10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K

þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2007
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from          to          .

Commission file number 0-31687

EVERGREEN SOLAR, INC.

(Exact name of registrant as specified in its charter)

Delaware	04-3242254
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
138 Bartlett Street Marlboro, Massachusetts	01752
(Address of principal executive offices)	(zip code)

(508) 357-2221
(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, Par Value $.01 Per Share	Nasdaq Global Market

Securities registered pursuant to Section 12(g) of the Act:

None

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes þ     No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.  Yes o     No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ     No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ Accelerated filer o Non-accelerated filer o
(Do not check if a smaller reporting company) Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes o     No þ

The aggregate market value of the registrant’s voting and non-voting common equity held by non-affiliates as of June 30, 2007 was approximately $917 million.

As of February 15, 2008, there were 120,987,715 shares of the registrant’s Common Stock, $.01 par value per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive Proxy Statement to be filed with the Securities and Exchange Commission no later than 120 days after the registrant’s fiscal year ended December 31, 2007, and to be delivered to stockholders in connection with the 2008 Annual Meeting of Stockholders, are herein incorporated by reference in Part III.

TABLE OF CONTENTS

			Page
	Item 1.	Business		3
	Item 1A.	Risk Factors		14
	Item 1B.	Unresolved Staff Comments		31
	Item 2.	Properties		31
	Item 3.	Legal Proceedings		31
	Item 4.	Submission of Matters to a Vote of Security Holders		31
PART II
	Item 5.	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		32
	Item 6.	Selected Financial Data		34
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		35
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		48
	Item 8.	Financial Statements and Supplementary Data		48
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		48
	Item 9A.	Controls and Procedures		48
	Item 9B.	Other Information		49
PART III
	Item 10.	Directors and Executive Officers of the Registrant		49
	Item 11.	Executive Compensation		49
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		50
	Item 13.	Certain Relationships and Related Transactions		50
	Item 14.	Principal Accounting Fees and Services		50
PART IV
	Item 15.	Exhibits, Financial Statement Schedule		50
Consolidated Balance Sheets				F-3
Consolidated Statements of Operations				F-4
Consolidated Statements of Stockholders’ Equity				F-5
Consolidated Statements of Cash Flows				F-6
Notes to Consolidated Financial Statements				F-7
Schedule I — Condensed Financial Information of the Registrant				F-32
Signatures				II-1
EX-10.34 Supply Agreement, dated October 24, 2007
EX-10.35 Memorandum of Understanding, dated October 25, 2007
EX-10.36 Lease Agreement ("MDFA"), dated November 20, 2007
EX-10.37 Project Grant Agreement, dated November 20, 2008
EX-10.38 Project Grant Agreement between Massachusetts Technology, dated November 20, 2008
EX-10.39 Agreement for the Sale and Purchase of Solar Grade Silicon, dated Novmeber 7, 2007
EX-10.40 Subordinated Loan Agreement, dated December 7, 2007
EX-10.41 Supply Agreement between DC Chemical, dated January 30, 2008
Ex-23.1 Consent of PricewaterhouseCoopers LLP
Ex-23.2 Consent of Leipzig, Germany PricewaterhouseCoopers LLP
EX-31.1 Section 302 Certification of CEO
EX-31.2 Section 302 Certification of CFO
EX-32.1 Section 906 Certification of CEO
EX-32.2 Section 906 Certification of CFO
EX-99.1 EverQ GmbH balance sheet for the period ended December 31, 2006
EX-99.2 EverQ GmbH income statement for the period December 20 to December 31, 2006
EX-99.3 EverQ GmbH cash flow for the period December 20 to December 31, 2006
EX-99.4 EverQ GmbH notes to the financial statements for the period December 20 to December 31, 2006
Ex-99.5 Opinion Letter, Leipzig, Germany PricewaterhouseCoopers AG

PART I

Forward-Looking Statements

This Annual Report on Form 10-K, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of this report and the documents incorporated by reference herein, contain forward-looking statements that involve risks, uncertainties and assumptions, including those discussed in “Risk Factors” in Item 1A of this report. If the risks or uncertainties ever materialize or any of the assumptions prove incorrect, our results will differ from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to statements regarding:

•  our future growth, revenue, earnings and gross margin improvement;

•  the Devens facility expansion and other potential capacity expansions and the expected timing of such facilities becoming fully operational and meeting manufacturing capacity goals on schedule and within budget;

•  future warranty expenses;

•  our receipt of public grant awards;

•  capital requirements to respond to competitive pressures and acquire complementary businesses and necessary technologies;

•  costs associated with research and development, building or improving manufacturing facilities, general and administrative expenses and business growth;

•  shifts in our geographic product revenue mix;

•  international expansion of strategic partnerships, manufacturing operations and distribution networks;

•  operating efficiency of manufacturing facilities, including increases in manufacturing scale and technological improvements;

•  the occurrence of and the use of proceeds from sales of our securities;

•  the sufficiency of our cash, cash equivalents, marketable securities and borrowings available under our revolving credit facility to satisfy our anticipated cash requirements;

•  payment of cash dividends;

•  the use of derivative financial instruments to manage foreign currency exchange risks;

•  the potential impact of our critical accounting policies and changes in financial accounting standards or practices;

•  future plans for the EverQ joint venture, including the potential initial public offering;

•  our continued enhancements of thin wafer production and the expected timing and results of such transition;

•  the expected demand for solar energy;

•  our expectations regarding product performance and cost and technological competitiveness;

•  our expectations regarding future silicon supply from our suppliers, and our ability to enter into additional contracts to secure our silicon supply;

•  benefits and expenses resulting from EverQ;

•  the anticipated benefits of our String Ribbon technology and new manufacturing and other developments, including our quad ribbon wafer furnace design;

2

•  the making of strategic investments and the expectation of future benefit from them;

•  our position in the solar power market;

•  our ability to reduce the costs of producing solar products; and

•  our expectations regarding the amount of photovoltaic solar panels that we will be able to produce.

These statements may be identified with such words as “we expect,” “we believe,” “we anticipate” or similar indications of future expectations. These statements are neither promises nor guarantees and involve risks and uncertainties, which could cause our actual results to differ materially from such forward-looking statements. Such risks and uncertainties may include, among other things, macroeconomic and geopolitical trends and events, the execution and performance of contracts by distribution partners, suppliers and other partners, and other risks and uncertainties described herein, including but not limited to the items discussed in “Risk Factors.” We caution readers not to place undue reliance on any forward-looking statements contained in this Annual Report, which speak only as of the date of this Annual Report. We disclaim any obligation to update publicly or revise any such statements to reflect any change in our expectations, or events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in such forward-looking statements.

ITEM 1.   BUSINESS.

