be contractually committed for
use in accordance with either (A) or (B) with the acquisition or expenditure to
be completed within two years after the receipt of such Net Cash Proceeds.  All assets acquired pursuant to this clause
(iii) shall be assets of one or more Subsidiary Guarantors.


(iv)  The Net Cash Proceeds of an Asset Sale not
applied or contractually committed pursuant to clause (iii) within 365 calendar
days of the Asset Sale constitute “Excess Proceeds”.  Excess Proceeds of less than $5 million will
be carried forward and accumulated. When accumulated Excess Proceeds equals or
exceeds $5 million, the Company must, within 30 calendar days, make an Offer to
Purchase Securities having a principal amount equal to


(A)  accumulated Excess Proceeds, multiplied by


(B)   a fraction (x) the numerator of which is
equal to the outstanding principal amount of the Securities and (y) the
denominator of which is equal to the outstanding principal amount of the
Securities and all pari passu Debt
similarly required to be repaid, redeemed or tendered for in connection with
the Asset Sale,


rounded down to the
nearest $1,000. The purchase price for the Securities will be the greater of
(1) the principal amount plus accrued interest to the date of purchase and (2)
the value of the shares of Common Stock a converting Holder would receive if
the Holder converted under a Make-whole Fundamental Change pursuant to Section
4.03. If the Offer to Purchase is for less than all of the outstanding
Securities and Securities in an aggregate principal amount in excess of the
purchase amount are tendered and not withdrawn pursuant to such Offer to
Purchase, the Company shall purchase Securities having an aggregate principal
amount equal to the purchase amount on a pro rata basis, with adjustments so
that only Securities in multiples of $1,000 principal amount shall be
purchased. Upon completion of the Offer to Purchase, Excess Proceeds will be
reset at zero, and any Excess Proceeds remaining after consummation of the
Offer to Purchase may be used for any purpose not otherwise prohibited by this
Indenture.


(v)   Between the time of receipt of any Net Cash
Proceeds from an Asset Sale and the earlier of (A) the time of transfer of such
Net Cash Proceeds in connection with acquisitions or capital expenditures
pursuant to (iii) above and (B) the time of purchase of Securities in
connection with an Offer to Purchase pursuant to (iv) above, such Net Cash
Proceeds shall be held in an account as security and held for the benefit of
the Holders.


(b)   An “Offer to Purchase”
must be made by written offer, which will specify the principal amount of
Securities subject to the offer and the purchase price.  The Offer to Purchase must specify an 



 55
 









expiration date (the “Expiration
Date”) not less than 30 calendar days or more than 60 calendar days
after the date of the Offer to Purchase and a settlement date for purchase (the
“Purchase Date”) not more than five
Business Days after the Expiration Date. 
The Offer to Purchase must include information concerning the business
of the Company and its Subsidiaries which the Company in good faith believes
will enable the Holders to make an informed decision with respect to the Offer
to Purchase.  The Offer to Purchase shall
also contain instructions and materials necessary to enable Holders to tender
Securities pursuant to the Offer to Purchase.


(c)   A Holder may tender all or any portion of its
Securities pursuant to an Offer to Purchase, subject to the requirement that
any portion of a Security tendered must be in a multiple of $1,000 principal
amount.  Holders are entitled to withdraw
Securities tendered up to the Close of Business on the Expiration Date.  On the Purchase Date, the purchase price will
become due and payable on each Security accepted for purchase pursuant to the Offer
to Purchase, and interest on the Securities purchased shall cease to accrue on
and after the Purchase Date.


(d)   The Company shall comply with Rule 14e-1
under the Exchange Act and all other applicable laws in making any Offer to
Purchase, and the above procedures shall be deemed modified as necessary to
permit such compliance.


Section 5.14.  Termination of Certain
Covenants.  Upon the
satisfaction of the Collateral Price Trigger, the Company shall no longer be
subject to the covenants imposed pursuant to Sections 5.09, 5.10, 5.11, 5.12
and 5.13.


Section 5.15.  Release of Security
Interests.  (a) The
first-priority security interests on the Collateral for the benefit of the
Holders shall be released: (i) upon payment in full of principal, interest and
all other Obligations on the Securities or discharge or defeasance thereof;
(ii) in accordance with Section 5.17; or (iii) in connection with any
disposition of Collateral to any Person other than the Company or any of its
Subsidiaries that is permitted by this Indenture, including expenditures of
Cash and Cash equivalents maintained in pledged accounts.  Each of these releases shall be effected by
the Collateral Agent or automatically, as applicable, without the consent of
the Holders of Securities or any action on the part of the Trustee.


(b)   To the extent applicable, the Company shall
comply with Section 313(b) of the TIA, relating to reports, and other sections
of the TIA, as applicable. Notwithstanding anything to the contrary herein, the
Company and its Subsidiaries will not be required to comply with all or any
portion of Section 314(d) of the TIA if the Company determines, in good faith
based on advice of outside counsel, that under the terms of that section and/or
any interpretation or guidance as to the meaning thereof of the SEC and its
staff, including “no action” letters or exemptive orders, all or any portion of
Section 314(d) of the TIA is inapplicable to the released Collateral.


Section 5.16.  No Impairment of The Security
Interests.  Neither the
Company nor any of its Subsidiaries shall be permitted to take any action, or
knowingly or negligently omit to take any action, which action or omission
might or would have the result of materially impairing the security interest
with respect to the Collateral for the benefit of the Trustee and the
Holders.  Any release of Collateral in
accordance with the provisions of this Indenture and the Security Documents
shall not be deemed to impair the security herein, and any engineer or
appraiser may rely on such provision in delivering a certificate requesting
release so long as all other provisions of this Indenture with respect to such
release have been complied with.


Section 5.17.  Release of Collateral.



 56
 









(a)   The first-priority security interests in the
Collateral shall be released if (i) the Closing Price of the Common Stock for
at least 20 Trading Days in any 30 consecutive Trading Day period is at least
130% of the Applicable Conversion Price per share and (ii) the shelf
registration statement covering resales of the Securities is effective and
available for use pursuant to the terms of the Registration Rights Agreement
for at least 30 calendar days following the date of the Company gives its
Collateral Price Trigger Notice in accordance with clause (b) below, unless
registration is no longer required (upon the occurrence of clauses (i) and
(ii), the “Collateral Price Trigger”)


(b)   The Company shall provide notice (the “Collateral Price Trigger Notice”) to Holders and the Trustee
via Bloomberg and by posting on the Company’s website within one Trading Day
upon the occurrence of the Collateral Price Trigger.  In such Collateral Price Trigger Notice, the
Company shall state whether it is exercising its right to redeem pursuant to
Section 3.01.


Section 5.18.  Interest Rate Reduction.


(a)   The Initial Interest Rate shall be
permanently reduced to the Reduced Interest Rate if (i) the Closing Price of
the Common Stock for at least 20 Trading Days in any 30 consecutive Trading Day
period is equal to or greater than the Applicable Conversion Price per share on
such Trading Day (the “Reduced Interest Rate
Trigger”) and (ii) the shelf registration statement covering resales
of the Securities is effective and available for use pursuant to the terms of
the Registration Rights Agreement for at least 30 calendar days following the
Reduced Interest Rate Trigger, unless registration is no longer required (upon
the occurrence of clauses (i) and (ii), the “Interest
Rate Reduction”).


(b)   The
Reduced Interest Rate shall become effective on the first day of the calendar
quarter following the date of the Interest Rate Reduction.


ARTICLE 6

COLLATERAL


Section 6.01.  Collateral.


(a)   Upon execution of this Indenture and in
accordance with the terms of the Security Agreement, the Company hereby grants
to the Collateral Agent for the benefit of the Holders a first-priority
security interest in all of the Equity Interests in Evergreen Operations.


(b)   In accordance with the terms of the Security
Agreement and within 90 calendar days of the Issue Date, the Company shall
grant, and shall cause the Subsidiaries to grant, to the Collateral Agent for
the benefit of the Holders a first-priority security interest in the Company’s
and such Subsidiaries’ existing and future bank, investment, brokerage or other
accounts holding Cash and Cash equivalents, except for (i) accounts holding in
the aggregate Cash and Cash equivalents of less than $1.5 million, (ii) any
such account created in connection with one or more Projects and (iii) any
account holding Cash that has been posted, segregated or otherwise set aside in
connection with certain regulatory and contractual obligations, including
environmental remediation.  The Company
shall provide an Officers’ Certificate to the Trustee certifying compliance
with this Section 6.01(b) within 90 calendar days of the Issue Date.


(c)   On the Issue Date, the Company shall deposit,
or cause to be deposited, $18 million in an account in the name of, and under
the exclusive control of, the Collateral Agent (the “Cash Collateral
Account”) that shall be operated and maintained in accordance with
the Security Agreement.  Upon execution
of this Indenture, the Company hereby grants to the Collateral Agent for the
benefit of the 



 57
 









Holders a first-priority Lien in the Cash Collateral
Account (this first-priority security interest, together with the
first-priority security interests described in clauses (a) and (b) above, the “Collateral”).


(d)   Upon the occurrence and during the
continuance of an Event of Default, the Trustee and the Collateral Agent shall
have the right to exercise on behalf of the Holders such remedies, including
remedies with respect to all Collateral as are available under this Indenture,
the Security Documents and at law. The Trustee shall determine (or shall follow
the direction of the Holders of a majority in principal amount of the
outstanding Securities in establishing) the circumstances and manner in which
to dispose of Collateral, including, but not limited to, the determination of
whether to foreclose on such Collateral following an Event of Default.


(e)   Any proceeds of any Collateral foreclosed
upon or otherwise realized upon pursuant to the Security Documents shall be
applied in the following order:


(i)    first, to the Collateral Agent and the
Trustee to pay any costs and expenses due to them in connection with the
foreclosure or realization of such Collateral;


(ii)   second, to the Trustee for the benefit of the
Holders to pay all amounts due in respect of the Securities;


finally,
in the case of any surplus, to the Company, the Subsidiary Guarantors or their
respective successors or assigns.


ARTICLE 7

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE


Section 7.01.  Company May Consolidate, Etc.,
Only on Certain Terms.  The
Company shall not consolidate with or merge into any other Person or convey,
transfer or lease all or substantially all of the Company’s properties and
assets to any successor Person, unless:


(a)   either:


(i)    the resulting, surviving or transferee
Person is the Company; or


(ii)   the resulting, surviving or transferee Person
is a corporation, limited liability company, partnership or trust organized and
validly existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form reasonably
satisfactory to the Trustee, all of the obligations of the Company under the
Securities and this Indenture;


(b)   immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing; and


(c)   the Company has delivered to the Trustee an
Officers’ Certificate and an Opinion of Counsel (upon which the Trustee may
conclusively rely), each stating that such consolidation, merger, conveyance,
transfer or lease and, if a supplemental indenture is required in connection
with such transaction, such supplemental indenture comply with this Article 7
and that all conditions precedent herein provided for relating to such
transaction have been complied with.



 58
 









Section 7.02.  Successor Substituted.  Upon any consolidation of the
Company with, or merger of the Company into, any other Person or any
conveyance, transfer or lease of all or substantially all of the properties and
assets of the Company in accordance with Section 7.01, the successor Person
formed by such consolidation or into which the Company is merged or to which
such conveyance, transfer or lease is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this
Indenture with the same effect as if such successor Person had been named as
the Company herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all Obligations under this Indenture
and the Securities.


ARTICLE 8

DEFAULT AND REMEDIES


Section 8.01.  Events of Default.  An “Event of
Default” shall occur if:


(a)   the Company defaults in the payment of any
principal of any of the Securities when the same becomes due and payable (whether
at maturity, on a Fundamental Change Purchase Date or otherwise), whether or
not such payment is prohibited by the subordination provisions set forth in
Article 10;


(b)   the Company defaults in the payment of any
accrued and unpaid interest (including Additional Interest, if any) when due
and payable, and such default continues for a period of 30 calendar days,
whether or not such payment is prohibited by the subordination provisions set
forth in Article 10;


(c)   the Company fails to deliver the Settlement
Amount when due upon conversion of any Securities, and such default continues
for 10 calendar days;


(d)   the Company fails to provide the Fundamental
Change Company Notice or Make-Whole Fundamental Change Notice, in each
case when required by this Indenture;


(e)   the Company fails to comply with its
obligation described in Section 6.01;


(f)    the Company fails to comply with any of its
other agreements contained in the Securities or in this Indenture (other than a
covenant or warranty or default whose performance or breach is elsewhere in
this Section 8.01 specifically provided for) upon receipt of a Notice of
Default, and the Company’s failure to cure (or obtain a waiver of) such default
within 30 calendar days after the Company receives such Notice of Default; provided, however, that the Company shall have 60 calendar
days after receipt of a Notice of Default to remedy, or receive a waiver for,
any failure to comply with the Company’s obligation to file annual, quarterly
and current reports in accordance with this Indenture or to comply with the
requirements of Section 314(a)(1) of the TIA, so long as the Company is
attempting to cure such failure as promptly as reasonably practicable;


(g)   (i) the Company fails to make any payment by
the end of any applicable grace period after maturity of principal and/or
accrued interest with respect to any Obligations (other than nonrecourse
Obligations) of the Company for borrowed money or evidenced by bonds, notes or
similar instruments (“Specified  Indebtedness”) (or the payment of which is Guaranteed by the
Company or a Subsidiary of the Company), where the amount of such unpaid and
due principal and/or accrued interest is in an aggregate amount in excess of
$25.0 million, or (ii) the acceleration of principal and/or accrued
interest with respect to Specified Indebtedness, where the amount of such
accelerated principal and interest is in an amount in excess of
$25.0 million because of a default with respect to such Specified
Indebtedness, in any such case of (i) or (ii), without such Specified
Indebtedness having been paid or discharged or such 



 59
 









acceleration having been cured, waived, rescinded or
annulled within a period of 30 calendar days after receipt by the Company of a
Notice of Default.  However, if any such
failure or acceleration referred to in (i) or (ii) of this clause (g) shall
cease or be cured, waived, rescinded or annulled, then the Event of Default by
reason thereof shall be deemed not to have occurred and any acceleration as a
result of the related Event of Default shall be automatically rescinded;


(h)   except as otherwise permitted by this
Indenture, any Subsidiary Guarantee is held in any judicial proceeding to be
unenforceable or invalid or ceases for any reason to be in full force and
effect or any Subsidiary Guarantor, or any Person acting on behalf of any
Subsidiary Guarantor, denies or disaffirms its obligations under the Guarantee;


(i)    the Company, or any Significant Subsidiary,
including the Subsidiary Guarantors, pursuant to or within the meaning of any
Bankruptcy Law commences a voluntary case or proceeding, consents to the entry
of an order for relief against it in an involuntary case or proceeding or the
commencement of any case against it, consents to the appointment of a Custodian
of it or for any substantial part of its property, or makes a general
assignment for the benefit of its creditors; or


(j)    a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that is for relief against the Company
or any Significant Subsidiary, including the Subsidiary Guarantors, in an
involuntary case or proceeding appoints a Custodian of the Company or any
Significant Subsidiary, including the Subsidiary Guarantors, for any
substantial part of the property of the Company or such Significant Subsidiary
or orders the winding up or liquidation of the Company or any Significant
Subsidiary, including the Subsidiary Guarantors, and in each case of this
subclause (j) the order or decree remains unstayed and in effect for
60 consecutive days.


