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Exhibit 10.11    
    

 
  AMENDED AND RESTATED SUBSCRIPTION AGREEMENT    
    

        SUBSCRIPTION AGREEMENT (this "Agreement") made as of this 29th day of February, 2008 for the benefit of Wattles Acquisition Corp., a Delaware
corporation (the "Company"), having its principal place of business at 321 West 84th Ave., Suite A, Thornton, CO 80260 by Wattles Capital, LLC (the "Initial Subscriber"), Alexander M.
Bond, Timothy R. Price, Thomas McKivor, Edward Shapiro, WAC Holdings, L.P. and David Jacquin (collectively with the Initial Subscriber, the "Subscribers"). 

        WHEREAS,
the Company and the Initial Subscriber entered into a Subscription Agreement (the "Original Subscription Agreement") on November 13, 2007, pursuant to which the Initial
Subscriber agreed to purchase warrants of the Company; 

        WHEREAS,
the parties intend this Agreement to modify, amend and supercede the Original Subscription Agreement; 

        WHEREAS,
the Company desires to sell on a private placement basis (the "Offering") an aggregate of 5,750,000 warrants (the "Warrants") of the Company for a purchase price of $1.00 per
Warrant. Each Warrant is exercisable to purchase one share of the Company's common stock, par value $0.0001 per share (the "Common Stock") at an exercise price of $7.50 per share during the period
commencing on the later of: (i) the date that is 12 months from the date of the final prospectus relating to the Company's IPO (as defined below) and (ii) the date on which the
Company completes its Business Combination (as defined in Section 5 below) and shall end on the earlier of: (i) the date that is four years from the date of the Company's final
prospectus for the Company's IPO and (ii) the Business Day (as defined below) preceding the date on which such Warrants are redeemed or otherwise expire. For purposes of this Agreement,
"Business Day" means any day on which the American Stock Exchange is open for trading and which is not a Saturday, a Sunday or any other day on which banks in the City of New York, New York, are
authorized or required by law to close; and 

        WHEREAS,
the Subscribers wish to purchase the Warrants and the Company wishes to accept such subscription. 

        NOW,
THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Subscribers hereby agree as follows: 

        1.    Agreement to Subscribe    

        1.1.    Purchase and Issuance of the Warrants.    Upon the terms and subject to the conditions of this Agreement, the
Subscribers hereby agree to purchase from the Company, and the Company hereby agrees to sell to the Subscribers, on the Closing Date, the Warrants for an aggregate purchase price of $5,750,000 (the
"Purchase Price") in the amounts corresponding 

 

with
the subscription amount ("Subscription Amount") set forth opposite each Subscriber's name on Schedule I hereto. 

        1.2.    Delivery of the Purchase Price.    Upon execution of this Agreement, the undersigned are hereby bound to
fulfill their obligations hereunder and hereby irrevocably commit to deliver into a trust account (the "Trust Account") at a financial institution to be chosen by the Company, maintained by American
Stock Transfer & Trust Company, acting as trustee, on the Closing Date (as defined below), the Subscription Amount in immediately available funds by certified bank check, wire transfer or such
other form of payment as shall be acceptable to the Trustee, in its sole and absolute discretion, at the Closing. 

        1.3.    Closing.    The closing (the "Closing") of the Offering, shall take place at the offices of the Company,
immediately prior to the effective date of the registration statement pursuant to which the Company proposes to register its initial public offering (the "IPO") of 20,000,000 units, each unit
consisting of one share of common stock and one warrant (the "Closing Date"). 

        2.    Representations and Warranties of the Subscribers    

        Each
Subscriber represents and warrants, severally and not jointly, to the Company that: 

        2.1.    No Government Recommendation or Approval.    Each Subscriber understands that no United States federal or
state agency has passed upon or made any recommendation or endorsement of the Company or the Offering of the Warrants or the Common Stock underlying the Warrants (the "Warrant Shares" and,
collectively with the Warrants, the "Securities"). 