BUSINESS OVERVIEW

We develop, manufacture and market solar panels utilizing our proprietary String Ribbon^tm technology. String Ribbon technology is a cost effective process for manufacturing ribbons of crystalline silicon that are then cut into wafers. These wafers are the primary components of photovoltaic, or PV, cells which, in turn, are used to produce solar panels. We believe that our proprietary and patented technologies, combined with our integrated manufacturing process know-how, offer significant cost and manufacturing advantages over competing polysilicon-based PV technologies. With silicon consumption of less than five grams per watt, we believe we are the industry leader in efficient polysilicon consumption and use approximately 50% of the silicon used by conventional sawing wafer production processes.

Through intensive research and design efforts we have significantly enhanced our String Ribbon technology and our ability to manufacture crystalline silicon wafers by developing a quad ribbon wafer furnace, which enables us to grow four silicon ribbons from one furnace compared to two silicon ribbons grown with our dual ribbon furnace presently in use in our prototype facility in Marlboro, Massachusetts. Our quad ribbon furnace incorporates a state of the art automated ribbon cutting technology that we expect will improve our manufacturing process when it is used in future factories. We have used quad ribbon furnaces to produce a limited quantity of solar panels in our Marlboro facility which have been sold to our distribution partners. We believe future enhancements to our technology will enable us to gradually reduce our silicon consumption to approximately two-and-a-half grams per watt by 2012.

Our String Ribbon technology is also used by EverQ, our joint venture with Q-Cells AG, or Q-Cells, the world’s largest independent manufacturer of solar cells, and Renewable Energy Corporation ASA, or REC, one of the world’s largest manufacturers of solar-grade silicon and crystalline wafers. REC is also the main supplier of silicon to EverQ. EverQ began operations in mid-2006 and has grown to approximately 100 megawatts, or MW, of annual production capacity as of December 31, 2007. One MW of electricity is enough to power approximately 250 homes per year on average. We believe our proven success at our Marlboro facility and the successful scale up of EverQ’s manufacturing capacity demonstrate our ability to build and operate fully integrated wafer, cell and panel facilities using String Ribbon technology in a cost-effective manner.

Our quad ribbon furnaces will be used in our new manufacturing facility in Devens, Massachusetts, which we began constructing in September 2007. We expect to begin production of solar panels at the Devens facility upon completion of phase I of its development, or Devens I, which is scheduled to occur in mid-2008. Upon reaching full production capacity, which we expect to take place in early 2009, Devens I is expected to

3

increase our current manufacturing capacity of 15 MW by approximately 80 MW. In addition, in March 2008 we expect to substantially complete the planning and permitting and begin construction of phase II of the Devens facility, or Devens II, which will add a second production line. Upon reaching full production capacity, which we expect to occur in late 2009, Devens II is expected to increase our production capacity at the Devens facility to approximately 160 MW.

We intend to use at least half of the net proceeds from our recent public offering for the completion of Devens I and the planning, construction and equipping of Devens II. The net proceeds from that offering and cash on hand will not be sufficient to fully construct and equip Devens II. We expect to otherwise finance our construction of Devens II using cash provided by our operating activities and proceeds from debt financing.

In connection with our manufacturing expansion plans, we have entered into multi-year polysilicon supply agreements with DC Chemical Co., Ltd. (or DC Chemical), Wacker Chemie AG (or Wacker), Solaricos Trading, LTD (or Nitol) and Silicium de Provence S.A.S. (or Silpro). Including our second supply agreement that we signed with DC Chemical on January 30, 2008, we have silicon under contract to reach annual production levels of approximately 125 MW in 2009, 300 MW in 2010, 600 MW in 2011 and 850 MW in 2012, and we plan to expand our manufacturing operations accordingly.

Our quad ribbon furnaces will also be used by EverQ as it expands its own production capacity. On October 25, 2007, we and our two EverQ partners approved the construction of EverQ’s third manufacturing facility, EverQ 3, in Thalheim, Germany, which is expected to increase EverQ’s annual production capacity from approximately 100 MW to approximately 180 MW by the second half of 2009. EverQ will pay us a market-based royalty based on actual cost savings realized using our quad ribbon furnaces in EverQ 3 as compared to our dual ribbon furnaces, which are in use at EverQ’s two current facilities. We and our partners have also agreed to pursue an initial public offering, or IPO, of EverQ’s stock and expand EverQ’s annual production capacity to approximately 600 MW by 2012. Provided that EverQ becomes publicly traded prior to December 31, 2009, REC has offered EverQ an additional supply agreement for polysilicon to support this planned capacity expansion.

Our revenues today are primarily derived from the sale of solar panels, which are assemblies of PV cells that have been electrically interconnected and laminated in a physically durable and weather-tight package. We sell our products using distributors, systems integrators and other value-added resellers, who often add value through system design by incorporating our panels with electronics, structures and wiring systems. Applications for our products include on-grid generation, in which supplemental electricity is provided to an electric utility grid, and off-grid generation for markets where access to conventional electric power is not economical or physically feasible. Our products are currently sold primarily in Europe and the United States.

Accounting for EverQ

On December 19, 2006, we became equal partners in EverQ with Q-Cells and REC, with each sharing equally in its net income or loss. As a result of our reduction in ownership to one-third, we use the “equity method of accounting” for our share of EverQ results, rather than consolidating those results as we had in the past. Under the equity method of accounting, we report our one-third share of EverQ’s net income or loss as a single line item in our income statement.

We market and sell all solar panels manufactured by EverQ under the Evergreen Solar brand, as well as manage customer relationships and contracts. We receive fees from EverQ for these services and do not report gross revenue or cost of goods sold resulting from the sale of EverQ’s solar panel production. During 2007, we received a fee of 1.7% of gross EverQ revenue relating to the sales and marketing fee. In addition, we received royalty payments for our ongoing technology contributions to EverQ. Combined, the sales and marketing fee and royalty payments totaled approximately 6.0% of gross EverQ revenue..

4

While these revenue streams are based on current expansion and financial expectations of EverQ, as well as expected future technology developments, they are subject to periodic review and adjustment by the shareholders of EverQ and could vary widely from these estimates.

RECENT DEVELOPMENTS

Entry into New Polysilicon Supply Agreement with DC Chemical

On January 30, 2008, we entered into a multi-year polysilicon supply agreement with DC Chemical. The supply agreement provides the general terms and conditions pursuant to which DC Chemical will supply us with specified annual quantities of polysilicon at fixed prices beginning in 2009 and continuing through 2015. Within one month of the signing of the supply agreement, we are required to make an approximately $11.0 million nonrefundable prepayment to DC Chemical. Additional nonrefundable prepayments totaling approximately $25.5 million will be required at various times prior to the end of 2008. With this additional supply agreement, we have sufficient silicon under contract to reach annual production levels of approximately 125 MW in 2009, 300 MW in 2010, 600 MW in 2011 and 850 MW in 2012.