The
term “Bankruptcy Law” means Title 11 of
the United States Code (or any successor thereto) or any similar federal or
state law for the relief of debtors.  The
term “Custodian” means any receiver, trustee,
assignee, liquidator, sequestrator or similar official under any Bankruptcy
Law.


A
default under clause (f) or (g) above is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 25% in aggregate
principal amount of the Securities then outstanding notify the Company and the
Trustee, in writing of the Default, and the Company does not cure the Default
(and such Default is not waived) within the time period specified in
clauses (f) or (g) above, as applicable, after actual receipt of such
notice.  The notice given pursuant to
this Section 8.01 must specify the Default, demand that it be remedied and
state that the notice is a “Notice of Default.”  When any Default under this Section 8.01 is
cured in accordance herewith, it shall cease to be a Default.


The
Trustee shall not be charged with knowledge of any Event of Default unless
written notice thereof shall have been given to a Trust Officer at the
Corporate Trust Office of the Trustee by the Company (including, without
limitation, pursuant to Section 5.03), a Paying Agent, any Holder or any agent
of any Holder, which notice references the Securities and this Indenture.


Section
8.02.  Acceleration.  If an Event of Default (other than an Event
of Default with respect to the Company specified in clauses (i) or (j) of
Section 8.01) occurs and is continuing, the Trustee may, by notice to the
Company, or the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding may, by notice to the Company and the Trustee,
declare all unpaid principal of, plus interest (including Additional Interest,
if any) accrued and unpaid through the date of such declaration on, all the
Securities then outstanding to be due and payable upon any such declaration,
and the same shall thereupon become and be immediately due and payable.



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If
an Event of Default with respect to the Company specified in clause (i) or
(j) of Section 8.01 occurs, all unpaid principal of, plus interest (including
Additional Interest, if any) accrued and unpaid through the date of such
default on, all the Securities then outstanding shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.


The
Holders of a majority in aggregate principal amount of the Securities then
outstanding or the Holders originally causing the acceleration by notice to the
Trustee may rescind an acceleration of Securities and its consequences before a
judgment or decree for the payment of money has been obtained by the Trustee if
(a) the rescission would not conflict with any existing order or decree,
(b) all existing Events of Default, other than the nonpayment of the
principal of, plus accrued and unpaid interest on, the Securities that has
become due solely by such declaration of acceleration, have been cured or
waived and (c) all payments due to the Trustee and any predecessor Trustee
under Section 9.06 have been made.  No
such rescission shall affect any subsequent Default or impair any right
consequent thereto.


Section 8.03.  Other Remedies.  If an Event of Default occurs and
is continuing, the Trustee may, but shall not be obligated to, pursue any
available remedy by proceeding at law or in equity to collect the payment of
the principal of or accrued and unpaid interest on the Securities, the payment
of Cash and, if applicable, shares of Common Stock upon conversion or to
enforce the performance of any provision of the Securities or this Indenture.


The
Trustee may maintain a proceeding even if it does not possess any of the
Securities or does not produce any of them in the proceeding.  A delay or omission by the Trustee or any
Holder in exercising any right or remedy accruing upon an Event of Default
shall not impair the right or remedy or constitute a waiver of or acquiescence
in the Event of Default.  No remedy is
exclusive of any other remedy.  All
available remedies are cumulative to the extent permitted by law.


Section 8.04.  Waiver of Defaults and Events
of Default.  Subject to
Section 8.07 and Section 11.02, the Holders of a majority in aggregate
principal amount of the Securities then outstanding by notice to the Trustee
may waive an existing or future Default or Event of Default and its
consequences, except a Default or Event of Default in the payment of the
principal of, or any interest (including Additional Interest, if any) on any
Security, or the payment of any applicable Fundamental Change Purchase Price,
or a failure by the Company to deliver shares of Common Stock (and Cash in lieu
of any fractional shares) upon conversion in accordance with Article 4 or any
Default or Event of Default in respect of any provision of this Indenture or
the Securities that, under Section 11.02, cannot be modified or amended without
the consent of the Holders of each outstanding Security.  When a Default or Event of Default is waived,
it is deemed cured, but no such waiver shall extend to any subsequent or other
Default or impair any consequent right. 
This Section 8.04 shall be in lieu of Section 316(a)(1)(B) of the
TIA and such Section 316(a)(1)(B) is hereby expressly excluded from this
Indenture, as permitted by the TIA.


Section 8.05.  Control by Majority.  The Holders of a majority in
aggregate principal amount of the Securities then outstanding may direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on it under this
Indenture.  However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture, that
the Trustee determines may be unduly prejudicial to the rights of another
Holder or the Trustee, or that may involve the Trustee in personal liability
unless the Trustee is offered security or indemnity reasonably satisfactory to
it; provided that the Trustee may take any
other action deemed proper by the Trustee which is not inconsistent with such
direction.  This Section 8.05 shall be in
lieu of Section 316(a)(1)(A) of the TIA and such Section 316(a)(1)(A)
is hereby expressly excluded from this Indenture, as permitted by the TIA.



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Section 8.06.  Limitations on Suits.  Subject to Section 8.07, a Holder
may not pursue any remedy with respect to this Indenture or the Securities
unless:


(a)   the Holder has previously given the Trustee
written notice of a continuing Event of Default;


(b)   the Holders of at least 25% in aggregate
principal amount of the then outstanding Securities make a written request to
the Trustee to pursue the remedy;


(c)   such Holder or Holders offer to the Trustee
security or indemnity reasonably satisfactory to the Trustee against any loss,
liability or expense;


(d)   the Trustee does not comply with the request
within 60 calendar days after receipt of the notice, request and the offer of
security or indemnity; and


(e)   no direction inconsistent with such written
request has been given to the Trustee during such 60-day period by the Holders
of a majority in aggregate principal amount of the Securities then outstanding.


A
Holder may not use this Indenture to prejudice the rights of another Holder or
to obtain a preference or priority over such other Holder.


Section 8.07.  Rights of Holders to Receive
Payment and to Convert.  Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment in Cash of the principal amount, Fundamental Change Purchase Price or
interest (including Additional Interest, if any) on any Security, on or after
the respective due dates expressed in the Security and this Indenture, receive
shares of Common Stock (and Cash in lieu of fractional shares) upon conversion
in accordance with Article 4 and to bring suit for the enforcement of any such
payment on or after such respective dates or the right to convert, is absolute
and unconditional and shall not be impaired or affected without the consent of
the Holder.


Section 8.08.  Collection Suit by
Trustee.  If an Event of
Default in the payment of principal or interest or Additional Interest
specified in clause (a) or (b) of Section 8.01 occurs and is continuing,
the Trustee may recover judgment in its own name and as trustee of an express
trust against the Company or another obligor on the Securities for the whole
amount owing with respect to the Securities and the amounts provided for in
Section 9.06.


Section 8.09.  Trustee May File Proofs of
Claim.  The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and the Holders allowed in any judicial
proceedings relative to the Company (or any other obligor on the Securities),
its creditors or its property and shall be entitled and empowered to collect
and receive any money or other property payable or deliverable on any such
claims and to distribute the same, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 9.06, and to the extent that such payment of the reasonable
compensation, expenses, disbursements and advances in any such proceedings
shall be denied for any reason, payment of the same shall be secured by a lien
on, and shall be paid out of, any and all distributions, dividends, money,
securities and other property which the Holders may be entitled to receive in
such proceedings, whether in liquidation or under any plan of reorganization or
arrangement or 



 62
 









otherwise. 
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or, on behalf of any Holder, to authorize, accept or
adopt any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof, or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.


Section 8.10.  Priorities.  Any money or property collected by
the Trustee pursuant to this Article 8, and after an Event of Default, any
money or other property distributable in respect of the Company’s obligations
under this Indenture shall be paid out in the following order:


First,
to the Trustee (including any predecessor Trustee) for amounts due under
Section 9.06;


Second,
to Holders for amounts due and unpaid on the Securities for the principal
amount, interest (including Additional Interest, if any), the Fundamental
Change Purchase Price, amounts due upon conversion (including amounts resulting
from a Make-Whole Fundamental Change), as the case may be, ratably, without
preference or priority of any kind, according to such amounts due and payable
on the Securities; and


Third,
the balance, if any, to the Company.


The
Trustee may fix a record date and payment date for any payment to Holders
pursuant to this Section 8.10.  At least
15 calendar days before such record date, the Trustee shall mail to each Holder
and the Company a notice that states the record date, the payment date and the
amount to be paid.


Section 8.11.  Undertaking for Costs.  In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys’ fees and expenses, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. 
This Section 8.11 does not apply to a suit made by the Trustee, a suit
by a Holder pursuant to Section 8.07, or a suit by Holders of more than 10% in
aggregate principal amount of the Securities then outstanding.


Section 8.12.  Delay or Omission Not
Waiver.  No delay or omission
of the Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence
therein.  Every right and remedy given by
this Article 8 or by law to the Trustee or to the Holders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.


ARTICLE 9

TRUSTEE


Section 9.01.  Certain Duties and
Responsibilities of Trustee.  (a) In
case an Event of Default with respect to the Securities has occurred (that has
not been cured or waived), the Trustee shall exercise with respect to the
Securities such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.


(b)   Prior to the occurrence of an Event of
Default with respect to the Securities and after the curing or waiving of all
such Events of Default with respect to the Securities that may have occurred:



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(i)    the duties and obligations of the Trustee
shall with respect to the Securities be determined solely by the express
provisions of this Indenture, and the Trustee shall not be liable with respect
to the Securities except for the performance of such duties and obligations as
are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and


(ii)   in the absence of bad faith on the part of
the Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such certificates or
opinions that by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform on their face to the requirements of this
Indenture (but need not confirm or investigate the accuracy of any mathematical
calculations or other facts stated therein).


(c)   No provision of this Indenture shall be
construed to relieve the Trustee from liability for its own negligent action,
its own negligent failure to act, or its own willful misconduct, except that:


(i)    this subsection shall not be construed to
limit the effect of Section 9.01(b);


(ii)   the Trustee shall not be liable for any error
of judgment made in good faith by a Trust Officer or Trust Officers, unless it
shall be proved that the Trustee was negligent in ascertaining the pertinent
facts;


(iii)  the Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a majority in principal
amount of the Securities at the time outstanding (determined as provided in
Section 2.08) relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee under this Indenture with respect to the
Securities; and


(iv)  none of the provisions contained in this
Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur personal financial liability, loss or expense in the
performance of any of its duties or in the exercise of any of its rights or
powers, if there is reasonable ground for believing that the repayment of such
funds or liability is not reasonably assured to it under the terms of this
Indenture or adequate indemnity against such risk is not reasonably assured to
it.


(d)   Whether or not expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
or affording protection to the Trustee (in any capacity, including Collateral
Agent, Paying Agent, Registrar or Conversion Agent) shall be subject to the
provisions of this Section 9.01.


(e)   The Trustee shall not be liable for interest
in any money received by it except as the Trustee may agree in writing with the
Company.  Money held in trust by the
Trustee need not be segregated from other funds except to the extent required
by law.