        2.2.    Regulation D Offering.    Each Subscriber represents that it is an "accredited investor" as such term
is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the "Securities Act") and acknowledges the sale contemplated hereby is being made in reliance on a
private placement exemption to "accredited investors" within the meaning of Section 501(a) of Regulation D under the Securities Act or similar exemptions under state law and,
accordingly, the Securities will be "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act, and therefore may not be offered, pledged or sold by him, directly or
indirectly, in the United States without registration under United States federal and state securities laws and each Subscriber understands the certificates representing such securities will contain a
legend in respect of such restrictions. 

        2.3.    Intent.    Each Subscriber is purchasing the Warrants solely for investment purposes, for each Subscriber's
own account and not for the account or benefit of any U.S. Person, and not with a view towards the distribution thereof and each Subscriber has no present arrangement to sell the Securities to or
through any person or entity. Each Subscriber shall not engage in hedging transactions with regard to the Warrants and the underlying securities unless in compliance with the Securities Act. 

        2.4.    Restrictions on Transfer.    Each Subscriber acknowledges and understands the Warrants are being offered in a
transaction not involving a public offering in the United States within the meaning of the Securities Act. The Securities have not been registered under the 

2

 

Securities
Act, and, if in the future a Subscriber decides to offer, resell, pledge or otherwise transfer the Securities, such Securities may be offered, resold, pledged or otherwise transferred only
(i) pursuant to an effective registration statement filed under the Securities Act, (ii) pursuant to an exemption from registration under Rule 144 promulgated under the Securities
Act, if available, or (iii) pursuant to any other available exemption from the registration requirements of the Securities Act, and in each case in accordance with any applicable securities
laws of any state or any other jurisdiction. Each Subscriber agrees that if any transfer of its Securities or any interest therein is proposed to be made, as a condition precedent to any such
transfer, such Subscriber may be required to deliver to the Company an opinion of counsel satisfactory to the Company. Absent registration or another available exemption
from registration, each Subscriber agrees it will not resell the Securities. Each Subscriber explicitly understands and acknowledges the Securities and Exchange Commission (the "SEC") has taken the
position the Subscriber would be considered a promoter under the Securities Act and that promoters or affiliates of a blank check company and their transferees, both before and after a business
combination, would act as "underwriters" under the Securities Act when reselling the securities of that blank check company. Accordingly, Rule 144 promulgated under the Securities Act will not
be available to any Subscriber for the resale of the Securities despite technical compliance with the requirements of Rule 144, in which event the resale transactions would need to be made
through a registered offering. 

        2.5.    Sophisticated Investor.    

        (i)    Each
Subscriber is sophisticated in financial matters and is able to evaluate the risks and benefits of the investment in the Securities. 

        (ii)   Each
Subscriber is aware that an investment in the Warrants is highly speculative and subject to substantial risks because, among other things, none of the Securities
have been registered under the Securities Act and therefore cannot be sold unless subsequently registered under the Securities Act or an exemption from such registration is available. Each Subscriber
is able to bear the economic risk of its investment in the Securities for an indefinite period of time. 

        2.6.    Independent Investigation.    Each Subscriber, in making the decision to purchase the Warrants, has relied
upon an independent investigation of the Company and has not relied upon any information or representations made by any third parties or upon any oral or written representations or assurances from the
Company, its officers, directors or employees or any other representatives or agents of the Company, other than as set forth in this Agreement. Each Subscriber is familiar with the business,
operations and financial condition of the Company and has had an opportunity to ask questions of, and receive answers from, the Company's officers and directors concerning the Company and the terms
and conditions of the offering of the Warrants and has had full access to such other information concerning the Company as the Subscriber has requested. Each Subscriber confirms that all documents
that it has requested have been made available and that the Each Subscriber has been supplied with all of the additional information concerning this investment which Subscriber has requested. 