Director Resignation

On February 1, 2008, Dr. Gerald Wilson resigned from our Board of Directors. Dr. Wilson served as a director since July 2005, and at the time of his resignation served on our Nominating and Corporate Governance Committee and our Audit Committee.

Public Offering

On February 15, 2008, we closed a public offering of 18.4 million shares of our common stock, which included the exercise of an underwriters’ option to purchase 2.4 million additional shares. We received net proceeds of approximately $166.9 million (net of underwriting discounts). The shares of common stock were sold at a per share price of $9.50.

INDUSTRY BACKGROUND

Overview

With approximately $1 trillion in annual global revenues during 2006, the electric power industry is one of the world’s largest industries. Furthermore, electric power accounts for a growing share of overall energy use. While a majority of the world’s current electricity supply is generated from fossil fuels such as coal, oil and natural gas, these traditional energy sources face a number of challenges including rising prices, security concerns over dependence on imports from a limited number of countries, which have significant fossil fuel supplies and growing environmental concerns over the climate change risks associated with power generation using fossil fuels. As a result of these and other challenges facing traditional energy sources, governments, businesses and consumers are increasingly supporting the development of alternative energy sources, including solar energy.

The solar power market has grown significantly in the past decade. According to Solarbuzz, the global solar power market, as measured by annual solar power system installations, increased from 427 MW in 2002 to 1,744 MW in 2006, representing a CAGR 42.2%, while solar power industry revenues grew to approximately $10.6 billion in 2006. Despite the rapid growth, solar energy constitutes only a small fraction of the world’s energy output and therefore may have significant growth potential. Solarbuzz projects that annual solar power industry revenue could reach between $18.7 billion and $31.4 billion by 2011.

5

Key Growth Drivers and Advantages of Solar Power

Solar power generation has emerged as one of the most rapidly growing renewable sources of electricity. Solar power generation has several advantages over other forms of electricity generation that have driven and will continue to drive the growth of the solar power industry:

•  An Increase in Solar Power Generation Will Reduce Dependence on Fossil Fuels.  Worldwide demand for electricity is expected to nearly double from 14.3 billion MW hours in 2002 to 25.0 billion MW hours in 2025, according to the U.S. Department of Energy. Additionally, according to International Energy Agency 2006 estimates, over 60% of the world’s electricity is generated from fossil fuels such as coal, natural gas and oil. The combination of declining finite fossil fuel energy resources and increasing energy demand is depleting natural resources as well as driving up electricity costs, underscoring the need for reliable renewable energy production. Solar power systems are renewable energy sources that rely on the sun as an energy source and do not require a fossil fuel supply. As such, they are well positioned to offer a sustainable long-term alternative means of power generation.

•  Environmental Advantages.  Solar power is one of the cleanest electric generation sources, capable of generating electricity without air or water emissions, noise, vibration, habitat impact or waste generation. In particular, solar power does not generate greenhouse gases that contribute to global climate change or other air pollutants, as power generation based on fossil fuel combustion does, and does not generate radioactive or other wastes as nuclear power and coal combustion do. It is anticipated that greenhouse gas regulation in the United States and internationally will increase the costs and constrain the development of fossil fuel based electric generation and increase the attractiveness of solar power as a renewable electricity source.

•  Flexible Locations.  From tiny solar cells powering a hand-held calculator, to an array of rooftop panels powering an entire home, to acres of panels on a commercial building roof or field, solar power products can be deployed in many sizes and configurations and can be installed almost anywhere in the world. Solar power is among the best technologies for power generation in urban areas, environmentally sensitive areas and geographically remote areas in both developing and developed countries.

•  Government Incentives.  Germany, Italy, Japan, Spain and the United States presently account for the majority of world market demand for solar power systems. Government policies in these countries, in the form of both regulation and incentives, have accelerated the adoption of solar technologies by businesses and consumers. Typical government incentives include capital cost rebates, feed-in tariffs, tax credits and net metering. Internationally, Spain, Portugal, Greece, France, South Korea and Italy have recently developed new solar support programs. Other countries, including China, are increasingly adopting similar incentives. In the United States, the Energy Policy Act of 2005 enacted a 30% investment tax credit for solar energy manufacturers, and in January, 2006, California approved the largest solar program in the country’s history, the $3 billion 11-year California Solar Initiative which has a goal to create 3,000 MWs of solar energy by 2017.

As a result of solar power’s benefits and government support, the solar power market has seen sustained and rapid growth. PV panel shipments have increased over 20% per year on average for the past 20 years and over 40% per year for the past five years.

The Solar Power Industry Value Chain

Crystalline silicon-based technologies and thin-film technologies are the two primary technologies currently used in the solar power industry.

The crystalline silicon-based solar power manufacturing value chain starts with the processing of quartz sand to produce metallurgical-grade silicon. This material is further purified to semiconductor-grade or solargrade polysilicon feedstock. In the conventional crystalline silicon-based process, the silicon feedstock is then processed into ingots, which are sliced into solar wafers.

Wafers are manufactured into solar cells through a multiple step manufacturing process that entails etching, doping, coating and applying electrical contacts. Solar cells are then interconnected and packaged to

6

form solar panels, which together with system components such as batteries and inverters, are installed as solar power systems.

The conventional crystalline silicon-based wafer manufacturing process differs substantially from our proprietary String Ribbon technology. Our String Ribbon technology is a cost-effective process for manufacturing ribbons of crystalline silicon that are cut into wafers. These wafers are the primary components of PV cells which, in turn, are used to produce solar panels. With silicon consumption of less than five grams per watt, we believe we are the industry leader in efficient polysilicon consumption and use about half of the silicon used by conventional sawing wafer production processes. We believe that enhancements to our String Ribbon technology and our quad ribbon furnace design will enable us to reduce our silicon consumption to approximately two-and-a-half grams per watt by 2012.

In contrast to the crystalline silicon-based wafer manufacturing process, thin film technology involves depositing several thin layers of complex materials such as Copper Indium Gallium Diselenide, or CIGS, or Cadmium Telluride, or CdTe, on a substrate, such as glass, to make a solar cell. According to Solarbuzz, thin-film-based solar cells represented approximately 7% of solar cell production in 2006. There will continue to be significant efforts to develop alternate solar technologies, such as Amorphous Silicon, CIGS, CdTe, crystalline silicon on glass and polymer and nano technologies. Certain thin film technologies are gaining commercial acceptance and are important to broadening the demand for solar energy products for diverse energy generation applications.