Section 9.02.  Certain Rights of
Trustee.  Except as otherwise
provided in Section 9.01:


(a)   The Trustee may conclusively rely and shall
be fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent, 



 64
 









order, approval, bond, security or other paper or
document (whether in original or facsimile form) believed by it in good faith
to be genuine and to have been signed or presented by the proper party or
parties.  The Trustee need not
investigate any fact or matter stated in any such document;


(b)   Any request, direction, order or demand of
the Company mentioned herein shall be sufficiently evidenced by a resolution of
the Company’s Board of Directors or an instrument signed in the name of the
Company, by one or more Officers thereof (unless other evidence in respect
thereof is specifically prescribed herein);


(c)   Before the Trustee acts or refrains from
acting, it may require an Officers’ Certificate or an Opinion of Counsel or
both.  The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
Officers’ Certificate or Opinion of Counsel. 
The Trustee may consult with counsel of its own selection and the advice
of such counsel and Opinions of Counsel with respect to legal matters relating
to this Indenture and the Securities shall be full and complete authorization
and protection from liability in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;


(d)   The Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Indenture at the
request, order or direction of any of the Holders, pursuant to the provisions
of this Indenture, unless such Holders shall have offered to the Trustee
security or indemnity reasonably satisfactory to it against the costs, expenses
and liabilities that may be incurred therein or thereby;


(e)   The Trustee shall not be liable for any
action taken or omitted to be taken by it in good faith and believed by it to
be authorized or within the discretion or rights or powers conferred upon it by
this Indenture;


(f)    The Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond, security, or other papers or documents, but the Trustee, in its
discretion, may make even further inquiry or investigation into such facts or
matters as it may see fit; and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney at the
sole cost of the Company and shall incur no liability or additional liability
of any kind by reason of such inquiry or investigation;


(g)   The Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed with
due care by it hereunder;


(h)   The Trustee shall not be deemed to have
knowledge or be charged with knowledge of an Event of Default except
(i) if the Trustee is acting as Paying Agent, any Default or Event of
Default occurring pursuant to Sections 5.01, 8.01(a) or 8.01(b) and
(ii) any Default or Event of Default of which the Trustee shall have
received written notification which references the Securities and this Indenture
or of which a Trust Officer shall have obtained actual knowledge.  Delivery of reports, information and
documents to the Trustee under Section 5.02 is for informational purposes only
and the Trustee’s receipt of the foregoing shall not constitute constructive
notice of any information contained therein or determinable from information
contained therein, including the Company’s compliance with any of its covenants
hereunder (as to which the Trustee is entitled to rely exclusively on Officers’
Certificates, except as otherwise provided herein);



 65
 









(i)    The rights, privileges, protections,
immunities and benefits given to the Trustee pursuant hereto, including,
without limitation, its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder and as
Collateral Agent, and each agent, custodian and other person employed by the
Trustee to act hereunder;


(j)    The permissive right of the Trustee to take
or refrain from taking any actions enumerated in this Indenture shall not be
construed as a duty;


(k)   The Trustee may request that the Company
deliver an Officers’ Certificate setting forth the names of individuals and/or
titles of officers authorized at such time to take specified actions pursuant
to this Indenture, which Officers’ Certificate may be signed by any person
authorized to sign an Officers’ Certificate, including any person specified as
so authorized in any such certificate previously delivered and not superseded;


(l)    Anything in this Indenture notwithstanding,
in no event shall the Trustee be liable for special, indirect, punitive or
consequential loss or damage of any kind whatsoever (including but not limited
to loss of profit), even if the Trustee has been advised as to the likelihood
of such loss or damage and regardless of the form of action; and


(m)  The Trustee shall not be responsible or liable
for any failure or delay in the performance of its obligations under this
Indenture arising out of or caused, directly or indirectly, by circumstances
beyond its reasonable control, including, without limitation, acts of God;
earthquakes; fire; flood; terrorism; wars and other military disturbances;
sabotage; epidemics; riots; interruptions; loss or malfunctions of utilities,
computer (hardware or software) or communication services; accidents; labor
disputes; acts of civil or military authority and governmental action.


Section 9.03.  Trustee Not Responsible for
Recitals or Issuance or Securities.  (a) The
recitals contained herein and in the Securities shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for the
correctness of the same.


(b)   The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities.


(c)   The Trustee or any Authorized Agent shall not
be accountable for the use or application by the Company of any of the
Securities or of the proceeds of such Securities, or for the use or application
of any moneys paid over by the Trustee in accordance with any provision of this
Indenture or established pursuant to Section 2.01, or for the use or
application of any moneys received by any Paying Agent other than the Trustee.


Section 9.04.  May Hold Securities.  The Trustee or any Paying Agent or
Registrar, in its individual or any other capacity, may become the owner or
pledgee of Securities and, subject to Section 9.16, may otherwise deal with the
Company with the same rights it would have if it were not Trustee, Paying Agent
or Registrar.


Section 9.05.  Moneys Held in Trust.  Subject to the provisions of
Section 6.01(c), all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by law.  The Trustee shall be
under no liability for interest on any moneys received by it hereunder except
such as it may agree in writing with the Company to pay thereon.



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Section 9.06.  Compensation and
Reimbursement.  (a) The
Company covenants and agrees to pay to the Trustee, and the Trustee shall be
entitled to, such compensation (which shall not be limited by any provision of
law in regard to the compensation of a trustee of an express trust), as the
Company and the Trustee may from time to time agree in writing for all services
rendered by it in the execution of the trusts hereby created and in the
exercise and performance of any of the powers and duties hereunder of the
Trustee, and, except as otherwise expressly provided herein, the Company shall
pay or reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Indenture (including the reasonable compensation
and the expenses and disbursements of its counsel and of all Persons not
regularly in its employ) except any such expense, disbursement or advance as
may arise from the Trustee’s gross negligence, bad faith or willful
misconduct.  The Company covenants and
agrees to indemnify the Trustee (and its officers, agents, directors,
stockholders and employees) for, and to hold it harmless against, any loss,
liability or expense (including, without limitation, reasonable attorney’s fees
and expenses) incurred without gross negligence or bad faith or willful
misconduct on the part of the Trustee and arising out of or in connection with
the acceptance or administration of this trust, including the reasonable costs
and expenses of defending itself against any claim of liability in the
premises.


(b)   The obligations of the Company under this
Section to compensate and indemnify the Trustee and to pay or reimburse the
Trustee for reasonable expenses, disbursements and advances shall constitute
additional indebtedness hereunder.  Such
additional indebtedness shall be secured by a lien prior to that of the
Securities upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the benefit of the Holders.


(c)   When the Trustee incurs expenses or renders services
after an Event of Default specified in Section 8.01(i) or (j) occurs, the
expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.


(d)   For the purposes of this Section 9.06, the “Trustee”
shall include any predecessor Trustee; provided, however, that the gross negligence, bad faith or willful
misconduct of any Trustee or other indemnified party hereunder shall not affect
the rights of any other Trustee hereunder.


(e)   The provisions of this Section shall
survive the discharge of this Indenture and resignation or removal of the
Trustee.


Section 9.07.  Reliance on Officers’
Certificate.  Except as
otherwise provided in Section 9.01, whenever in the administration of the
provisions of this Indenture the Trustee shall deem it necessary or desirable
that a matter be proved or established prior to taking or suffering or omitting
to take any action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of bad faith on
the part of the Trustee, be deemed to be conclusively proved and established by
an Officers’ Certificate or Opinion of Counsel delivered to the Trustee and
such certificate, in the absence of bad faith on the part of the Trustee, shall
be full warrant to the Trustee for any action taken, suffered or omitted to be
taken by it under the provisions of this Indenture upon the faith thereof.


Section 9.08.  Disqualification: Conflicting
Interests.  If the Trustee has
or shall acquire any “conflicting interest” within the meaning of
Section 310(b) of the TIA, the Trustee and the Company shall in all
respects comply with the provisions of Section 310(b) of the TIA.


Section 9.09.  Corporate Trustee Required;
Eligibility.  There shall at
all times be a Trustee with respect to the Securities issued hereunder which
shall at all times be a corporation organized and doing business under the laws
of the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or other Person permitted to act as
trustee by the SEC, authorized under 



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such laws to exercise corporate trust powers, having a
combined capital and surplus, or being a member of a bank holding company with
a combined capital and surplus, of at least $50 million, and subject to
supervision or examination by Federal, State, Territorial or District of
Columbia authority.  If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. 
The Company may not, nor may any Person directly or indirectly
controlling, controlled by, or under common control with the Company, serve as
Trustee.  In case at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section,
the Trustee shall resign immediately in the manner and with the effect
specified in Section 9.10.


Section 9.10.  Resignation and Removal;
Appointment of Successor.  (a) The
Trustee or any successor hereafter appointed may at any time resign as Trustee
with respect to the Securities by giving written notice thereof to the Company
and by transmitting notice of resignation by mail, first class postage prepaid,
to the Holders, as their names and addresses appear upon the Register.  Upon receiving such notice of resignation,
the Company shall promptly appoint a successor trustee with respect to the
Securities by or pursuant to a resolution of the Board of Directors.  If no successor trustee shall have been so
appointed and have accepted appointment within 30 calendar days after the
mailing of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee with
respect to the Securities, or any Holder who has been a bona fide holder of a
Security or Securities for at least six months may on behalf of himself and all
others similarly situated, petition any such court for the appointment of a
successor trustee, in either case at the sole cost and expense of the Company.  Such court may thereupon after such notice,
if any, as it may deem proper and prescribe, appoint a successor trustee.


(b)   In case at any time any one of the following
shall occur:


(i)    the Trustee shall fail to comply with the
provisions of Section 9.08 after written request therefor by the Company or by
any Holder who has been a bona fide holder of a Security or Securities for at
least six months;


(ii)   the Trustee shall cease to be eligible in
accordance with the provisions of Section 9.09 and shall fail to resign after
written request therefor by the Company or by any such Holder; or


(iii)  the Trustee shall become incapable of acting,
or shall be adjudged a bankrupt or insolvent, or commence a voluntary
bankruptcy proceeding, or a receiver of the Trustee or of its property shall be
appointed or consented to, or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation;


then, in any such case, the Company may remove the
Trustee with respect to all Securities and appoint a successor trustee by or
pursuant to a resolution of the Board of Directors, or, unless the Trustee’s
duty to resign is stayed as provided herein, subject to Section 8.11, any
Holder who has been a bona fide holder of a Security or Securities for at least
six months may, on behalf of that Holder and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor trustee. 
Such court may thereupon after such notice, if any, as it may deem
proper and prescribe, remove the Trustee and appoint a successor trustee.


(c)   The Holders of a majority in aggregate
principal amount of the Securities at the time outstanding may at any time
remove the Trustee by so notifying the Trustee and the Company and may 



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appoint a successor Trustee with the consent of the
Company.  If no successor trustee shall
have been so appointed and have accepted appointment within 30 calendar days
after such notification of removal by the Holders, the Trustee to be removed
may petition any court of competent jurisdiction for the appointment of a
successor trustee with respect to the Securities, or any Holder who has been a
bona fide holder of a Security or Securities for at least six months may on
behalf of himself and all others similarly situated, petition any such court
for the appointment of a successor trustee, in either case at the sole cost and
expense of the Company.  Such court may,
as it may deem proper prescribe or appoint a successor trustee.


(d)   Notwithstanding anything herein to the
contrary, any resignation or removal of the Trustee and appointment of a
successor trustee with respect to the Securities pursuant to any of the
provisions of this Section shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 9.11.


(e)   So long as no event which is, or after notice
or lapse of time, or both, would become, an Event of Default shall have
occurred and be continuing, and except with respect to a Trustee appointed by
the Holders of a majority in principal amount of the Securities at that time
outstanding pursuant to Subsection (c) of this Section, if the Company
shall have delivered to the Trustee (i) a resolution of the Board of
Directors appointing a successor Trustee, effective as of a date specified
therein, and (ii) an instrument of acceptance of such appointment,
effective as of such date, by such successor Trustee in accordance with Section
9.11, the Trustee shall be deemed to have resigned as contemplated in
subsection (a) of this Section, the successor Trustee shall be deemed to
have been appointed by the Company pursuant to subsection (a) of this
Section and such appointment shall be deemed to have been accepted as
contemplated in Section 9.11, all as of such date, and all other provisions of
this Section and Section 9.11 shall be applicable to such resignation,
appointment and acceptance except to the extent inconsistent with this
subsection (e).


(f)    At any time there shall be only one Trustee
with respect to the Securities.


Section 9.11.  Acceptance of Appointment by
Successor.  (a) In case
of the appointment hereunder of a successor trustee with respect to the
Securities, every such successor trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor trustee, such retiring Trustee shall, upon
payment of its charges and all other amounts payable to it hereunder, execute
and deliver an instrument transferring to such successor trustee all the
rights, powers, and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor trustee all property and money held by
such retiring Trustee hereunder, subject to the lien provided for in Section
9.06(b).


(b)   Upon request of any such successor trustee,
the Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor trustee all such rights, powers and
trusts referred to in paragraph (a) of this Section 9.11.


(c)   No successor trustee shall accept its
appointment unless at the time of such acceptance such successor trustee shall
be qualified and eligible under this Article 9.


(d)   Upon acceptance of appointment by a successor
trustee as provided in this Section, the Company shall transmit notice of the
succession of such trustee hereunder by mail, first class postage prepaid, to
the Holders, as their names and addresses appear upon the Register.  If the Company fails to 



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transmit such notice within ten calendar days after
acceptance of appointment by the successor trustee, the successor trustee shall
cause such notice to be transmitted at the expense of the Company.


Section 9.12.  Merger, Conversion,
Consolidation or Succession to Business. 
Any corporation or other business entity into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation or other business entity resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation or
other business entity succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided that such
corporation or other business entity shall be qualified under the provisions of
Section 9.08 and eligible under the provisions of Section 9.09, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.  In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.