3

 

        2.7.    Authority.    This Agreement has been validly authorized, executed and delivered by each Subscriber and is a
valid and binding agreement enforceable in accordance with its terms, subject to the general principles of equity and to bankruptcy or other laws affecting the enforcement of creditors' rights
generally. The execution, delivery and performance of this Agreement by each Subscriber does not and will not conflict with, violate or cause a breach of any agreement, contract or instrument to which
Subscriber is a party. 

        2.8.    No Legal Advice from Company.    Each Subscriber acknowledges it has had the opportunity to review this
Agreement and the transactions contemplated by this Agreement and the other agreements entered into between the parties hereto with the Subscriber's own legal counsel and investment and tax advisors.
Except for any statements or representations of the Company made in this Agreement and the other agreements entered into between the parties hereto, each Subscriber is relying solely on such counsel
and advisors and not on any statements or representations of the Company or any of its representatives or agents for legal, tax or investment advice with respect to this investment, the transactions
contemplated by this Agreement or the securities laws of any jurisdiction. 

        2.9.    Reliance on Representations and Warranties.    Each Subscriber understands the Warrants are being offered and
sold to such Subscriber in reliance on exemptions from the registration requirements under the Securities Act, and analogous provisions in the laws and regulations of various states, and that the
Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the Subscriber set forth in this Agreement in order to determine
the applicability of such provisions. 

        2.10.    No General Solicitation or Advertising.    None of the Subscribers entered into this Agreement as a result of
any general solicitation or general advertising within the meaning of Rule 502 under the Securities Act. 

        2.11.    Legend.    Each Subscriber acknowledges and agrees the certificates evidencing the Warrants and the Warrant
Shares shall bear a restrictive legends (the "Legends"), in form and substance as set forth in Section 4 hereof, prohibiting the offer, sale, pledge or transfer of the securities, except
(i) pursuant to an effective registration statement covering these securities under the Securities Act or (ii) pursuant to any other exemptions from the registration requirements under
the Securities Act and such laws which, in the opinion of counsel, is available. 

        3.    Representations and Warranties of the Company    

        The
Company represents and warrants to each Subscriber that: 

        3.1.    Valid Issuance of Capital Stock.    The total number of shares of all classes of capital stock which the
Company will have authority to issue is 75,000,000 shares of Common Stock and 1,000,000 shares of Preferred Stock. As of the date hereof, the Company has 5,750,000 shares of Common Stock and no shares
of Preferred Stock issued and outstanding. All of the issued shares of capital stock of the Company have been duly authorized, validly issued, and are fully paid and non-assessable. 

4

 

        3.2.    Organization and Qualification.    The Company is a corporation duly incorporated and existing in good
standing under the laws of the state of Delaware and has the requisite corporate power to own its properties and assets and to carry on its business as now being conducted. 

        3.3.    Authorization; Enforcement.    (i) The Company has the requisite corporate power and authority to enter into
and perform its obligations under this Agreement and to issue the Warrants and the underlying securities in accordance with the terms hereof, (ii) the execution, delivery and performance of
this Agreement by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary corporate action, and no further consent or authorization of
the Company or its Board of Directors or stockholders is required, and (iii) this Agreement constitutes valid and binding obligations of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, moratorium, reorganization, or similar laws relating to, or
affecting generally the enforcement of, creditors' rights and remedies or by equitable principles of general application and except as enforcement of rights to indemnity and contribution may be
limited by federal and state securities laws or principles of public policy. 

        3.4.    No Conflicts.    The execution, delivery and performance of this Agreement and the consummation by the Company
of the transactions contemplated hereby do not (i) result in a violation of the Company's Certificate of Incorporation or Bylaws or (ii) conflict with, or constitute a default under any
agreement, indenture or instrument to which the Company is a party. Other than any SEC or state securities filings which may be required to be made by the Company subsequent to the Closing, and any
registration statement which may be filed pursuant thereto, the Company is not required under federal, state or local law, rule or regulation to obtain any consent, authorization or order of, or make
any filing or registration with, any court or governmental agency or self-regulatory entity in order for it to perform any of its obligations under this Agreement or issue the Common Stock
in accordance with the terms hereof. 