Key Challenges for Solar Power

Although solar power can provide a cost-effective alternative for off-grid applications, we believe the principal challenge to widespread adoption of solar power for on-grid applications is reducing manufacturing costs so that the cost of installed solar panels is equal to or less than the cost of grid-generated electricity without impairing product reliability. This concept is known as reaching grid parity. We believe the following challenges of solar power technology must be overcome in order to reach grid parity:

•  Continued Reliance on Government Support and Incentives.  At present, most renewable energy sources would not be cost-competitive compared to traditional energy sources without government support. The PV industry relies on governmental incentives to encourage production and consumption, especially for on-grid systems. Changes in government policies could lead to a reduction in incentives and subsidies to the renewable energy sector, which could in turn seriously hinder the growth of the PV industry.

•  Shortage of Silicon Materials.  Efficient use of silicon is imperative for the growth of the industry due to the limited supply and increasing cost of silicon raw material expected at least for the near future. The reduction of raw materials waste, particularly the waste associated with sawing silicon by conventional crystalline silicon wafer production technology, known as kerf loss, is a key factor in lowering manufacturing costs.

•  Simplified and Continuous Processing.  Reduce reliance on expensive, multi-step manufacturing processes.

•  Reduced Manufacturing Capital Costs.  Decrease the costs and risks associated with new plant investments to lower capital costs per unit of production.

•  Improved Product Design and Performance.  Increase product conversion efficiency, longevity and ease of use. Conversion efficiency refers to the fraction of the sun’s energy converted to electricity.

We further believe the two principal solar power technologies, conventional crystalline silicon and thin films, are not adequately addressing these challenges:

•  Crystalline Silicon.  Crystalline silicon technology was the earliest practiced solar wafer fabrication technology and continues to be the dominant technology for the market, accounting for approximately 92% of solar market sales in 2006, according to Solarbuzz. Conventional crystalline silicon technology involves sawing thin wafers from solid crystalline silicon blocks. Crystalline silicon products are known

7

for their reliability, performance and longevity. However, factors such as high materials waste from sawing, complex processing procedures and high capital costs have limited the speed at which conventional crystalline silicon wafer manufacturers can reduce manufacturing costs.

•  Thin Films.  While most major solar power manufacturers currently rely on crystalline silicon technology for their solar cell production, these manufacturers, and other new entrants, are also developing alternative thin film technologies to achieve lower manufacturing costs. Thin film technology involves depositing several thin layers of complex materials such as CIGS or CdTe on a substrate, such as glass, to make a solar cell. Although thin film technologies generally use certain key materials more efficiently than conventional crystalline silicon manufacturing technology and are not affected by the current polysilicon supply shortage, such technologies have disadvantages such as lower conversion efficiency and, in some cases, reduced product performance and reliability.

OUR BUSINESS

Our Competitive Strengths

We believe we are well-positioned to be a leader in the solar power industry based on the following competitive strengths:

Proven Manufacturing Technology.  Our proprietary String Ribbon technology, combined with our integrated manufacturing process know-how enables us to produce wafers, cells and panels at competitive costs. We have been developing and enhancing our patented String Ribbon technology since 1994 and have achieved what we believe to be the lowest silicon consumption rates in the industry with our dual ribbon wafer furnace, which consumes less than five grams of silicon per watt or approximately 50% of the silicon used by conventional sawing wafer production processes. String Ribbon technology has been successfully demonstrated at EverQ, where there is approximately 100 MW of annual production capacity in place as of December 31, 2007. Our new quad ribbon furnace technology is expected to improve performance over our dual ribbon furnace with significantly increased automation. We believe that our facility in Marlboro, Massachusetts and EverQ, which has been shipping product since June 2006, clearly demonstrate that we can use our String Ribbon technology to reduce the cost of manufacturing solar panels through substantially reduced materials cost, simplified processing and increased scalability.

Established Relationships with Key Suppliers.  Polysilicon is currently in short supply and represents the most costly component in the production of solar cells. We currently have agreements in place for 100% of our anticipated silicon supply needs through 2012. In July 2007, we entered into an eight-year polysilicon supply agreement with Wacker with shipments beginning in 2010. In October 2007, we entered into a supply agreement with Nitol for specified annual quantities of polysilicon at fixed prices beginning in 2009 and continuing through 2014. In December 2007, we entered into a 10-year polysilicon supply agreement with Silpro with shipments beginning in 2010. In April 2007 and January 2008 we signed polysilicon supply agreements with DC Chemical for multi-year contracts through 2015. We may enter into additional long-term silicon supply contracts with leading international and domestic suppliers.

Attractive Take-or-Pay Sales Contracts.  Over the past 24 months, we have established long-term business relationships with leading distributors, installers, project developers and other resellers and have signed take-or-pay sales contracts for the sale of solar panels with six distribution partners, PowerLight Corporation (or PowerLight, recently acquired by SunPower Corporation), S.A.G. Solarstrom (or S.A.G.), Donauer Solartechnik (or Donauer), Mainstream Energy (or Mainstream), Sun Edison and Global Resource Options (or groSolar), with a total value of almost $1 billion for deliveries through 2011. Through December 31, 2007, approximately $170 million of sales under these contracts have been fulfilled. These contracts include fixed quantity and timing provisions. Our attractive take-or-pay sales contracts confirm the viability of our products and provide a predictable revenue stream. We will continue to pursue additional favorable contracts with other distributors, installers, project developers and other resellers.

Integrated Manufacturing Capacities.  Our operations currently include the production of wafers, cells and panels, which comprise a significant portion of the solar power value chain. Our String Ribbon technology

8

enables continuous growth of crystalline silicon ribbons that are cut into solar wafers eliminating the need for ingot formation, sectioning and wire sawing necessary in the conventional wafer manufacturing process. The elimination of the need for ingot formation, sectioning and wafer sawing provides us with significant advantages including increasing the speed of, and reducing costs related to, building new production facilities. We aim to leverage the advantages of our unique integrated business model to rapidly expand our manufacturing capacity at reduced costs.

Strong, Experienced Management Team.  Richard Feldt, our President and Chief Executive Officer, and our other executive team members, have guided us from an innovative research and development-focused company to an emerging manufacturing leader in the solar energy industry. Mr. Feldt previously served as Senior Vice President and General Manager of Worldwide Operations at Symbol Technologies where he streamlined the complex supply chain and significantly reduced cycle times and material costs. His 30-year track record in successfully growing global technology and manufacturing businesses is instrumental to our long-term development plan to expand manufacturing capacity. Our executive officers are dedicated to the continuous development of our technologies, including our proprietary quad ribbon wafer furnace design, to enhance our competitive advantage in the cost-efficient production of solar cells. With this talented group of experienced executives from various technology manufacturing and other relevant backgrounds, we expect to execute on our current business plan and drive continued and rapid growth.