Section 9.13.  Preferential Collection of
Claims Against the Company.  The
Trustee shall comply with Section 311(a) of the TIA, excluding any
creditor relationship described in Section 311(b) of the TIA.  A Trustee who has resigned or been removed
shall be subject to Section 311(a) of the TIA to the extent included
therein.


Section 9.14.  Notice of Defaults.  If a Default or Event of Default
occurs and is continuing hereunder and if it is actually known to a Trust
Officer of the Trustee, the Trustee shall mail to each Holder notice of the
Default or Event of Default within 90 calendar days after such Default or Event
of Default.  Except in the case of a
default in payment of principal of or interest (including Additional Interest,
if any) on any Security, the Trustee may withhold the notice if and so long as
a committee of its Trust Officers in good faith determines that withholding the
notice is not opposed to the interest of the Holders of such Securities.


Section 9.15.  Reports by Trustee.  (a) Within 60 calendar days after
May 15 of each year commencing with the year 2007, the Trustee shall transmit
to Holders such reports dated as of May 15 of the year in which such report is
made concerning the Trustee and its actions under this Indenture as may be
required pursuant to the TIA, including, without limitation,
Section 313(a) thereof, at the times and in the manner provided pursuant
thereto.  In the event that, on any such
reporting date, no events have occurred under the applicable sections of the
TIA within the 12 months preceding such reporting date, the Trustee shall be
under no duty or obligation to provide such reports.  The Trustee shall also comply with TIA
Section 313(b)(2).  The Trustee
shall transmit by mail all reports as required by TIA Section 313(c).


(b)   A copy of each such report shall, at the time
of such transmission to Holders, be delivered to the Company and filed by the
Trustee with each stock exchange upon which the Securities are listed and with
the SEC in accordance with TIA Section 313(d). 
The Company shall notify the Trustee when the Securities are listed on
any stock exchange and of any delisting thereof.


Section 9.16.  Preferential Collection of
Claims.  If and when the
Trustee shall be or become a creditor of the Company (or any other obligor upon
the Securities), the Trustee shall be subject to the provisions of the TIA
regarding the collection of claims against the Company (or any such other
obligor).



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ARTICLE
10

SUBORDINATION OF SECURITIES


Section 10.01.  Agreement of Subordination
upon Occurrence of Collateral Price Trigger.  If the Collateral Price Trigger is met, the
provisions of this Article 10 shall irrevocably and automatically apply to the
Securities without further action by the Company, the Trustee, any Holder or
any other Person, and the Company covenants and agrees, and each Holder by its
acceptance of the Securities issued hereunder likewise covenants and agrees,
that all Securities shall be issued subject to the provisions of this
Indenture, and each person holding any Security, whether upon original issue or
upon transfer, assignment or exchange thereof, accepts and agrees to be bound
by such provisions.


The
payment of the principal of, or interest on, all Securities issued hereunder
shall, to the extent and in the manner hereinafter set forth, be subordinated
and subject in right of payment to the prior payment in full of all Senior
Indebtedness, whether outstanding at the date of this Indenture or thereafter
incurred.


No
provision of this Section 10.01 shall prevent the occurrence of any Default or
Event of Default hereunder.


Section 10.02.  Payments to Holders.  No payment shall be made with
respect to the principal of or interest on the Securities, except payments and
distributions made by the Trustee as permitted by the first or second paragraph
of Section 10.05, if:


(a)   a default in the payment of principal,
premium, if any, interest, rent or other obligations in respect of Designated
Senior Indebtedness occurs and is continuing beyond any applicable period of
grace (a “Payment Default”), unless and until
such Payment Default shall have been cured or waived or shall have ceased to
exist; or


(b)   a default, other than a Payment Default, on any
Designated Senior Indebtedness occurs and is continuing that then permits
holders of such Designated Senior Indebtedness to accelerate its maturity, or
in the case of Designated Senior Indebtedness in the form of a lease, a default
other than a Payment Default occurs and is continuing that permits the lessor
to either terminate the lease or require the Company to make an irrevocable
offer to terminate the lease, and the Trustee receives written notice of such
default (a “Payment Blockage Notice”) from the
Company or any other Person permitted to give such notice under this Indenture
(a “Non-Payment Default”).


If
the Trustee receives any Payment Blockage Notice pursuant to clause (b) above,
no subsequent Payment Blockage Notice shall be effective for purposes of this
Section 10.02 unless and until at least 365 calendar days shall have elapsed
since the initial effectiveness of the immediately prior Payment Blockage
Notice. No Non-Payment Default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be, or be made,
the basis for a subsequent Payment Blockage Notice unless such Non-Payment
Default has been cured or waived in writing for a period of not less than 90
calendar days.


The
Company may and shall resume payments on and distributions in respect of the
Securities, including any past scheduled payments of the principal of, or
interest, on such Securities, to which the Holders would have been entitled but
for the provisions of this Article 10:


(i)    in the case of a Payment Default, upon the
date on which such Payment Default is cured or waived in writing or ceases to
exist, and



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(ii)   in the case of a Non-Payment Default, the
earlier of (a) the date upon which such default is cured or waived or ceases to
exist or (b) 179 calendar days after the Payment Blockage Notice is received by
the Trustee if the maturity of such Designated Senior Indebtedness has not been
accelerated (or, in the case of any lease, 179 calendar days after the Payment
Blockage Notice is received, so long as the Company has not received notice
that the lessor under such lease has exercised its right to terminate the lease
or require the Company to make an irrevocably offer to terminate the lease).


Upon
any payment by the Company, or distribution of assets of the Company of any
kind or character, whether in Cash, property or securities, to creditors upon
any dissolution or winding up or liquidation or reorganization of the Company,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other proceedings, all amounts due or to become due upon all Senior
Indebtedness shall first be paid in full in Cash or other payment satisfactory
to the holders of such Senior Indebtedness, or payment thereof in accordance
with its terms provided for in Cash or other payment satisfactory to the
holders of such Senior Indebtedness before any payment is made on account of
the principal of, or interest on the Securities; and upon any such dissolution
or winding up or liquidation or reorganization of the Company or bankruptcy,
insolvency, receivership or other proceeding, any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in
Cash, property or securities, to which the Holders or the Trustee would be
entitled, except for the provision of this Article 10, shall (except as
aforesaid) be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or distribution,
or by the Holders or by the Trustee under this Indenture if received by them or
it, directly to the holders of Senior Indebtedness (pro rata to such holders on
the basis of the respective amounts of Senior Indebtedness held by such
holders, or as otherwise required by law or a court order) or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay all Senior Indebtedness in full, in Cash or other payment
satisfactory to the holders of such Senior Indebtedness, after giving effect to
any concurrent payment or distribution to or for the holders of Senior
Indebtedness, before any payment or distribution is made to the Holders or to
the Trustee.


For
purposes of this Article 10, the words, “Cash, property or securities” shall
not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment, the payment of which is
subordinated at least to the extent provided in this Article 10 with respect to
the Securities to the payment of all Senior Indebtedness that may at the time
be outstanding; provided that (i) the Senior
Indebtedness is assumed by the new corporation, if any, resulting from any
reorganization or readjustment, and (ii) the rights of the holders of Senior
Indebtedness are not, without the consent of such holders, altered by such
reorganization or readjustment. The consolidation of the Company with, or the
merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer of its property
as an entirety, or substantially as an entirety, to another corporation upon
the terms and conditions provided for in Article 7 shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 10.02 if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article 7.


In
the event that, notwithstanding the foregoing provisions, any payment or
distribution of assets of the Company of any kind or character, whether in
Cash, property or securities (including, without limitation, by way of setoff
or otherwise), prohibited by the foregoing provisions in this Section 10.02,
shall be received by the Trustee or the Holders before all Senior Indebtedness
is paid in full in Cash or other payment satisfactory to the holders of such Senior
Indebtedness, or provision is made for such payment thereof in accordance with
its terms in Cash or other payment satisfactory to the holders of 



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such Senior Indebtedness, such payment or distribution
shall be held in trust for the benefit of and shall be paid over or delivered
to the holders of Senior Indebtedness or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any Senior Indebtedness may have been issued,
as their respective interests may appear, as calculated by the Company, for
application to the payment of any Senior Indebtedness remaining unpaid to the
extent necessary to pay all Senior Indebtedness in full in Cash or other
payment satisfactory to the holders of such Senior Indebtedness, after giving
effect to any concurrent payment or distribution to or for the holders of such
Senior Indebtedness.


Nothing
in this Section 10.02 shall apply to claims of, or payments to, the Trustee
under or pursuant to Section 9.06. This Section 10.02 shall be subject to the
further provisions of Section 10.05.


Section 10.03.  Subrogation of
Securities.  Subject to the
payment in full of all Senior Indebtedness, the rights of the Holders shall be
subrogated to the extent of the payments or distributions made to the holders
of such Senior Indebtedness pursuant to the provisions of this Article 10
(equally and ratably with the holders of all Debt of the Company which by its
express terms is pari passu to the Securities; provided that for the purposes of such subrogation, no
payments or distributions to the holders of the Senior Indebtedness of any
Cash, property or securities to which the Holders or the Trustee would be
entitled except for the provisions of this Article 10, and no payment over
pursuant to the provisions of this Article 10, to or for the benefit of the
holders of Senior Indebtedness by Holders or the Trustee, shall, as between the
Company, its creditors other than holders of Senior Indebtedness, and the
Holders, be deemed to be a payment by the Company to or on account of the
Senior Indebtedness; and no payments or distributions of Cash, property or
securities to or for the benefit of the Holders pursuant to the subrogation
provisions of this Article 10, that would otherwise have been paid to the
holders of Senior Indebtedness shall be deemed to be a payment by the Company
to or for the account of the Securities. It is understood that the provisions
of this Article 10 are and are intended solely for the purposes of defining the
relative rights of the Holders, on the one hand, and the holders of the Senior
Indebtedness, on the other hand.


Nothing
contained in this Article 10 or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as among the Company, its creditors
other than the holders of Senior Indebtedness, and the Holders, the obligation
of the Company, which is absolute and unconditional, to pay to the Holders the
principal of, and interest on, the Securities as and when the same shall become
due and payable in accordance with their terms, or is intended to or shall
affect the relative rights of the Holders and creditors of the Company other
than the holders of the Senior Indebtedness, nor shall anything herein or
therein prevent the Trustee or any Holder from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture,
subject to the rights, if any, under this Article 10 of the holders of Senior
Indebtedness in respect of Cash, property or securities of the Company received
upon the exercise of any such remedy.


Section 10.04.  Authorization to Effect
Subordination.  Each Holder by
the Holder’s acceptance of a Security authorizes and directs the Trustee on the
Holder’s behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article 10 and appoints the
Trustee to act as the Holder’s attorney-in-fact for any and all such purposes.
If the Trustee does not file a proper proof of claim or proof of debt in the
form required in any proceeding referred to in Section 8.09 hereof at least 30
calendar days before the expiration of the time to file such claim, the holders
of any Senior Indebtedness or their representatives are hereby authorized to
file an appropriate claim for and on behalf of the Holders.


Section 10.05.  Notice to Trustee.  The Company shall give prompt
written notice in the form of an Officers’ Certificate to a Responsible Officer
of the Trustee and to any Paying Agent of any fact 



 73
 









known to the Company which would prohibit the making
of any payment of monies to or by the Trustee or any Paying Agent in respect of
the Securities pursuant to the provisions of this Article 10. Notwithstanding
the provisions of this Article 10 or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts which
would prohibit the making of any payment of monies to or by the Trustee in
respect of the Securities pursuant to the provisions of this Article 10, unless
and until a Responsible Officer of the Trustee shall have received written
notice thereof at the Corporate Trust Office from the Company (in the form of
an Officers’ Certificate) or a representative or a holder or holders of Senior
Indebtedness or from any trustee thereof; and before the receipt of any such
written notice, the Trustee shall be entitled in all respects to assume that no
such facts exist; provided that if on a date not
less than one Business Day prior to the date upon which by the terms hereof any
such monies may become payable for any purpose (including, without limitation,
the payment of the principal of, or interest on any Security) the Trustee shall
not have received, with respect to such monies, the notice provided for in this
Section 10.05, then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to apply monies received to the
purpose for which they were received, and shall not be affected by any notice
to the contrary which may be received by it on or after such prior date.


Notwithstanding
anything in this Article 10 to the contrary, nothing shall prevent any payment
by the Trustee to the Holders of monies deposited with the Trustee pursuant to
Section 12.01, provided such deposit was not in violation of this Article 10,
and any such payment shall not be subject to the provisions of Section 10.01 or
Section 10.02.


The
Trustee shall be entitled to conclusively rely on the delivery to it of a
written notice by a representative to a person representing himself to be a
holder of Senior Indebtedness (or a trustee on behalf of such holder) to
establish that such notice has been given by a representative or a holder of
Senior Indebtedness or a trustee on behalf of any such holder or holders.  The Trustee shall not be required to make any
payment or distribution to or on behalf of a holder of Senior Indebtedness pursuant
to this Article 10 unless it has received reasonably satisfactory evidence as
to the amount of Senior Indebtedness held by such person, the extent to which
such person is entitled to participate in such payment or distribution and any
other facts pertinent to the rights of such person under this Article 10.