        4.    Legends    

        4.1.    Legend.    The Company will issue the Warrants, and when issued, the Warrant Shares, purchased by the
Subscribers in the name of the Subscribers. The Warrants will bear the following Legend and appropriate "stop transfer" instructions: 

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE (INCLUDING THE SHARES OF COMMON STOCK OF THE COMPANY ISSUABLE UPON EXERCISE OF SUCH SECURITIES) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. IN ADDITION, THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO 

5

 

CERTAIN
TRANSFER RESTRICTIONS SET FORTH IN A WARRANT AGREEMENT AND UNDER AN ESCROW AGREEMENT. SECURITIES EVIDENCED BY THIS CERTIFICATE AND SHARES OF COMMON STOCK OF THE COMPANY ISSUABLE UPON EXERCISE
OF SUCH SECURITIES WILL BE ENTITLED TO REGISTRATION RIGHTS UNDER A REGISTRATION RIGHTS AGREEMENT. 

        The
Warrant Shares shall bear the following Legend and appropriate "stop transfer" instructions: 

"THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY
INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR SUCH LAWS OR AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL, IS AVAILABLE. 

SECURITIES
EVIDENCED BY THIS CERTIFICATE WILL BE ENTITLED TO REGISTRATION RIGHTS UNDER A REGISTRATION RIGHTS AGREEMENT TO BE EXECUTED BY THE COMPANY. 

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN A SECURITIES ESCROW AGREEMENT (THE "AGREEMENT") AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED
OR OTHERWISE DISPOSED DURING THE TERM OF THE ESCROW PERIOD (AS DEFINED IN THE AGREEMENT)." 

        4.2.    Subscribers' Compliance.    Nothing in this Section 4 shall affect in any way the Subscribers'
obligations and agreements to comply with all applicable securities laws upon resale of the Securities. 

        4.3.    Company's Refusal to Register Transfer of the Securities.    The Company shall refuse to register any transfer
of the Securities, if in the sole judgment of the Company such purported transfer would not be made (i) pursuant to an effective registration statement filed under the Securities Act, or
(ii) pursuant to an available exemption from the registration requirements of the Securities Act. 

        5.    Escrow.    Upon consummation of the IPO, the holders of the Warrants shall enter into a securities escrow
agreement (the "Escrow Agreement") with American Stock Transfer & Trust Company, whereby the Warrants shall be held in escrow until the earlier of: (i) 30 days following the
consummation of a Business Combination and (ii) the consummation of a transaction after the Company's Business Combination that results in all of the Company's 

6

 

stockholders
at the time of the transaction having the right to exchange their shares of Common Stock for cash, securities or other property. 

        6.    Securities Laws Restrictions.    

        In
addition to the restrictions contained in the Escrow Agreement and the warrant agreement to be entered into between American Stock Transfer & Trust Company and the Company upon
the consummation of the IPO, each Subscriber agrees not to sell, transfer, pledge, hypothecate or otherwise dispose of all or any part of the Securities unless, prior thereto (i) a registration
statement on the appropriate form under the Securities Act and applicable state securities laws with respect to the Securities proposed to be transferred shall then be effective or (ii) the
Company shall have received an opinion from counsel that such registration is not required because such transaction complies with the Securities Act and the rules promulgated by the Securities and
Exchange Commission thereunder and with all applicable state securities laws. 

        7.    Waiver of Liquidation Distributions.    

        In
connection with the Securities purchased pursuant to this Agreement, and with respect to any Common Stock purchased by the Subscribers prior to the private placement, ach Subscriber
hereby waives any and all right, title, interest or claim of any kind in or to any liquidating distributions by the Company in the event of a liquidation of the Company upon the Company's failure to
timely complete a Business Combination. For purposes of clarity, in the event Subscriber purchases shares of Common Stock in the IPO or in the aftermarket, any additional shares so purchased shall be
eligible to receive
any liquidating distributions by the Company. In no event will a Subscriber have the right to exercise any Warrants prior to the later of: (i) the date that is 12 months from the date of
the final prospectus relating to the Company's IPO and (ii) the date on which the Company completes its Business Combination. 