OUR GROWTH STRATEGIES

Our fundamental business objective is to use our technologies to become a leader in developing, manufacturing and marketing solar panels throughout the world. We are implementing the following strategies to meet this objective:

Innovate to Lower Cost of Solar to Achieve Grid Parity Cost Structure.  The long-term challenge of solar energy is its higher cost compared to conventional sources of electricity such as fossil fuels. Solar-power product manufacturers who have the ability to manufacture products that can generate electricity at or close to grid parity will consequently have a distinct advantage, including the ability to sell into markets where government subsidies are minimal or non-existent. We expect our String Ribbon technology and other advancements in wafer, cell and panel technology will allow us to lower our manufacturing costs to approximately $1.50 per watt in factories opening in 2011, upon reaching full capacity. We also expect to continue to work with partners further down the value chain to reduce the installed cost of solar. For example, through our alliances with NSTAR, a Boston-based utility, and other utilities, combined with our relationships with PowerLight and Sun Edison, we expect to help reduce the marketing, distribution and installation costs so that electricity generated by our solar panels, as installed, costs the same as or less than electricity generated by conventional sources.

Maintain Our Technology Leadership in Wafer, Cell and Panel Manufacturing through Continuous Innovation.  We employ 77 research and development employees at an approximately 40,000 square foot facility in Marlboro, Massachusetts primarily dedicated to research and development initiatives. Our dual ribbon wafer technology affords us with a significant technology advantage over many of our competitors as it results in silicon consumption rates of less than five grams per watt, which is about 50% of the silicon used by conventional sawing wafer production processes. We are currently focused on further enhancing our String Ribbon technology through the implementation of our proprietary quad ribbon furnace design, which we believe will help us achieve increased manufacturing efficiencies and enable us to reduce our silicon consumption to approximately two-and-a-half grams per watt by 2012. We also have plans to improve cell conversion efficiencies and we are developing processes that will improve factory yields. Through various initiatives, we expect to achieve cell conversion efficiencies of approximately 18% and factory yields approaching 90% by 2012 while continuing to reduce our total manufacturing costs per watt.

Significantly Increase Our Wholly Owned Manufacturing Capacity.  Building upon some of our experience in scaling production using our String Ribbon technology at EverQ, we are currently implementing a plan to expand our own manufacturing capacity starting with the Devens facility, which is expected to increase our production capacity by approximately 160 MW. We expect to have annual production of approximately

9

125 MW in 2009, 300 MW in 2010, 600 MW in 2011 and 850 MW in 2012. We have agreements in place for 100% of our anticipated silicon supply needs through 2012.

OUR PRODUCTS

Solar panels are generally composed of the following:

•  Wafers.  A crystalline silicon wafer is a flat piece of crystalline silicon that can be processed and assembled into a solar cell. Our rectangular wafers measure 80 millimeters by 150 millimeters and are approximately 190 microns thick.

•  Cells.  A solar cell is a device made from a silicon wafer that converts sunlight into electricity by means of a process known as the PV effect. Each of our solar cells currently produces approximately 1.7 watts of power. As the conversion efficiency of the solar cell improves, the power of the cell improves as well.

•  Panels.  A solar panel is an assembly of solar cells that have been electrically interconnected and laminated in a durable and weather-tight package. The most common solar panels typically range from 160 to 200 watts per panel while some specialty panels are smaller or larger. Our solar panels currently produce up to approximately 195 watts of power.

One or more solar panels can be assembled in a solar system (or solar array) by physically mounting and electrically interconnecting the panels, often with batteries or power electronics, including inverters, to produce electricity. Typical residential on-grid systems produce 2,000 to 6,000 watts of power. Solar panels are our primary product, although we may in the future also sell wafers, cells or systems. We believe our panels are very competitive with other products in the marketplace. They are certified to international standards of safety, reliability and quality. If our development programs are successful, we expect to see continued increases in conversion efficiency and power output from our solar panels as we rapidly expand our manufacturing capacity.

Sales, Marketing and Distribution

We sell our solar panels using domestic and international distributors, system integrators, project developers and other resellers, who often add value through system design by incorporating our solar panels with inverters and other electronics, mounting structures and wiring systems. Most of our distribution partners have a geographic or applications focus. Our distribution partners include companies that are exclusively solar power system resellers as well as others for whom solar power is an extension of their core business, such as engineering design firms or other energy product marketers.

Going forward we expect to collaborate closely with a relatively small number of resellers throughout the world. As of December 31, 2007, we had approximately 10 main resellers worldwide and are actively working to refine our distribution partners by very careful addition of a select few new accounts and channel partners. We intend to selectively pursue additional strategic relationships with other companies worldwide for the joint marketing, distribution and manufacturing of our products. These resellers are expected to range from large, multinational corporations to small, development-stage companies, each chosen for their particular expertise. We believe that these relationships will enable us to leverage the marketing, manufacturing and distribution capabilities of other companies, explore opportunities for additional product development and more easily enter new geographic markets in a cost effective manner, attract new distribution partners and develop advanced solar power applications.

For the year ended December 31, 2007, sales to our five largest distribution partners accounted for approximately 74% of our total product revenues. In that period our largest distribution partner, PowerLight accounted for approximately 31% of our total product revenues. As we continue to expand manufacturing capacity and sales volumes, we anticipate developing relationships with additional distribution partners and decreasing our dependence on any single distribution partner. Additional information regarding the geographic distribution of our sources of revenue may be found in the notes to the financial statements.

10

In addition, we market our products through trade shows, on-going distribution partner communications, promotional material, our website, direct mail and advertising. Our staff provides customer service and applications engineering support to our distribution partners while also gathering information on current product performance and future product requirements.

MANUFACTURING

Our principal manufacturing objective is to provide for large-scale manufacturing of our solar power products at low cost, thereby enabling us to penetrate price-sensitive solar power markets. We are significantly increasing our manufacturing capacity with the development of a state-of-the-art facility in Devens, Massachusetts. We will manufacture and assemble solar panels in the Devens facility using our quad ribbon furnaces.

The construction of Devens I began in September 2007 and has progressed as scheduled. Foundations have been poured, structural steel members have been erected and the Devens facility was substantially enclosed before the full onset of the New England winter allowing us to continue construction through the winter. If we are able to continue construction at the current pace and our equipment suppliers meet their forecasted delivery deadlines, we believe we will begin manufacturing solar panels at Devens I in mid-2008.

By the second quarter of 2008 we expect to complete the planning and permitting and begin ordering equipment for Devens II. Certain shared elements of Devens I and Devens II have already been designed into and permitted for construction in Devens I. Production in Devens II is expected to commence in early 2009 and reach full capacity by late 2009.