Section 10.06.  Trustee’s Relation to Senior
Indebtedness.  The Trustee in
its individual capacity shall be entitled to all the rights set forth in this
Article 10 in respect of any Senior Indebtedness at any time held by it, to the
same extent as any other holder of Senior Indebtedness, and nothing in Article
9 or elsewhere in this Indenture shall deprive the Trustee of any of its rights
as such holder.


With
respect to the holders of Senior Indebtedness, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article 10, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness.


Section 10.07.  No Impairment of
Subordination.  No right of
any present or future holder of any Senior Indebtedness to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance
by the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof which any such holder may have or otherwise
be charged with.


Section 10.08.  Certain Conversions Not Deemed
Payment.  For the purposes of
this Article 10 only, (a) the issuance and delivery of junior securities upon
conversion of Securities in accordance with 



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Article 4 shall not be deemed to constitute a payment
or distribution on account of the principal of, or interest on, Securities or
on account of the purchase or other acquisition of Securities, and (b) the
payment, issuance or delivery of Cash (including the return of principal, but
excluding Cash in satisfaction of fractional shares pursuant to Section 4.01),
property or securities (other than junior securities) upon conversion of a
Security shall be deemed to constitute payment on account of the principal of,
or interest on such Security. For the purposes of this Section 10.08, the term
“junior securities” means (i) shares of
any Capital Stock of any class of the Company or (ii) securities of the Company
that are subordinated in right of payment to all Senior Indebtedness that may
be outstanding at the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than, the Securities
are so subordinated as provided in this Article 10. Nothing contained in this
Article 10 or elsewhere in this Indenture or in the Securities is intended to
or shall impair, as among the Company, its creditors (other than holders of
Senior Indebtedness) and the Holders, the right, which is absolute and
unconditional, of any Holder to convert its Security in accordance with Article
4.


Section 10.09.  Article Applicable to Paying
Agents.  If at any time any
Paying Agent other than the Trustee shall have been appointed by the Company
and be then acting hereunder, the term “Trustee” as used in this Article 10
shall (unless the context otherwise requires) be construed as extending to and
including such Paying Agent within its meaning as fully for all intents and
purposes as if such Paying Agent were named in this Article 10 in addition to
or in place of the Trustee; provided, however,
that the first paragraph of Section 10.05 shall not apply to the Company or any
Affiliate of the Company if it or such Affiliate acts as Paying Agent.  The Trustee shall not be responsible for the
actions or inactions of any other Paying Agents (including the Company if
acting as its own Paying Agent) and have no control of any funds held by such
other Paying Agents, unless and to the extent that the Trustee has been
appointed as Paying Agent under this Indenture.


Section 10.10.  Senior Indebtedness Entitled
to Rely.  The holders of
Senior Indebtedness (including, without limitation, Designated Senior
Indebtedness) shall have the right to rely upon this Article 10, and no
amendment or modification of the provisions contained herein shall diminish the
rights of such holders unless such holders shall have agreed in writing
thereto.


Section
10.11.  Reliance
on Judicial Order or Certificate of Liquidating Agent.  Upon any payment or distribution
of assets of the Company referred to in this Article 10, the Trustee and the
Holders shall be entitled to conclusively rely upon any order or decree entered
by any court of competent jurisdiction in which such insolvency, bankruptcy,
receivership, liquidation, reorganization, dissolution, winding up or similar
case or proceeding is pending, or a certificate of the trustee in bankruptcy,
liquidating trustee, custodian, receiver, assignee for the benefit of creditors,
agent or other person making such payment or distribution, delivered to the
Trustee or to the Holders, for the purpose of ascertaining the persons entitled
to participate in such payment or distribution, the holders of Senior
Indebtedness and other Debt of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 10.


ARTICLE 11

AMENDMENTS, SUPPLEMENTS AND WAIVERS


Section 11.01.  Without Consent of
Holders.  The Company and the
Trustee may amend or supplement this Indenture or the Securities without notice
to, or consent of, any Holder:


(a)   to cure any ambiguity, omission, defect or
inconsistency, to correct or supplement any provision herein which may be inconsistent
with any other provision herein, or to make any other provisions with respect
to matters or questions arising under this Indenture which shall not be
inconsistent 



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with the provisions of this Indenture, provided that such action pursuant to this clause (a)
shall not adversely affect the interests of the Holders in any material
respect;


(b)   to provide for uncertificated Securities in
addition to or in place of Certificated Securities;


(c)   to provide for the assumption of the
Company’s obligations to Holders in the case of a share exchange, merger or
consolidation or sale of all or substantially all of the Company’s assets;


(d)   to make any change that would provide any
additional rights or benefits to the Holders or that does not adversely affect
in any material respect the legal rights under this Indenture of any Holder;


(e)   to add a Guarantor;


(f)    to comply with requirements of the SEC in
order to effect or maintain the qualification of this Indenture under the TIA;


(g)   to secure the Securities;


(h)   to comply with the rules of any applicable
securities depositary, including the Depositary;


(i)    to increase the Conversion Rate;


(j)    to execute a supplemental indenture in
accordance with Section 4.10;


(k)   to conform the text of this Indenture or the
Securities to any provision of the “Description of the Notes” contained in the
Offering Circular to the extent that the text of the “Description of the Notes”
was intended by the Company and the Initial Purchasers to be a recitation of
the text of this Indenture or the Securities as represented by the Company to
the Trustee in an Officers’ Certificate;


(l)    to provide for a successor Trustee in
accordance with the terms of this Indenture or to otherwise comply with any
requirement of this Indenture;


(m)  to add to the covenants listed in Article 5
for the benefit of the Holders or surrender any right or power conferred upon
the Company;


(n)   to modify the restrictions and procedures for
resale and other transfers of Securities or Common Stock pursuant to law, regulation
or practice relating to the resale or transfer of restricted securities
generally; or


(o)   to add Guarantees with respect to the
Securities or to release the Subsidiary Guarantor in accordance with the terms
of this Indenture.


However,
no modification or amendment may be made to the subordination provisions in
Article 10 of this Indenture that adversely affects the rights of any holder of
Senior Indebtedness then outstanding unless the holders of such Senior
Indebtedness (or any group or representative thereof authorized to give a
consent) consent to such change.


Section 11.02.  With Consent of Holders.  The Company and the Trustee may
amend or supplement the Securities or this Indenture with the consent of the
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding.  Subject to Section
8.04 and Section 8.07, the Holders of at least a majority in aggregate
principal amount of the Securities then outstanding may, without notice to the
Holders, waive compliance in any instance by the Company with any provision of 



 76
 









the Securities or this Indenture or waive any past
default under this Indenture and its consequences, except a default in the
payment of any amount due, or in the obligation to deliver Common Stock, with
respect to any Security or in respect of any provision which under this
Indenture cannot be modified or amended without the consent of the Holder of
each Security affected.  However,
notwithstanding the foregoing but subject to Section 11.04, without the consent
of the Holders of each Security then outstanding, an amendment, supplement or
waiver may not:


(a)   change the Maturity Date or the Interest
Payment Date;


(b)   reduce the principal amount of, the
Fundamental Change Purchase Price of, or the Conversion Rate (except as
provided in this Indenture) or rate of interest or Additional Interest on, any
Security;


(c)   reduce the amount of principal payable upon
acceleration of the maturity of any Security;


(d)   change the currency in which payment of
principal of, the Fundamental Change Purchase Price of, or interest with
respect to, the Securities is payable;


(e)   impair the right to institute suit for the
enforcement of any payment on, or with respect to, any Security;


(f)    modify the provisions with respect to the repurchase
rights of Holders as provided in Article 3 in a manner adverse to Holders;


(g)   adversely affect the right of Holders to
convert Securities in any material respect, other than as provided in this
Indenture;


(h)   reduce the percentage in principal amount of
the outstanding Securities, the consent of whose Holders is required to take
specific actions including, but not limited to, the waiver of past defaults or
the modification or amendment of this Indenture;


(i)    alter the manner of calculation or rate of
accrual of interest or Additional Interest or Fundamental Change Purchase Price
or the Conversion Rate (except as permitted under Section 11.01(i)) on any
Security or extend the time for payment of any such amount; or


(j)    release the Subsidiary Guarantor from any of
its obligations under its Guarantee or this Indenture other than in accordance
with the terms hereof.


It
shall not be necessary for the consent of the Holders under this Section 11.02
to approve the particular form of any proposed amendment, supplement or waiver,
but it shall be sufficient if such consent approves the substance thereof.


After
an amendment, supplement or waiver under Section 11.01 or this Section 11.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver.  Any failure of the Company to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such amendment, supplement or waiver.


Section 11.03.  Compliance with Trust
Indenture Act.  Every
amendment to or supplement of this Indenture or the Securities shall comply
with the TIA as in effect at the date of such amendment or supplement.



 77
 









Section 11.04.  Revocation and Effect of
Consents.  Until an amendment,
supplement or waiver becomes effective, a consent to it by a Holder is a
continuing consent by the Holder and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder’s
Security, even if notation of the consent is not made on any Security.  However, any such Holder or subsequent Holder
may revoke the consent as to its Security or portion of a Security if the
Trustee receives the notice of revocation before the date the amendment,
supplement or waiver becomes effective.


After
an amendment, supplement or waiver becomes effective, it shall bind every
applicable Holder.


Section 11.05.  Notation on or Exchange of
Securities.  If an amendment,
supplement or waiver changes the terms of a Security, the Trustee may require
the Holder to deliver the Security to the Trustee.  The Trustee may place an appropriate notation
on the Security about the changed terms and return it to the Holder.  Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.


Section 11.06.  Trustee to Sign Amendments,
Etc.  The Trustee shall sign
any amendment or supplemental indenture authorized pursuant to this Article 11
if the amendment or supplemental indenture does not adversely affect the
rights, duties, liabilities or immunities of the Trustee in any material
respect.  If it does adversely affect the
rights, duties, liabilities or immunities of the Trustee in any material
respect, the Trustee may, in its sole discretion, but need not sign it.  In signing or refusing to sign such amendment
or supplemental indenture, the Trustee shall be provided with and, subject to
Section 9.01, shall be fully protected in relying upon, an Officers’
Certificate and an Opinion of Counsel stating that such amendment or
supplemental indenture is authorized or permitted by this Indenture and that
all conditions precedent to the effectiveness of such amendment or supplement
have been satisfied or duly waived.


Section 11.07.  Effect of Supplemental
Indentures.  Upon the
execution of any supplemental indenture under this Article 11, this Indenture
shall be modified in accordance therewith, and such supplemental indenture
shall form a part of this Indenture for all purposes; and every Holder of
Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.


ARTICLE 12

SATISFACTION AND DISCHARGE


Section 12.01.  Satisfaction and Discharge of
the Indenture.  This Indenture
shall cease to be of further effect (except as to any surviving rights of
registration of transfer or exchange of Securities herein expressly provided
for), and the Trustee, on demand of and at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when


(a)   either


(i)    all Securities theretofore authenticated and
delivered (other than Securities that have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 2.07) have been
delivered to the Trustee for cancellation; or


(ii)   all such Securities not theretofore delivered
to the Trustee for cancellation have become due and payable whether at the
Maturity Date, upon acceleration, with respect to any Fundamental Change
Purchase Date, upon determination of the Settlement Amount and the Company
deposits with the Paying Agent or Conversion Agent, as the case may be, Cash,
Common Stock or other consideration, or a combination thereof, as applicable
hereunder, 



 78
 









sufficient to pay on such
date all amounts due and owing on all outstanding Securities (other than
Securities replaced pursuant to Section 2.07) on such date;


(b)   the Company has paid or caused to be paid all
other sums payable hereunder by the Company; and


(c)   the Company has delivered to the Trustee an
Officers’ Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.


Notwithstanding
the satisfaction and discharge of this Indenture, the obligations of the
Company to the Trustee under Section 9.06 and, if money shall have been
deposited with the Trustee pursuant to Section 12.01(a)(ii), the obligations of
the Trustee under Section 12.02 shall survive such satisfaction and discharge.


Notwithstanding
anything herein to the contrary, Article 4, Article 12, Section 2.03, Section
2.04, Section 2.05, Section 2.06, Section 2.07, Section 2.08, Section 2.14,
Section 5.01, Section 5.05, Section 5.06 and Section 9.06 shall survive any
discharge of this Indenture until such time as there are no Securities
outstanding.


Section 12.02.  Repayment to the Company.  The Trustee, the Paying Agent and
the Conversion Agent shall return to the Company upon written request any Cash
or securities held by them for the payment of any amount with respect to the
Securities that remains unclaimed for two years, subject to applicable
unclaimed property law.  After return to
the Company, Holders entitled to the Cash or securities must look to the
Company for payment as general creditors unless an applicable abandoned
property law designates another person and the Trustee, the Paying Agent and
the Conversion Agent shall have no further liability to the Holders with
respect to such Cash or securities for that period commencing after the return
thereof.


ARTICLE 13

GUARANTEES


Section 13.01.  The Guarantees.  Subject to the provisions of this
Article 13, each Subsidiary Guarantor hereby irrevocably and unconditionally
Guarantees, jointly and severally, on a senior, secured basis, the full and
punctual payment or delivery, as applicable (whether at maturity, upon
redemption, purchase pursuant to Fundamental Change, acceleration or otherwise)
of the principal of, premium, if any, and interest on, and all other amounts
payable or deliverable, as applicable, under, each Security and the full and
punctual payment of all other amounts payable by the Company under this
Indenture (each such Guarantee, a “Subsidiary Guarantee”).
Upon failure by the Company to pay or deliver, as applicable, punctually any
such amount, each Subsidiary Guarantor shall forthwith on demand pay the amount
not so paid at the place and in the manner specified in this Indenture.