        8.    Forfeiture of Warrants.    

        8.1.    Failure to Consummate Business Combination.    The Warrants shall be forfeited to the Company in the event
that the Company does not consummate a Business Combination within 24 months from the date of the final prospectus relating to the Company's IPO. 

        8.2.    Termination of Rights as holder; Escrow.    If the Warrants are forfeited in accordance with this
Section 8, then after such time the Subscribers (or successor in interest), shall no longer have any rights as a holder of such Warrants, and the Company shall take such action as is
appropriate to cancel such Warrants. To effectuate the foregoing, all certificates representing the Warrants shall be held in escrow as provided in Section 5 hereof. In addition, each
Subscriber hereby irrevocably grants the Company a limited power of attorney for the purpose of effectuating the foregoing. 

        9.    Rescission Right Waiver and Indemnification.    

        9.1.  Each
Subscriber understands and acknowledges an exemption from the registration requirements of the Securities Act requires there be no general solicitation of
purchasers of the Warrants. In this regard, if the IPO were deemed to be a general solicitation 

7

 

with
respect to the Warrants, the offer and sale of such Warrants may not be exempt from registration and, if not, the Subscribers may have a right to rescind its purchase of the Warrants. In order to
facilitate the completion of the Offering and in order to protect the Company, its stockholders and the trust account from claims that may adversely affect the Company or the interests of its
stockholders, each Subscriber hereby agrees to waive, to the maximum extent permitted by applicable law, any claims, right to sue or rights in law or arbitration, as the case may be, to seek
rescission of its purchase of the Warrants. Each Subscriber acknowledges and agrees this waiver is being made in order to induce the Company to sell the Warrants to the Subscribers. Each Subscriber
agrees the foregoing waiver of rescission rights shall apply to any and all known or unknown actions, causes of action, suits, claims or proceedings (collectively, "Claims") and related losses, costs,
penalties, fees, liabilities and damages, whether compensatory, consequential or exemplary, and expenses in connection therewith, including reasonable attorneys' and expert witness fees and
disbursements and all other expenses reasonably incurred in investigating, preparing or defending against any Claims, whether pending or threatened, in
connection with any present or future actual or asserted right to rescind the purchase of the Warrants hereunder or relating to the purchase of the Warrants and the transactions contemplated hereby. 

        9.2.  Each
Subscriber agrees not to seek recourse against the Trust Account for any reason whatsoever in connection with its purchase of the Warrants or any Claim that may
arise now or in the future. 

        9.3.  Each
Subscriber acknowledges and agrees the stockholders of the Company, UBS Securities LLC and Ladenburg Thalmann & Co., Inc. are and shall
be third-party beneficiaries of the foregoing provisions of this Agreement. 

        9.4.  Each
Subscriber agrees that to the extent any waiver of rights under this Section 9 is ineffective as a matter of law; the Subscriber has offered such waiver for
the benefit of the Company as an equitable right that shall survive any statutory disqualification or bar that applies to a legal right. Each Subscriber acknowledges the receipt and sufficiency of
consideration received from the Company hereunder in this regard. 

        10.    Terms of the Warrant    

        The
Warrants are substantially identical to the warrants included in the units offered in the IPO, except: (i) they will not have a claim to the funds held in the Trust Account,
(ii) they will be placed in escrow and not released before, except in limited circumstances, until after the consummation of a Business Combination, as more fully described in Section 5,
(iii) they are being purchased in a private placement pursuant to an exemption from the registration requirements of the Securities Act and will become freely tradable only after they are
registered pursuant to a registration rights agreement to be entered on or before the date of the final prospectus relating to the Company's IPO, (iv) they will be non-redeemable so
long as they are held by the initial holder thereof (or any of its permitted transferees), and (v) they are exercisable (a) on a "cashless" basis if held by the initial holder thereof or
its permitted assigns and (b) in the absence of an effective registration statement covering the shares of common stock underlying the warrants. In no event will the Company be required to net
cash settle the Warrant exercise. 