Our current 96,000 square foot facility, at two adjacent sites in Marlboro, Massachusetts, includes approximately 56,000 square feet of manufacturing space, and an additional 40,000 square feet of space for research and development and engineering development. The Marlboro facility includes a complete line of equipment to manufacture String Ribbon wafers, fabricate and test solar cells, and laminate and test panels, with a total capacity of up to approximately 18 MW per year if operated at full capacity. Going forward, however, we expect the Marlboro facility to continue to both manufacture and to test, pilot, validate and benchmark new manufacturing equipment and processes and product designs, and, therefore, we expect actual production from our Marlboro facility to be approximately 15 MW or lower.

We expect that our Devens facility will also include equipment to manufacture string. We use a special form of string in our wafer manufacturing process that is not used by any other wafer manufacturer. We currently meet our string requirements using a single supplier, and as part of our strategy of securing adequate raw material supplies and reducing cost, we are developing our own ability to produce string. We are in the process of permitting this facility and expect to begin production later this year. Together with our current supplier, we will gradually grow our supply of string to meet the expansion plans for both us and EverQ.

In recent years, our EverQ partnership has substantially increased the volume of solar power products being manufactured using our String Ribbon technology. EverQ has increased productive capacity from about 30 MW in 2006 to approximately 100 MW as of December 31, 2007 and we expect its capacity to reach 180 MW by the second half of 2009 as a result of the addition of a third integrated wafer, cell and panel factory. We and our EverQ partners also recently announced plans to expand EverQ’s capacity to 600 MW by 2012.

Because the market opportunity for solar power encompasses numerous applications in both developed and developing nations worldwide, we expect a significant portion of our future sales will be made outside the United States. Over time, we also expect that our manufacturing will become increasingly global. We believe there are several advantages to manufacturing close to local markets, including reduced shipping costs, reduced currency exposure, enhanced brand recognition, avoidance of import tariffs and access to local private or public sector financing. See “Risk Factors — Risks Relating to Our Industry, Products, Financial Results and Operations — We face risks associated with the marketing, distribution and sale of our solar power products internationally, and if we are unable to effectively manage these risks, it could impair our ability to expand our business abroad.”

11

RESEARCH AND DEVELOPMENT

Continuously improving our technology is an important part of our overall strategy. Therefore, we have maintained and intend to maintain a strong research and development effort. Approximately 40,000 square feet of space is dedicated to research and development and advanced engineering and contains equipment to support the development, fabrication and evaluation of new solar power products and technologies.

INTELLECTUAL PROPERTY

Patents

We believe that our commercial success will significantly depend on our ability to protect our intellectual property rights underlying our proprietary technologies. We seek U.S. and international patent protection for major elements of our technology platform, including our manufacturing process and methods and apparatuses for producing crystalline silicon wafers, solar cells and solar panels. We currently have 22 U.S. patents, seven Indian patents, and six European patents that have been validated with enforceable rights in 10 foreign jurisdictions. These patents begin to expire in 2016 and will all expire by 2023. In addition, we have 20 U.S. patent applications pending and 26 foreign patent applications pending (including PCT applications) related to our business. We devote substantial resources to building a strong patent position and we intend to continue to file additional U.S. and foreign patent applications to seek protection for technology we deem important to our commercial success. Our patents cover the following areas:

•  Crystalline Silicon Wafers.  Our String Ribbon wafer fabrication technology, including methods for automated, high-yield production techniques, are covered by 10 U.S. patents, two Indian patents and four European patents that have been validated with enforceable rights in 10 foreign jurisdictions. In addition, for this technology, we also have 13 pending U.S. patent applications, two pending PCT applications, and 10 pending foreign patent applications.

•  Solar Cell Fabrication.  Our solar cell processing technology is covered by four U.S. patents. Among other things, these patents relate to methods for forming wrap-around contacts on solar cells and methods for processing solar cells. We also have two pending U.S. patent applications for these cell fabrication inventions.

•  Solar Panels.  For our advanced solar panel designs, we currently own eight U.S. patents, five Indian patents, and two European patents that have been validated with enforceable rights in 10 foreign jurisdictions. The U.S. patents primarily relate to solar cell panels with an improved backskin, solar cell panels with an interface mounting system, an encapsulant material for solar cell panels, and a solar cell roof tile system. In addition, for our Solar panel technology, we have pending five U.S. patent applications, two pending PCT applications, and 12 pending foreign patent applications.

Trademarks and Copyrights

We have one U.S. registered trademark we are currently using and three pending U.S. trademarks we presently intend to continue to pursue and several foreign trademark registrations associated with and used in our business, including registrations and applications for the trademarks Evergreen Solar, the Evergreen Solar logo and Think Beyond. Furthermore, we use a number of common law trademarks and service marks, including the trademark String Ribbon. We are working to increase, maintain and enforce our rights in our trademark portfolio, the protection of which is important to our reputation and branding. We also own copyrights relating to our products, services and business, including copyrights in the software we have developed, in our marketing materials and in our product manuals.

Trade Secrets and Other Confidential Information

With respect to, among other things, proprietary know-how that is not patentable and processes for which patents are difficult to enforce, we rely on trade secret protection and confidentiality agreements to protect our interests. We believe that several elements of our solar panels and manufacturing processes involve proprietary know-how, technology or data, which are not covered by patents or patent applications, including selected

12

materials, technical processes, equipment designs, algorithms and procedures. We have taken security measures to protect our proprietary know-how, technologies and confidential data, and we continue to explore additional methods of protection. While we require all employees, key consultants and other third parties to enter into confidentiality agreements with us, we cannot be assured that proprietary information will not be disclosed inappropriately, that others will not independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets, or that we can meaningfully protect our trade secrets. Any material leak of confidential or proprietary information into the public domain or to third parties could result in the loss of a competitive advantage in the solar power market.

COMPETITION

The solar power market is intensely competitive and rapidly evolving. According to Solarbuzz, there are over 100 companies which engaged in PV products manufacturing or have announced to do so. Our main competitors are, among others, BP Solar International Inc., First Solar, Inc., Kyocera Corporation, Mitsubishi, RWE Schott Solar, Inc., Sanyo Corporation, Sharp Corporation, Solar World AG, SunPower Corporation and SunTech Power Holdings Co., Ltd. We also expect that future competition will include new entrants to the solar power market offering new technological solutions. We may also face competition from semiconductor manufacturers, several of which have already announced their intention to start production of solar cells.

Many of our existing and potential competitors have substantially greater financial, manufacturing and other resources than we currently do. Our competitors’ greater size and, in some cases, longer operating histories provide them with a competitive advantage with respect to manufacturing costs because of their economies of scale and their ability to purchase raw materials at lower prices. For example, those of our competitors that also manufacture semiconductors may source both semiconductor grade silicon wafers and solar grade silicon wafers from the same supplier. As a result, such competitors may have stronger bargaining power with the supplier and have an advantage over us in pricing as well as securing silicon wafer supplies at times of shortages.