Section 13.02.  Guarantees Unconditional.  The obligations of each Subsidiary
Guarantor hereunder are unconditional and absolute and, without limiting the
generality of the foregoing, will not be released, discharged or otherwise
affected by


(a)   any extension, renewal, settlement,
compromise, waiver or release in respect of any Obligation of the Company under
this Indenture or any Security, by operation of law or otherwise;


(b)   any modification or amendment of or
supplement to this Indenture or any Security;



 79
 









(c)   any change in the corporate existence,
structure or ownership of the Company, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Company or its assets
or any resulting release or discharge of any obligation of the Company
contained in this Indenture or any Security;


(d)   the existence of any claim, set-off or other
rights which a Subsidiary Guarantor may have at any time against the Company,
the Trustee or any other Person, whether in connection with this Indenture or
any unrelated transactions, provided that
nothing herein prevents the assertion of any such claim by separate suit or
compulsory counterclaim;


(e)   any invalidity or unenforceability relating
to or against the Company for any reason of this Indenture or any Security, or
any provision of applicable law or regulation purporting to prohibit the
payment by the Company of the principal of or interest on any Note or any other
amount payable by the Company under this Indenture; or


(f)    any other act or omission to act or delay of
any kind by the Company, the Trustee or any other Person or any other
circumstance whatsoever which might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of or defense to a Subsidiary Guarantor’s
obligations hereunder.


Section 13.03.  Discharge; Reinstatement.  Each Subsidiary Guarantor’s
obligations hereunder shall be automatically and unconditionally released upon
the earlier of (a) the payment in full of the principal of, premium, if any,
and interest on the Securities and all other amounts payable by the Company
under this Indenture or (b) (i) the satisfaction of the Collateral Price
Trigger and (ii) the shelf registration statement covering resales of the
Securities and the Common Stock issuable upon conversion of the Securities is
effective and available for use pursuant to the terms of the Registration
Rights Agreement for at least 30 calendar days following the date on which the
Company gives the Collateral Price Trigger Notice. If at any time any payment
of the principal of, premium, if any, or interest on any Security or any other
amount payable by the Company under this Indenture is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy or
reorganization of the Company and the conditions in the preceding clause (b)
are not otherwise satisfied, each Subsidiary Guarantor’s obligations hereunder
with respect to such payment shall be reinstated as though such payment had
been due but not made at such time.


Section 13.04.  Waiver by the Subsidiary
Guarantors.  Each Subsidiary
Guarantor irrevocably waives acceptance hereof, presentment, demand, protest
and any notice not provided for herein, as well as any requirement that at any
time any action by taken by any Person against the Company or any other Person.


Section 13.05.  Subrogation and
Contribution.  Upon making any
payment with respect to any Obligation of the Company under this Article 13,
each Subsidiary Guarantor will be subrogated to the rights of the payee against
the Company with respect to such obligation
provided that no Subsidiary Guarantor may enforce either any right
of subrogation, or any right to receive payment in the nature of contribution,
or otherwise, from any other Subsidiary Guarantor, with respect to such payment
so long as any amount payable by the Company hereunder or under the Securities
remains unpaid.


Section 13.06.  Stay of Acceleration.  If acceleration of the time for payment of
any amount payable by the Company under this Indenture or the Securities is
stayed upon the insolvency, bankruptcy or reorganization of the Company, all
such amounts otherwise subject to acceleration under the terms of this
Indenture are nonetheless payable by each Subsidiary Guarantor hereunder
forthwith on demand by the Trustee or the Holders.



 80















Section 13.07.  Limitation on Amount of
Guarantees.  Notwithstanding
anything to the contrary in this Article 13, each Subsidiary Guarantor, and by
its acceptance of Securities, each Holder, hereby confirms that it is the
intention of all such parties that the Guarantee of each such Subsidiary
Guarantor not constitute a fraudulent conveyance under applicable fraudulent
conveyance provisions of the United States Bankruptcy Code or any comparable
provision of state law. To effectuate the intention, the Trustee, the Holders
and each Subsidiary Guarantor hereby irrevocably agree that the Obligations of
each Subsidiary Guarantor under its Guarantee are limited to the maximum amount
that would not render each Subsidiary Guarantor’s obligations subject to
avoidance under applicable fraudulent conveyance provisions of the Bankruptcy
Law or any comparable provision of state law.


Section 13.08.  Execution and Delivery of
Guarantee.  The execution by
the Subsidiary Guarantor of this Indenture evidences the Guarantee of such
Subsidiary Guarantor, whether or not the person signing as an officer of the
Subsidiary Guarantor still holds that office at the time of authentication of
any Security. The delivery of any Security by the Trustee after authentication
of any Security. The delivery of any Security by the Trustee after
authentication constitutes due delivery of the Guarantee set forth in this
Indenture on behalf of the Subsidiary Guarantor.


ARTICLE 14

MISCELLANEOUS


Section 14.01.  Trust Indenture Act
Controls.  If any provision of
this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, including, without
limitation, the duties imposed by TIA Section 318(c), the required
provision of the TIA shall control.


Section 14.02.  Notices.  Any demand, authorization notice,
request, consent or communication shall be given in writing and delivered in
person, sent by overnight courier or mailed by first-class mail, postage
prepaid, addressed as follows or transmitted by facsimile transmission
(confirmed by delivery in person or mail by first-class mail, postage prepaid,
or by guaranteed overnight courier) to the parties hereto as follows:


If to
the Company, to:


Evergreen Energy Inc.

1225 17th Street, Suite 1300

Denver, Colorado 80202

Attention: Chief Financial Officer

Fax: (303) 293-8430


If to the Trustee,
to:


U.S. Bank National
Association

60 Livingston Avenue

St. Paul, Minnesota 55107-2292

Attention: Corporate Trust Services

(Evergreen 8.00% Convertible Secured Notes due 2012)

Fax: (651) 495-8097


Such
notices or communications to the Trustee shall be effective when received.



 81
 









The
Company or the Trustee by notice to the other in the manner prescribed above
may designate additional or different addresses or facsimile numbers for
subsequent notices or communications.


Any
notice or communication mailed to a Holder shall be mailed by first-class mail,
postage prepaid, or delivered by hand or by an overnight delivery service to it
at its address shown on the Register and shall be sufficiently given if so
mailed or delivered within the time prescribed. 
Any notice or communication shall also be mailed to any Person described
in TIA Section 313(c), to the extent required by the TIA.


Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.  Except as set forth above as to the Trustee,
if a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.


Section 14.03.  Communications by Holders with
Other Holders.  Holders may
communicate pursuant to TIA Section 312(b) with other Holders with respect
to their rights under this Indenture or the Securities.  The Company, the Trustee, the Registrar, the
Paying Agent, the Conversion Agent and any other Person shall have the
protection of TIA Section 312(c).


Section 14.04.  Certificate and Opinion as to
Conditions Precedent.  (a) Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee at the request
of the Trustee:


(i)    an Officers’ Certificate stating that, in
the opinion of the signers, all conditions precedent (including any covenants,
compliance with which constitutes a condition precedent), if any, provided for
in this Indenture relating to the proposed action have been complied with; and


(ii)   an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent (including any covenants,
compliance with which constitutes a condition precedent) have been complied
with.


(b)   Each Officers’ Certificate and Opinion of
Counsel with respect to compliance with a condition or covenant provided for in
this Indenture (other than an Officers’ Certificate provided pursuant to
Section 5.03) shall include:


(i)    a statement that the person making such
certificate or opinion has read such covenant or condition;


(ii)   a brief statement as to the nature and scope
of the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;


(iii)  a statement that, in the opinion of such
person, he or she has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or not such
covenant or condition has been complied with; and


(iv)  a statement as to whether or not, in the
opinion of such person, such condition or covenant has been complied with;


provided that with respect to
matters of fact an Opinion of Counsel may rely on an Officers’ Certificate or
certificates of public officials.



 82
 









Section 14.05.  Record Date for Vote or
Consent of Holders.  The
Company may set a record date for purposes of determining the identity of
Holders entitled to vote or consent to any action by vote or consent authorized
or permitted under this Indenture, which record date shall not be more than 30
calendar days prior to the date of the commencement of solicitation of such
action.  If a record date is fixed, those
persons who were Holders of Securities at the Close of Business on such record
date (or their duly designated proxies), and only those persons, shall be
entitled to take such action by vote or consent or to revoke any vote or
consent previously given, whether or not such persons continue to be Holders
after such record date.


Section 14.06.  Rules by Trustee, Paying
Agent, Registrar and Conversion Agent.  The
Trustee may make reasonable rules (not inconsistent with the terms of this
Indenture) for action by or at a meeting of Holders.  Any Registrar, Paying Agent or Conversion
Agent may make reasonable rules for its functions.


Section 14.07.  Legal Holidays.  A “Legal
Holiday” is a Saturday, Sunday or a day on which state or federally
chartered banking institutions in New York, New York are not required
to be open.  If a payment date is a Legal
Holiday, payment shall be made on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.  If an Interest Payment Record Date or other
record date is a Legal Holiday, the record date shall not be affected.


Section 14.08.  Governing Law; Jury Trial
Waiver.  This Indenture and
the Securities shall be governed by, and construed in accordance with, the laws
of the State of New York.


EACH
OF THE COMPANY AND THE TRUSTEE HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS INDENTURE.


Section 14.09.  No Adverse Interpretation of
Other Agreements.  This
Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or a Subsidiary of the Company.  Any such indenture, loan or debt agreement may
not be used to interpret this Indenture.


Section 14.10.  No Recourse against Others.  No recourse for the payment of the principal
of, or accrued and unpaid interest (including Additional Interest, if any), on,
any Security, or for any claim based thereon or otherwise in respect thereof,
and no recourse under or upon any obligation, covenant or agreement of the
Company in this Indenture or in any supplemental indenture or in any Security,
or because of the creation of any Indebtedness represented thereby, shall be
had against any past, present or future incorporator, stockholder, employee,
agent, officer or director or Subsidiary of the Company as such or of any
successor corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that all such liability is hereby expressly waived and
released as a condition of, and as a consideration for, the execution of this
Indenture and the issue of the Securities.


Section 14.11.  Successors.  All agreements of the Company in
this Indenture and the Securities shall bind its successors.  All agreements of the Trustee in this
Indenture shall bind its successor.


Section 14.12.  Multiple Counterparts.  The parties may sign multiple
counterparts of this Indenture.  Each
signed counterpart shall be deemed an original, but all of them together shall
represent the same agreement.



 83
 









Section 14.13.  Separability.  In case any provisions in this
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.


Section 14.14.  Calculations in Respect of the
Securities.  The Company or
its agents shall make all calculations under this Indenture and the Securities
in good faith.  In the absence of
manifest error, such calculations shall be final and binding on all Holders.  The Company or its agents shall provide a
copy of such calculations to the Trustee as required hereunder, and the Trustee
shall be entitled to rely on the accuracy of any such calculation without
independent verification.


Section 14.15.  Table of Contents, Headings,
Etc.  The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or restrict any of the
terms or provisions hereof.


[SIGNATURE PAGE FOLLOWS]



 84
 









IN
WITNESS WHEREOF, the parties hereto have hereunto set their hands as of the
date and year first above written.


	
  

  	
  EVERGREEN ENERGY INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin R. Collins

  
	
   

  	
   

  	
  Name:

  	
  Kevin R. Collins

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer and President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, not in its
  individual capacity, but solely as Trustee,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard Prokosch

  
	
   

  	
   

  	
  Name:

  	
  Richard Prokosch

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EVERGREEN OPERATIONS, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin R. Collins

  
	
   

  	
   

  	
  Name:

  	
  Kevin R. Collins

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer and President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  KFx PLANT, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin R. Collins

  
	
   

  	
   

  	
  Name:

  	
  Kevin R. Collins

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer and President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  KFx OPERATIONS, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin R. Collins

  
	
   

  	
   

  	
  Name:

  	
  Kevin R. Collins

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer and President

  



 



 85
 









 


	
  

  	
  LANDRICA DEVELOPMENT COMPANY

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin R. Collins

  
	
   

  	
   

  	
  Name:

  	
  Kevin R. Collins

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer and President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BUCKEYE INDUSTRIAL MINING CO.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William G. Laughlin

  
	
   

  	
   

  	
  Name:

  	
  William G. Laughlin

  
	
   

  	
   

  	
  Title:

  	
  Vice President, General Counsel and Secretary

  



 


 



 86















EXHIBIT A


[FACE OF SECURITY]


UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. 
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.  THIS SECURITY IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.  THIS SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND
UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM,
THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.


THIS
SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON
CONVERSION HEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.  EACH PURCHASER OF THIS SECURITY IS HEREBY
NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.


THE HOLDER OF THIS
SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY AND THE
COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (III) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (III) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE
RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE. 
IN ANY CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE
IN ANY HEDGING TRANSACTIONS WITH REGARD TO THIS SECURITY EXCEPT AS PERMITTED
UNDER THE SECURITIES ACT.