8

 

        11.    Governing Law; Jurisdiction; Waiver of Jury Trial    

        This
Agreement shall be governed by and construed in accordance with the laws of the State of Delaware for agreements made and to be wholly performed within such state. The parties
hereto
hereby waive any right to a jury trial in connection with any litigation pursuant to this Agreement and the transactions contemplated hereby. 

        12.    Assignment; Entire Agreement; Amendment    

        12.1.    Assignment.    Neither this Agreement nor any rights hereunder may be assigned by any party to any other
person other than by Subscriber to a person agreeing to be bound by the terms hereof. 

        12.2.    Entire Agreement.    This Subscription Agreement sets forth the entire agreement and understanding between
the parties as to the subject matter thereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them. 

        12.3.    Amendment.    Except as expressly provided in this Agreement, neither this Agreement nor any term hereof may
be amended, waived, discharged or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge or termination is sought. 

        12.4.    Binding upon Successors.    This Agreement shall be binding upon and inure to the benefit of the parties
hereto and to their respective heirs, legal representatives, successors and permitted assigns. 

        13.    Notices; Indemnity    

        13.1    Notices.    Unless otherwise provided herein, any notice or other communication to a party hereunder shall be
sufficiently given if in writing and personally delivered or sent by facsimile or other electronic transmission with copy sent in another manner herein provided or sent by courier (which for all
purposes of this Agreement shall include Federal Express or other recognized overnight courier) or mailed to said party by certified mail, return receipt requested, at its address provided for herein
or such other address as either may designate for itself in such notice to the other. Communications shall be deemed to have been received when delivered personally, on the scheduled arrival date when
sent by next day or 2-day courier service, or if sent by facsimile upon receipt of confirmation of transmittal or, if sent by mail, then three days after deposit in the mail. If given by
electronic transmission, such notice shall be deemed to be delivered (a) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive
notice; (b) if by a posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (1) such posting and (2) the
giving of such separate notice; and (c) if by any other form of electronic transmission, when directed to the stockholder. 

9

 

        13.2    Indemnification.    Each party shall indemnify the other against any loss, cost or damages (including
reasonable attorney's fees and expenses) incurred as a result of such party's breach of any representation, warranty, covenant or agreement in this Agreement. 

        14.    Counterparts    

        This
Agreement may be executed in one or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts
have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile
transmission or by e-mail delivery of a ".pdf" format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or ".pdf" signature page were an original thereof. 

        15.    Survival; Severability    

        15.1.    Survival.    The representations, warranties, covenants and agreements of the parties hereto shall survive
the Closing. 

        15.2.    Severability.    In the event that any provision of this Agreement becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided that no such severability shall be effective if it
materially changes the economic benefit of this Agreement to any party. 

        16.    Headings.    

        The
titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 

10

 

        This
subscription is accepted by the Company on the 29th day of February, 2008. 

	 	 	WATTLES ACQUISITION CORP.
	

 	
 	
By:	

/s/  MARK WATTLES      
 Name: Mark Wattles

Title: Chairman & Chief Executive Officer
	

 	
 	
WATTLES CAPITAL, LLC
	

 	
 	

By:	

/s/  MARK WATTLES      
 Name: Mark Wattles

Title: Managing Member
	

 	
 	
WAC HOLDINGS, L.P.
	

 	
 	

By:	

/s/  MARK W. STEPHENS      
 Mark W. Stephens, President
	

 	
 	

/s/  ALEXANDER M. BOND      
 Alexander M. Bond
	

 	
 	

/s/  TIMOTHY R. PRICE      
 Timothy R. Price
	

 	
 	

/s/  THOMAS MCKIVOR      
 Thomas McKivor
	

 	
 	

/s/  EDWARD SHAPIRO      
 Edward Shapiro
	

 	
 	

/s/  DAVID JACQUIN      
 David Jacquin

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Schedule I

	Name
	 	Subscription Amount
	 	 

	Wattles Capital, LLC	 	4,932,391	 	 
	

Alexander M. Bond	
 	

47,478	
 	

 
	

Timothy R. Price	
 	

13,348	
 	

 
	

Thomas McKivor	
 	

6,783	
 	

 
	

Edward Shapiro	
 	

250,000	
 	

 
	

WAC Holdings, L.P.	
 	