We believe that the cost and performance of our technology will continue to have advantages compared to competitive technologies. Our products offer the reliability, efficiency and market acceptance of other crystalline silicon products. We believe our technology provides lower manufacturing costs resulting from significantly better silicon consumption and fewer processing steps, particularly in wafer fabrication. Compared to thin film products, our products offer generally higher performance. Some thin film technologies, such as cadmium telluride, use toxic materials that inhibit their market acceptance, where others, such as copper indium diselenide, rely on raw materials in short supply, such as indium. Other technologies, including all of the polymer and nanomaterial technologies, are still being developed and have not yet reached the commercialization stage.

The entire solar industry also faces significant competition from other power generation sources, both conventional sources as well as other emerging technologies. Solar power has certain advantages and disadvantages when compared to other power generating technologies. The advantages include the ability to deploy products in many sizes and configurations, to install products almost anywhere in the world, to provide reliable power for many applications, to serve as both a power generator and the skin of a building and to eliminate air, water and noise emissions. Whereas solar generally is cost effective for off-grid applications, the high up-front cost of solar relative to most other solutions is the primary market barrier for on-grid applications. Furthermore, unlike most conventional power generators, which can produce power on demand, solar power cannot generate power where sunlight is not available, although it is often matched with battery storage to provide highly reliable on demand power solutions.

ENVIRONMENTAL, HEALTH AND SAFETY REGULATIONS

We use toxic, volatile or otherwise hazardous chemicals in our research and development and manufacturing activities and generate and discharge hazardous emissions, effluents and wastes from these operations. We are subject to a variety of foreign, federal, state and local governmental regulations related to the storage, use, discharge, emission and disposal of hazardous materials. We are also subject to occupational health and

13

safety regulations designed to protect worker health and safety from injuries and adverse health effects from exposure to hazardous chemicals and working conditions.

We believe that we have all environmental permits necessary to conduct our business. We believe that we have properly handled our hazardous materials and wastes and have not materially contributed to any contamination at any of our past or current premises, although historical contamination may be present at these locations from prior uses. We are not aware of any environmental, health or safety investigation, proceeding or action by foreign, federal or state agencies involving our past or current facilities. If we fail to comply with present or future environmental, health or safety regulations, we could be subject to fines, suspension of production or a cessation of operations. Any failure by us to control the use of, prevent public or employee exposure to, or to restrict adequately the emission and discharge of hazardous substances in accordance with applicable environmental laws and regulations could subject us to substantial financial liabilities, operational interruptions and adverse publicity, any of which could materially and adversely affect our business, results of operations and financial condition. In addition, under some foreign, federal and state statutes and regulations, a governmental agency or private party may seek recovery of response costs or damages from operators of property where releases of hazardous substances have occurred or are ongoing, even if the operator was not responsible for the release or otherwise was not at fault.

EMPLOYEES

As of December 31, 2007, we had approximately 400 full-time employees, including approximately 77 engaged in research and development and approximately 276 engaged in manufacturing. Approximately 47 of our employees have advanced degrees, including 19 with Ph.D.s. None of our employees are represented by any labor union nor are they organized under a collective bargaining agreement. We have never experienced a work stoppage and believe that our relations with our employees are good. Devens I and Devens II are expected to increase our number of full-time employees by approximately 410 and 350 respectively.

AVAILABLE INFORMATION

Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports are made available free of charge though our internet website (http://www.evergreensolar.com) as soon as practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission. Except as otherwise stated in these documents, the information contained on our website or available by hyperlink from our website is not incorporated by reference into this report or any other documents we file with or furnish to the SEC.

ITEM 1A.   RISK FACTORS.

Certain Factors Which May Affect Future Results

The factors discussed below are cautionary statements that identify important factors that could cause actual results to differ materially from those anticipated by the forward-looking statements contained in this report. For more information regarding the forward-looking statements contained in this report, see “Concerns Regarding Forward-Looking Statements” at the beginning of this report. You should carefully consider the risks and uncertainties described below, together with all of the other information included in this report, in considering our business and prospects. The risks and uncertainties described below are not the only ones that we face. Additional risks and uncertainties not presently known to us or that we currently deem to be immaterial also may materially impair our business operations. The occurrence of any of the following risks could adversely affect our business, financial condition or results of operations.

14

Risks Relating to Our Industry, Products, Financial Results and Operations

Evaluating our business and future prospects may be difficult due to the rapidly changing market landscape.

There is limited historical information available about our company upon which you can base your evaluation of our business and prospects. Although we were formed in 1994 to research and develop crystalline silicon technology for use in manufacturing solar power products and began shipping product in 1997, we first shipped commercial products from our Marlboro manufacturing facility in September 2001. Relative to the entire solar industry, we have shipped only a limited number of solar power panels manufactured in our Marlboro facility and have recognized limited revenues generated by products produced at this facility.

The solar power market is rapidly evolving and is experiencing technological advances and new market entrants. Our future success will require us to scale our manufacturing capacity significantly beyond the capacity of our existing Marlboro facility and the planned Devens expansions, and our business model, technologies and processes are unproven at significant scale. Moreover, EverQ is only in the early stages of expansion, and we have limited experience upon which to predict whether it will continue to be successful. As a result, you should consider our business and prospects in light of the risks, expenses and challenges that we will face as an early-stage company seeking to develop and manufacture new products in a growing and rapidly evolving market.

We have a history of losses, expect to incur substantial further losses and may not achieve or maintain profitability in the future, which in turn could materially decrease the value of our common stock.

Since our inception, we have incurred significant net losses, including a net loss of $16.6 million for the year ended December 31, 2007. Principally as a result of ongoing operating losses, we had an accumulated deficit of $136.3 million as of December 31, 2007. We expect to incur substantial losses until Devens I approaches full capacity, and if we do not achieve our expected production targets we may never become profitable. Even if we do achieve profitability, we may be unable to sustain or increase our profitability in the future, which in turn could materially decrease the market value of our common stock. We expect to continue to make significant capital expenditures and anticipate that our expenses will increase as we seek to:

•  expand our manufacturing operations, whether domestically or internationally;

•  develop our distribution network;

•  continue to research and develop our products and manufacturing technologies;

•  implement internal systems and infrastructure to support our growth; and

•  hire additional personnel.

We do not know whether our revenues will grow at all or grow rapidly enough to absorb these costs, and our limited operating history makes it difficult to assess the extent of these expenses or their impact on our operating results.

We will need to raise significant additional capital in order to continue to grow our business and fund our operations which subjects us to the risk that we may be unable to grow our business and fund our operations as planned.