THIS SECURITY IS BEING
ISSUED WITH ORIGINAL ISSUE DISCOUNT, FOR PURPOSES OF SECTIONS 1271, 1272, 1273
AND 1275 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND IS
SUBJECT TO THE CONTINGENT PAYMENT DEBT INSTRUMENT REGULATIONS OF TREASURY
REGULATION SECTION 1.1275-4.  THE ISSUE
PRICE OF THIS NOTE IS $1,000 PER NOTE WITH A PRINCIPAL AMOUNT OF $1,000 AT
MATURITY; THE ISSUE DATE IS JULY 30, 2007. 
THE COMPANY’S DETERMINATION OF THE COMPARABLE YIELD IS 4.89% PER ANNUM,
COMPOUNDED SEMIANNUALLY.  YOU MAY OBTAIN
THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE PRICE, YIELD TO MATURITY, AND
PROJECTED PAYMENT SCHEDULE FOR THE SECURITY BY SUBMITTING A WRITTEN REQUEST TO
THE COMPANY AT EVERGREEN ENERGY INC., ATTN: CHIEF FINANCIAL OFFICER, 1225 17th
STREET, SUITE 1300, DENVER, COLORADO 80202.













THE COMPANY ACKNOWLEDGES
AND AGREES, AND EACH HOLDER AND EACH BENEFICIAL OWNER OF THIS SECURITY, BY
PURCHASING OR HOLDING THIS SECURITY OR A BENEFICIAL INTEREST IN THIS SECURITY,
SHALL BE DEEMED TO ACKNOWLEDGE AND AGREE THAT (IN THE ABSENCE OF AN
ADMINISTRATIVE DETERMINATION OR JUDICIAL RULING TO THE CONTRARY) (I) EACH
HOLDER AND EACH BENEFICIAL OWNER OF THIS SECURITY SHALL BE BOUND BY THE
COMPANY’S DETERMINATION OF THE PROJECTED PAYMENT SCHEDULE AND COMPARABLE YIELD
WITHIN THE MEANING OF U.S. TREASURY REGULATION SECTION 1.275-4(B), (II) THE
COMPARABLE YIELD MEANS THE YIELD AT WHICH THE COMPANY WOULD ISSUE, AS OF THE
ISSUE DATE, A FIXED RATE, NONCONVERTIBLE DEBT INSTRUMENT WITH NO CONTINGENT
PAYMENTS, BUT WITH TERMS AND CONDITIONS OTHERWISE COMPARABLE TO THOSE OF THE
SECURITIES, (III) THE COMPANY HAS DETERMINED THAT THE COMPARABLE YIELD IS THE
“APPLICABLE FEDERAL RATE” PRESCRIBED BY THE TREASURY DEPARTMENT, (IV) THE FAIR
MARKET VALUE OF COMMON STOCK RECEIVED BY A HOLDER OR BENEFICIAL OWNER OF A
SECURITY UPON CONVERSION OF SUCH SECURITY SHALL BE TREATED AS A CONTINGENT
PAYMENT UNDER U.S. TREASURY REGULATION SECTION 1.1275-4(B), (V) THE AMOUNT OF
ANY “COUPON MAKE-WHOLE PAYMENT” RECEIVED BY A HOLDER OR BENEFICIAL OWNER OF A
SECURITY SHALL BE TREATED AS A CONTINGENT PAYMENT UNDER U.S. TREASURY
REGULATION SECTION 1.1275-4(B), (VI) THE COMPARABLE YIELD AND THE PROJECTED
PAYMENT SCHEDULE ARE NOT DETERMINED FOR ANY PURPOSE OTHER THAN FOR THE PURPOSE
OF APPLYING U.S. TREASURY REGULATION SECTION 1.1275-4(B)(4) TO THE SECURITY,
AND (VII) THE COMPARABLE YIELD AND THE PROJECTED PAYMENT SCHEDULE DO NOT
CONSTITUTE A PROJECTION OR REPRESENTATION REGARDING THE ACTUAL AMOUNTS PAYABLE
ON THE SECURITY.



 2
 









EVERGREEN ENERGY INC.


8.00% CONVERTIBLE SECURED
NOTES DUE 2012


	
  No. 1

  	
  CUSIP: 30024BAA2

  	
  Initially U.S. $95,000,000

  
	
   

  	
  ISIN: US30024BAA26

  	
   

  



 


EVERGREEN
ENERGY INC., a Delaware corporation (the “Company,” which
term shall include any successor Person under the Indenture referred to on the
attached “Terms of the Notes”), promises to pay to Cede & Co., or
registered assigns, the principal sum as set forth in the “Schedule of
Increases or Decreases” attached hereto, which shall not exceed NINETY-FIVE
MILLION DOLLARS ($95,000,000) on August 1, 2012, and to pay interest thereon,
in arrears, from and including the most recent Interest Payment Date to which
interest has been paid or duly provided for (or if no interest has been paid,
from, and including July 30, 2007), to, but excluding, February 1 and August 1
of each year (each, an “Interest Payment Date”),
beginning on February 1, 2008, at a rate of 8.00% per annum (the “Initial Interest Rate”) until the principal hereof is paid
or made available for payment at August 1, 2012, or upon acceleration, or until
such date on which this Security is redeemed, converted or purchased as
provided herein; provided, however, that Initial
Interest Rate will be permanently decreased to the Reduced Interest Rate if (i)
the Reduced Interest Rate Trigger is satisfied and (ii) the shelf registration
statement covering resales of the Securities and the Common Stock issuable upon
conversion of the Securities is effective and available for use pursuant to the
terms of the Registration Rights Agreement for at least 30 days following the
Reduced Interest Rate Trigger, unless registration is no longer required.  The Reduced Interest Rate will become
effective on the first day of the calendar quarter following the date of the
Interest Rate Reduction.  The interest so
payable and punctually paid or duly provided for on any Interest Payment Date
shall, as provided in the Indenture (as hereinafter defined), be paid to the
Person in whose name this Security is registered at the close of business on
the regular record date for such interest, which shall be the January 15 or
July 15 (whether or not a Business Day), as the case may be, immediately
preceding the relevant Interest Payment Date (each, an “Interest
Payment Record Date”); provided, however,
that interest shall be paid to a Person other than the Person in whose name
this Security is registered at the Close of Business on the Interest Payment
Record Date as provided herein.


Reference
is hereby made to the further provisions of this Security set forth on the
attached “Terms of the Notes,” which further provisions shall for all purposes
have the same effect as if set forth at this place.


[Signature page follows]



 3
 









IN
WITNESS WHEREOF, the Company has caused this instrument to be duly executed.


Dated:  July 30, 2007


	
  

  	
  EVERGREEN ENERGY INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


Trustee’s
Certificate of Authentication: This is one of the Securities referred to in the
within-mentioned Indenture.


	
  

  	
  U.S. BANK NATIONAL
  ASSOCIATION, not in its individual capacity, but solely as Trustee,

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 



 4
 









[REVERSE OF SECURITY]


EVERGREEN ENERGY INC.


8.00% CONVERTIBLE SECURED
NOTES DUE 2012


This
Security is one of a duly authorized issue of 8.00% Convertible Secured Notes
due 2012 (the “Securities”) of EVERGREEN ENERGY,
INCORPORATED, a Delaware corporation (including any successor corporation under
the Indenture hereinafter referred to as, the “Company”),
issued under an Indenture, dated as of July 30, 2007 (the “Indenture”),
between the Company, as issuer, Evergreen Operations, LLC, KFx Plant, LLC, KFx
Operations, LLC, Buckeye Industrial Mining Co., and Landrica Development
Company, as subsidiary guarantors (the “Subsidiary Guarantors”),
and U.S. Bank National Association, as trustee (the “Trustee”).  The terms of the Security include those
stated in the Indenture, those made part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended (the “TIA”),
and those set forth in this Security. 
This Security is subject to all such terms, and Holders are referred to
the Indenture and the TIA for a statement of all such terms.  To the extent permitted by applicable law, if
any provision of this Security conflicts with the express provisions of the
Indenture, the provisions of the Indenture shall govern and be
controlling.  Capitalized terms used but
not defined herein have the meanings assigned to them in the Indenture unless
otherwise indicated.


1.             Interest.


The
Company promises to pay interest on the principal amount of this Security at
the rate per annum shown above, subject to a permanent reduction based on the
conditions set forth on the face of this Security, and on the Interest Payment
Dates.  Interest will be computed on the
basis of a 360-day year of twelve 30-day months.


2.             Method of Payment.


Payment
of the principal of, and interest on, the Securities shall be made at the
office of the Paying Agent in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.  The Holder must surrender
this Security to a Paying Agent to collect payment of principal.  Payment of interest on Certificated
Securities shall be made by check mailed to the address of the Person entitled
thereto as such address appears in the Register; provided,
however, that Holders with Securities in
an aggregate principal amount in excess of $2.0 million shall be paid, at their
written election, by wire transfer of immediately available funds.  Notwithstanding the foregoing, so long as the
Securities are registered in the name of a Depositary or its nominee, all
payments with respect to the Securities shall be made by wire transfer of
immediately available funds to the account of the Depositary or its nominee.



 5
 









3.             Paying Agent, Registrar,
Conversion Agent, Collateral Agent.


Initially,
the Trustee shall act as Paying Agent, Registrar and Conversion Agent.  The Company or any Affiliate of the Company
may act as Paying Agent, Registrar or Conversion Agent, subject to the terms of
the Indenture.  In addition, the Trustee
shall act as Collateral Agent in accordance with the Security Agreement.


4.             Indenture.


The Securities are
initially senior secured obligations of the Company limited to $95,000,000
aggregate principal amount.  The
Securities will automatically and irrevocably become subordinated to all of the
Company’s existing and future Senior Indebtedness if the Collateral Price
Trigger is satisfied as set forth in Section 5.17(a) of the Indenture.


5.             Purchase by the Company Upon a
Fundamental Change.


Subject
to the terms and conditions set forth in Article 3 of the Indenture, each
Holder shall have the option to require the Company to repurchase its
Securities upon the occurrence of a Fundamental Change.


7.             Redemption.


Subject
to the terms and conditions set forth in Article 3 of the Indenture, the
Company may redeem the Securities at a redemption price payable in Cash equal
to 100% of the principal amount of the Securities to be redeemed, plus any
accrued and unpaid interest to, but not including, the Redemption Date, and the
Coupon Make-Whole Payment, if (a) the Closing Price of the Common Stock for at
least 20 Trading Days in any 30 consecutive Trading Day period is at least 130%
of the Applicable Conversion Price per share and (b) the shelf registration
statement covering resales of the Securities and the Common Stock issuable upon
conversion of the Securities is effective and available for use pursuant to the
terms of the Registration Rights Agreement and is expected to remain effective
and available for use for the 30 days following the redemption date, unless
registration is no longer required.


8.             Conversion.


Subject
to the terms and conditions set forth in Article 4 of the Indenture, the
Securities shall be convertible into shares of Common Stock, Cash or a
combination of Cash and shares of Common Stock, at the Company’s election.  In addition, upon the occurrence of a
Make-Whole Fundamental Change, the Company may increase the Conversion Rate for
Securities converted in connection with a Make-Whole Fundamental Change.


9.             Denominations; Transfer;
Exchange.


The
Securities are in registered form, without coupons, in denominations of $1,000
and integral multiples of $1,000.  A
Holder may register the transfer of or exchange Securities in accordance with
the Indenture.  The Registrar may require
a Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay certain taxes, assessments 



 6
 









or other governmental charges that may be imposed in
relation thereto by law or permitted by the Indenture.


10.           Persons Deemed Owners.


The
registered Holder of a Security may be treated as the owner of such Security
for all purposes.


11.           Unclaimed
Money or Securities.


The
Trustee and the Paying Agent shall return to the Company upon written request
any Cash or securities held by them for the payment of any amount with respect
to the Securities that remains unclaimed for two years, subject to applicable
unclaimed property law.  After return to the
Company, Holders entitled to the Cash or securities must look to the Company
for payment as general creditors unless an applicable abandoned property law
designates another person.


12.           Amendment, Supplement and Waiver.


Subject
to certain exceptions, the Securities or the Indenture may be amended or
supplemented with the consent of the Holders of at least a majority in
aggregate principal amount of the Securities then outstanding, and, subject to
certain exceptions, an existing or future Default or Event of Default with
respect to the Securities and its consequences or compliance with any provision
of the Securities or the Indenture may be waived with the consent of the
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding.  Subject to the terms
of the Indenture, without the consent of or notice to any Holder, the Company
and the Trustee may amend or supplement the Indenture or the Securities to,
among other things, cure any ambiguity, omission, defect or inconsistency or
make any change that does not adversely affect in any material respect the
interests under the Indenture of any Holder.


13.           Defaults
and Remedies.


Subject
to certain exceptions set forth in the Indenture, if an Event of Default
(excluding an Event of Default specified in Sections 8.01(i) or 8.01(j) of the
Indenture) occurs and is continuing, the Trustee may, by notice to the Company,
or the Holders of at least twenty five percent (25%) in aggregate principal
amount of the Securities then outstanding, by notice to the Company and the
Trustee, declare the Securities to be due and payable.  Upon such declaration, the principal of, and
accrued and unpaid interest on, all Securities then outstanding shall be due
and payable immediately.  If an Event of
Default specified in Sections 8.01(i) or 8.01(j) of the Indenture occurs, the
principal of, and accrued and unpaid interest on, all the Securities then
outstanding shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.