250,000	
 	

 
	

David Jacquin	
 	

250,000	
 	

 

12

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Exhibit 10.11

AMENDED AND RESTATED SUBSCRIPTION AGREEMENTQuickLinks
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Exhibit 10.39    
    

CONFIDENTIAL

 
 

PROGRAM MANAGEMENT AGREEMENT    
    

EVERGREEN ENERGY INC.

AND

BECHTEL POWER CORPORATION  

 

 

 
 

TABLE OF CONTENTS    
    

	ARTICLE I—DEDICATED PROGRAM MANAGEMENT TEAM	 	4
	

1.1.	
 	

Executive Sponsors. 	
 	

4
	

1.2.	
 	

Program Management Team. 	
 	

4
	

1.3.	
 	

Representatives. 	
 	

4
	

1.4.	
 	

Dedicated Personnel. 	
 	

5
	
ARTICLE II—PROGRAM MANAGEMENT TEAM RESPONSIBLITIES	
 	
5
	

2.1.	
 	

Responsibilities. 	
 	

5
	

2.2.	
 	

Rights to Use Work Product and Intellectual Property Rights. 	
 	

5
	

2.3.	
 	

Standard Plant Program. 	
 	

6
	

2.4.	
 	

TSA Phase. 	
 	

6
	

2.5.	
 	

Scope Book Phase. 	
 	

7
	

2.6.	
 	

EPC Contract Phase. 	
 	

8
	

2.7.	
 	

Delays. 	
 	

8
	
ARTICLE III—BECHTEL BUSINESS DEVELOPMENT	
 	
9
	
ARTICLE IV—TERM AND TERMINATION	
 	
9
	

4.1.	
 	

Term. 	
 	

9
	

4.2.	
 	

Evergreen Termination. 	
 	

9
	

4.3.	
 	

Bechtel Termination. 	
 	

9
	
ARTICLE V—EXCLUSIVITY AND TERMINATION FEE	
 	
10
	

5.1.	
 	

Exclusivity. 	
 	

10
	

5.2.	
 	

Termination Fee. 	
 	

10
	
ARTICLE VI—ASSIGNMENT	
 	
11
	
ARTICLE VII—NOTICES	
 	
11
	
ARTICLE VIII—MISCELLANEOUS	
 	
11
	

8.1.	
 	

Entire Agreement. 	
 	

11
	

8.2.	
 	

Equitable Adjustments. 	
 	

11
	

8.3.	
 	

Amendments. 	
 	

11
	

8.4.	
 	

Binding Nature. 	
 	

12
	

8.5.	
 	

Headings. 	
 	

12
	

8.6.	
 	

Governing Law. 	
 	

12
	

8.7.	
 	

Management Negotiations. 	
 	

12
	

8.8.	
 	

Mediation/Arbitration of Disputes. 	
 	

12
	

8.9.	
 	

Third Party Beneficiaries. 	
 	

12

1

 

	

8.10.	
 	

Confidentiality. 	
 	

13
	

8.11.	
 	

No Waiver. 	
 	

13
	

8.12.	
 	

Further Assurances. 	
 	

13
	

8.13.	
 	

Independent Contractor. 	
 	

13
	

8.14.	
 	

Counterparts. 	
 	

13
	

8.15.	
 	

Consequential Damages. 	
 	

13

	 

	EXHIBIT A	 	FORM OF CONFIDENTIALITY AND RELEASE	 	 
	
EXHIBIT B	
 	

FORM OF EPC AGREEMENT	
 	

 

2

 

 

 
 

PROGRAM MANAGEMENT AGREEMENT    
    

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

 
 

WITNESSETH:    
    

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

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

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

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

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

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

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

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

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

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

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

3

 

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

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

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

ARTICLE I—DEDICATED PROGRAM MANAGEMENT TEAM  

1.1.  Executive Sponsors.  

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

	Evergreen:	 	Kevin Collins; and
	Bechtel:	 	Jeffry Brightman.

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

1.2.  Program Management Team.  

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

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

1.3.  Representatives.  

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

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

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

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

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

4

 

1.4.  Dedicated Personnel.  

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

ARTICLE II—PROGRAM MANAGEMENT TEAM RESPONSIBILITIES  

2.1.  Responsibilities.  

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

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

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

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

5

 

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

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

2.3.  Standard Plant Program.  

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

2.4.  TSA Phase.  

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

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

6

 

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

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

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

2.5.  Scope Book Phase.  

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

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

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

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

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

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

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

7

 

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

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

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

2.6.  EPC Contract Phase.  

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

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

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

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

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

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

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

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

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

2.7.  Delays.  

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

8

 

ARTICLE III—BUSINESS DEVELOPMENT  

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

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

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

ARTICLE IV—TERM AND TERMINATION  

4.1.  Term.  

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

4.2.  Evergreen Termination.  

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

4.3.  Bechtel Termination.  

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

9

 

ARTICLE V—EXCLUSIVITY AND TERMINATION FEE  

5.1.  Exclusivity.  

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

5.2.  Termination Fee.  

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

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

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

	Aggregate Capital Cost
 
	 	Termination Fee

	Equal to or greater than $1,000,000,000	 	$	0
	

$760,000,000 - $999,999,999	
 	
$	

2,000,000
	

$570,000,000 - $759,999,999	
 	
$	

4,000,000
	

$380,000,000 - $569,999,999	
 	
$	

6,000,000
	

$191,000,000 - $379,999,999	
 	
$	

8,000,000
	

$0 - $190,999,999	
 	
$	

10,000,000

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

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

10

 

  ARTICLE VI—ASSIGNMENT  

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

ARTICLE VII—NOTICES  

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

	To Company:	 	Evergreen Inc.

1225 17th Street Suite 1300,

Denver, Colorado, 80202

Attention: Executive Vice President—Engineering

With a simultaneous copy to: General Counsel
	

To Contractor:	
 	

Bechtel Power Corporation

5275 Westview Drive

Frederick, MD 21703-8306

Attention: William R. Elliott

With a simultaneous copy to: Principal Counsel, Bechtel Power Corporation

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

ARTICLE VIII—MISCELLANEOUS  

8.1.  Entire Agreement.  

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

8.2.  Equitable Adjustments.  

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

8.3.  Amendments.  

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

11

 

8.4.  Binding Nature.  

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

8.5.  Headings.  

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

8.6.  Governing Law.  

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

8.7.  Management Negotiations.  

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

8.8.  Mediation/Arbitration of Disputes.  

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

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

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

8.9.  Third Party Beneficiaries.  

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

12

 

8.10.  Confidentiality.  

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

8.11.  No Waiver.  

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

8.12.  Further Assurances.  

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

8.13.  Independent Contractor.  

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

8.14.  Counterparts.  

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

8.15.  Consequential Damages.  

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

[The
remainder of this page is intentionally left blank.] 

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

	 EVERGREEN ENERGY INC.	 
	
By:	

/s/  KEVIN COLLINS      	

 
	 	
 Kevin Collins

Title: President and Chief Executive Officer	 
	
 BECHTEL POWER CORPORATION	

 
	
By:	

/s/  J. JEFFRY BRIGHTMAN      	

 
	 	
 J. Jeffry Brightman

Title: Principal Vice President	 

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QuickLinks

Exhibit 10.39

PROGRAM MANAGEMENT AGREEMENT

TABLE OF CONTENTS

PROGRAM MANAGEMENT AGREEMENT

WITNESSETH

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