14.           Subordination.


If
the Collateral Price Trigger is satisfied, the indebtedness evidenced by the
Securities will automatically and irrevocably become, to the extent and in the
manner provided in the Indenture, expressly subordinate and subject in right of
payment to the prior payment in full of 



 7
 









all Senior Indebtedness of the Company, as defined in
the Indenture, whether outstanding at the date of the Indenture or thereafter
incurred, and this Security is issued subject to the provisions of the
Indenture with respect to such subordination. 
Each Holder of this Security, by accepting the same, agrees to and shall
be bound by such provisions and authorizes the Trustee on its behalf to take
such action as may be necessary or appropriate to effectuate the subordination
so provided and appoints the Trustee his attorney-in-fact for such purpose.


15.           Guarantees.


Subject
to release as provided in Section 13.03 of the Indenture, the Securities are
fully and unconditionally guaranteed, on a senior, secured basis, by each of
the Subsidiary Guarantors on the terms set forth in the Indenture.


16.           Certain
Covenants.


Subject
to release as provided in Section 5.14 of the Indenture, each of the Company
and the Subsidiary Guarantors is, to the extent and in the manner provided in
the Indenture, restricted in its ability to Incur Debt and Disqualified or
Preferred Stock, to make Restricted Payments, incur or permit to exist certain
Liens and to make any Asset Sale unless certain conditions specified in the
Indenture are met.


17.           Collateral.


Subject
to release as provided in Section 5.17 of the Indenture, the Holders of the
Securities have the benefit of a first-priority security interest on the
Collateral.


18.           Trustee Dealings with the Company.


Subject
to certain limitations imposed by the TIA, the Trustee under the Indenture, in
its individual or any other capacity, may become the owner or pledgee of
Securities and may otherwise deal with and collect obligations owed to it by
the Company or its Affiliates and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not the Trustee.


19.           Authentication.


This
Security shall not be valid until the Trustee or an authenticating agent
manually signs the certificate of authentication on the other side of this
Security.


20.           Abbreviations.


Customary abbreviations
may be used in the name of the Holder or an assignee, such as: TEN COM (=
tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian) and UGMA (= Uniform Gifts to Minors Act).


21.           INDENTURE TO CONTROL; GOVERNING
LAW.



 8
 









TO
THE EXTENT PERMITTED BY APPLICABLE LAW, IF ANY PROVISION OF THIS SECURITY CONFLICTS
WITH THE EXPRESS PROVISIONS OF THE INDENTURE, THE PROVISIONS OF THE INDENTURE
SHALL GOVERN AND BE CONTROLLING.  THIS
SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.


23.           Copies
of Indenture.


The
Company shall furnish to any Holder, upon written request and without charge, a
copy of the Indenture.  Requests may be
made to:  Evergreen Energy Inc., 1225
17th Street, Suite 1300, Colorado 80202, Facsimile: (303) 293-8430, Attention:
Chief Financial Officer.


24.           Registration Rights.


The Holders of the
Securities are entitled to the benefits of a Registration Rights Agreement,
dated as of July 30, 2007, between the Company, the Subsidiary Guarantors and
the Initial Purchasers, including, in certain circumstances, the receipt of
Additional Interest upon a registration default (as defined in such agreement).


 



 9














SCHEDULE OF INCREASES OR DECREASES


The
initial principal amount of this Global Security is NINETY-FIVE MILLION DOLLARS
($95,000,000).  The following increases
or decreases in part of this Global Security have been made:


	
  DATE OF

  DECREASE OR

  INCREASE

  	
   

  	
  AUTHORIZED

  SIGNATORY OF

  SECURITIES

  	
   

  	
  DECREASE IN

  PRINCIPAL

  AMOUNT OF

  THIS GLOBAL

  SECURITY

  	
   

  	
  INCREASE IN

  PRINCIPAL

  AMOUNT OF

  THIS GLOBAL

  SECURITY

  	
   

  	
  PRINCIPAL

  AMOUNT OF

  THIS GLOBAL

  SECURITY

  FOLLOWING

  SUCH DECREASE

  OR INCREASE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 











ASSIGNMENT FORM


To
assign this Security, fill in the form below:


I
or we assign and transfer this Security to


	
  

  
	
  (Insert
  assignee’s soc. sec. or tax ID no.)

  
	
   

  
	
   

  
	
  (Print or type
  assignee’s name, address and zip code)

  



 


and
irrevocably appoint the agent to transfer this Security on the books of the
Company.  The agent may substitute
another to act for him.


	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Sign exactly as your name appears on the other side
  of this Security)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature Guaranteed

  	
   

  	
   

  	
   

  
	
  Participant in a Recognized Signature

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Guarantee Medallion Program

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  	
   

  	
   

  



 











FORM OF CONVERSION NOTICE


To
convert the entire principal amount represented by this Security into shares of
Common Stock, Cash or Cash and shares of Common Stock, at the Company’s
election, and as provided in the Indenture check the box  o


To
convert only part of this Security, state the principal amount to be converted
(which must be $1,000 or a multiple of $1,000): 


If
you want the stock certificate made out in another person’s name, fill in the
form below:


	
  

  
	
  (Insert
  assignee’s soc. sec. or tax ID no.)

  
	
   

  
	
   

  
	
  (Print or type
  assignee’s name, address and zip code)

  



 


The
undersigned (the “Applicant”) hereby makes application for the issuance of
record to the name of the Applicant of shares of Common Stock.


	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Sign exactly as your name appears on the other side
  of this Security)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature Guaranteed

  	
   

  	
   

  	
   

  
	
  Participant in a Recognized Signature

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Guarantee Medallion Program

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  	
   

  	
   

  



 











FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE


U.S. Bank National
Association

60 Livingston Avenue

St. Paul, Minnesota 55107-2292

Attention: Corporate Trust Services 

(Evergreen Energy 8.00% Convertible Secured Notes due 2012)


Re:                               Evergreen
Energy Inc. (the “Company”)

8.00% Convertible Secured Notes due 2012


This
is a Fundamental Change Purchase Notice as defined in Section 3.03(c) of the
Indenture, dated as of July 30, 2007 (the “Indenture”), between the Company, as
issuer, Evergreen Operations, LLC, KFx Plant, LLC, KFx Operations, LLC, Buckeye
Industrial Mining Co., and Landrica Development Company, as subsidiary
guarantors, and U.S. Bank National Association, as Trustee.  Terms used but not defined herein shall have
the meanings ascribed to them in the Indenture.


Certificate
No(s). of Securities:


I
intend to deliver the following aggregate principal amount of Securities for
purchase by the Company pursuant to Section 3.03(a) of the Indenture (in
multiples of $1,000):


$


I
hereby agree that the Securities shall be purchased on the Fundamental Change
Purchase Date pursuant to the terms and conditions specified in paragraph 5 of
the Securities and in Article 3 of the Indenture.


	
  Print Name of Holder:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  
	
   

  	
  (Sign exactly as your name appears on the other side
  of this Security)

  	
   

  



 











CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR

REGISTRATION OF TRANSFER OF RESTRICTED SECURITIES


Re:                               8.00%
Convertible Secured Notes due 2012

(the “Securities”) of Evergreen Energy Inc.


This
certificate relates to $                       
 principal amount of Securities owned in
(check applicable box):


o 
book-entry or  o  definitive
form


by                                                                                                                            (the “Transferor”).


The
Transferor has requested a Registrar or the Trustee to exchange or register the
transfer of such Securities.  In
connection with such request and in respect of each such Security, the Transferor
does hereby certify that the Transferor is familiar with transfer restrictions
relating to the Securities as provided in Section 2.12 of the Indenture, dated
as of July 30, 2007, between Evergreen Energy Inc., as issuer, Evergreen
Operations, LLC, KFx Plant, LLC, KFx Operations, LLC, Buckeye Industrial Mining
Co., and Landrica Development Company, as subsidiary guarantors, and U.S. Bank
National Association, as trustee (the “Indenture”),
and either the transfer of such Security is being made pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the
“Securities Act”) (check applicable box) or the transfer or exchange, as the
case may be, of such Security does not require registration under the
Securities Act because (check applicable box):


o            Such
Security is being transferred pursuant to an effective registration statement
under the Securities Act.


o            Such Security is being acquired for the
Transferor’s own account, without transfer.


o            Such Security is being transferred to the
Company or a Subsidiary (as defined in the Indenture) of the Company.


o            Such Security is being transferred to a
person the Transferor reasonably believes is a “qualified institutional buyer”
(as defined in Rule 144A or any successor provision thereto (“Rule 144A”) under
the Securities Act) to whom notice has been given that the transfer is being
made in reliance on such Rule 144A, in reliance on Rule 144A.


o            Such Security is being transferred pursuant
to and in compliance with an exemption from the registration requirements under
the Securities Act in accordance with Rule 144 (or any successor thereto)
(“Rule 144”) under the Securities Act.


o            Such Security is being transferred pursuant
to and in compliance with an exemption from the registration requirements of
the Securities Act (other than an exemption referred to above).











The
Transferor acknowledges and agrees that, if the transferee will hold any such
Securities in the form of beneficial interests in a Global Security that is a
“restricted security” within the meaning of Rule 144 under the Securities Act,
then such transfer can be made only pursuant to Rule 144A under the Securities
Act to a transferee that the transferor reasonably believes is a “qualified
institutional buyer,” as defined in Rule 144A.


	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature(s) of Transferor:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Sign exactly as your name appears on the other side
  of this Security)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature Guaranteed

  	
   

  	
   

  	
   

  
	
  Participant in a Recognized Signature

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Guarantee Medallion Program

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  	
   

  	
   

  



 















EXHIBIT B


The following
table sets forth the increase in the Conversion Rate, expressed as a number of
Additional Shares to be received per $1,000 principal amount of Securities,
upon a conversion in connection with a Make-Whole Fundamental Change that occurs
in the corresponding period.




	
  

  	
   

  	
  Effective Date

  	
   

  
	
  Stock Price

  	
   

  	
  8/1/2007

  	
   

  	
  8/1/2008

  	
   

  	
  8/1/2009

  	
   

  	
  8/1/2010

  	
   

  	
  8/1/2011

  	
   

  	
  8/1/2012

  	
   

  
	
  $3.75

  	
   

  	
  76.19

  	
   

  	
  76.19

  	
   

  	
  76.19

  	
   

  	
  76.19

  	
   

  	
  76.19

  	
   

  	
  76.19

  	
   

  
	
  $4.00

  	
   

  	
  73.43

  	
   

  	
  72.42

  	
   

  	
  71.76

  	
   

  	
  70.43

  	
   

  	
  67.23

  	
   

  	
  59.52

  	
   

  
	
  $4.50

  	
   

  	
  56.48

  	
   

  	
  54.67

  	
   

  	
  53.50

  	
   

  	
  51.13

  	
   

  	
  45.44

  	
   

  	
  31.75

  	
   

  
	
  $5.00

  	
   

  	
  39.96

  	
   

  	
  38.47

  	
   

  	
  37.58

  	
   

  	
  35.51

  	
   

  	
  30.43

  	
   

  	
  9.52

  	
   

  
	
  $5.50

  	
   

  	
  26.63

  	
   

  	
  25.50

  	
   

  	
  24.99

  	
   

  	
  23.32

  	
   

  	
  19.23

  	
   

  	
  0.00

  	
   

  
	
  $6.00

  	
   

  	
  15.85

  	
   

  	
  15.25

  	
   

  	
  15.01

  	
   

  	
  13.77

  	
   

  	
  10.80

  	
   

  	
  0.00

  	
   

  
	
  $6.50

  	
   

  	
  7.46

  	
   

  	
  7.42

  	
   

  	
  7.38

  	
   

  	
  6.53

  	
   

  	
  4.70

  	
   

  	
  0.00

  	
   

  
	
  $7.00

  	
   

  	
  2.67

  	
   

  	
  2.52

  	
   

  	
  2.43

  	
   

  	
  1.93

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  
	
  $7.50

  	
   

  	
  0.72

  	
   

  	
  0.56

  	
   

  	
  0.39

  	
   

  	
  0.22

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  
	
  $8.00

  	
   

  	
  0.15

  	
   

  	
  0.10

  	
   

  	
  0.05

  	
   

  	
  0.03

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  
	
  $8.50

  	
   

  	
  0.05

  	
   

  	
  0.03

  	
   

  	
  0.02

  	
   

  	
  0.01

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  
	
  $9.00

  	
   

  	
  0.02

  	
   

  	
  0.02

  	
   

  	
  0.01

  	
   

  	
  0.01

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  
	
  $9.50

  	
   

  	
  0.02

  	
   

  	
  0.02

  	
   

  	
  0.01

  	
   

  	
  0.01

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  
	
  $10.00

  	
   

  	
  0.02

  	
   

  	
  0.02

  	
   

  	
  0.01

  	
   

  	
  0.01

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  
	
  $10.50

  	
   

  	
  0.02

  	
   

  	
  0.01

  	
   

  	
  0.01

  	
   

  	
  0.01

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  
	
  $11.00

  	
   

  	
  0.01

  	
   

  	
  0.01

  	
   

  	
  0.01

  	
   

  	
  0.01

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  
	
  $11.50

  	
   

  	
  0.01

  	
   

  	
  0.01

  	
   

  	
  0.01

  	
   

  	
  0.01

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  
	
  $12.00

  	
   

  	
  0.01

  	
   

  	
  0.01

  	
   

  	
  0.01

  	
   

  	
  0.01

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  
	
  $12.50

  	
   

  	
  0.01

  	
   

  	
  0.01

  	
   

  	
  0.01

  	
   

  	
  0.01

  	
   

  	
  0.00

  	
   

  	
  0.00