We will need to generate cash internally or raise significant additional capital to fund our planned expansion of manufacturing facilities beyond the Devens facility, to acquire complementary businesses, to secure silicon beyond our existing contracts and obtain other raw materials and/or necessary technologies. In addition, the net proceeds from our February 2008 public offering of common stock and cash on hand will not be sufficient to fully construct and equip Devens II and, therefore, we will need to secure additional financing to do so. Furthermore, we, along with REC and Q-Cells, have guaranteed a long-term loan entered into by EverQ. A default by EverQ on this loan could materially impact the availability of our existing funds, and

15

require us to secure additional capital. If adequate capital is not available or is not available on acceptable terms, our ability to fund our operations, further develop and expand our manufacturing operations and distribution network, or otherwise respond to competitive pressures would be significantly limited. In such a case, the stock price of our common stock would likely be materially and adversely impacted.

If we raise a significant amount of capital through the debt markets, we may become subject to the additional risks and uncertainties that are faced by highly leveraged companies. For example, substantial indebtedness could have significant effects on our business, such as, among other things, requiring us to use a substantial portion of our cash flow from operations to service our indebtedness (thereby reducing available cash flow to fund working capital, capital expenditures, development projects and other general corporate purpose) and placing us at a competitive disadvantage compared to our competitors that have less debt.

Our future success depends on our ability to increase our manufacturing capacity through the development of additional manufacturing facilities, including the Devens facility. If we are unable to achieve our capacity expansion goals, which would limit our growth potential and impair our operating results and financial condition.

Our future success depends on our ability to increase our manufacturing capacity mainly with additional manufacturing facilities, including the Devens facility. Our ability to complete the construction and ramp-up of Devens I and Devens II is contingent on our ability to obtain and satisfy all the requirements imposed by certain permits needed to begin operations. Our failure to obtain or satisfy the requirements of these permits could delay construction of Devens I or Devens II. The net proceeds from our February 2008 public offering of common stock will not be sufficient to fully construct and equip Devens II and, therefore, we will need to secure additional financing to do so. There can be no assurance that we will be successful in establishing additional facilities or, once established, that we will attain the expected manufacturing capacity or financial results.

Our ability to complete the planning, construction and equipping of Devens I and Devens II and additional manufacturing facilities is subject to significant risk and uncertainty, including:

•  we will need to raise significant additional capital in order to finance the costs of constructing and equipping of Devens II and any additional facilities, which we may be unable to do so on reasonable terms or at all, and which could be dilutive to our existing stockholders;

•  the build-out of any facilities will be subject to the risks inherent in the development of a new manufacturing facility, including risks of delays and cost overruns as a result of a number of factors, many of which may be out of our control, such as delays in government approvals, burdensome permit conditions and delays in the delivery of manufacturing equipment from numerous suppliers;

•  we may be required to depend on third parties or strategic partnerships that we establish in the development and operation of additional production capacity, which may subject us to risks that such third parties do not fulfill their obligations to us under our arrangements with them; and

If we are unable to develop and successfully operate additional manufacturing facilities, or if we encounter any of the risks described above, we may be unable to scale our business to the extent necessary to improve results of operations and achieve profitability. Moreover, there can be no assurance that if we do expand our manufacturing capacity that we will be able to generate customer demand for our solar power products at these production levels or that we will increase our revenues or achieve profitability.

We may be unable to effectively manage the expansion of our operations, and the master joint venture agreement that governs our relationship with the other EverQ joint venture participants may impair our ability to expand our manufacturing outside of the United States.

We expect to expand our business significantly in order to satisfy demand for our solar power products and increase our market share. To manage the expansion of our operations, we will be required to improve our operational and financial systems, procedures and controls and expand, train and manage our growing employee base. Our management will also be required to maintain and expand our relationships with

16

distribution partners, suppliers and other third parties and attract new distribution partners and suppliers. In addition, our current and planned operations, personnel, systems and internal procedures and controls might be inadequate to support our future growth. If we cannot manage our growth effectively, we may be unable to take advantage of market opportunities, execute our business strategies or respond to competitive pressures, and our business and results of operations could be harmed.

Furthermore, under the master joint venture agreement that governs the joint venture parties’ relationship with respect to EverQ, we have agreed to give to each of Q-Cells and REC, respectively, a right of first refusal to participate in specified future joint ventures that we may decide to undertake for development of manufacturing facilities outside the United States. This limitation could have the effect of frustrating attempts we may make to expand our manufacturing outside of the United States.

The actual costs to complete Devens I and plan, construct and equip Devens II may be higher than expected, and we may not have sufficient funds to pay the increased costs.

We intend to use at least half of the net proceeds received from our public offering which closed on February 15, 2008, for the completion of Devens I and the planning, construction and equipping of Devens II. The scheduled completion dates for Devens I and Devens II and the budgeted costs necessary to complete construction assume that there are no material unforeseen or unexpected difficulties or delays. Among other things, a delay in the completion of the plans and specifications for Devens II and a delay in the commencement of construction on Devens II beyond the scheduled commencement date may increase our overall cost for the construction.

The net proceeds from the public offering which closed on February 15, 2008, and cash on hand will not be sufficient to fully construct and equip Devens II and, therefore, we will need to secure additional financing in the future to do so. We may be unable to secure additional financing on reasonable terms or at all, which may force us to modify the scope and schedule of construction. Our inability to pay development costs as they are incurred would negatively affect our ability to complete Devens II on time or within budget and thus could have a material adverse effect on our financial condition and results of operations.

There are significant risks associated with the completion of Devens which may cause budget overruns or delays in completion of the projects.

Construction, equipment or staffing problems or difficulties in obtaining all of the requisite licenses, permits or authorizations from regulatory authorities could delay or prevent the construction or opening or otherwise affect the design and features of Devens. Certain permits, licenses and other approvals necessary for the development, construction and operation of Devens have not yet been obtained. Delays in obtaining these approvals or other unexpected changes or concessions required by local, state or federal regulatory authorities could involve additional costs and result in a delay in the scheduled opening of Devens. Failure to complete Devens within budget or on schedule may have a significant negative effect on our financial condition and results of operations.

If we need more silicon than we have estimated or if our suppliers fail to satisfy their obligations under our silicon supply contracts, the current industry-wide shortage of polysilicon could adversely impact our revenue growth and decrease our gross margins and profitability.

Polysilicon is an essential raw material in our production of PV cells. There is currently an industry-wide shortage of polysilicon and a limited number of polysilicon suppliers, which has resulted in significant price increases and pre-payment requirements under polysilicon agreements. Although we have contracted with vendors for polysilicon supply sufficient for our stated expansion plans, our estimates regarding our supply needs may not be correct and our suppliers may not satisfy their obligations under these contracts. In addition, with respect to our recently announced supply agreements with DC Chemical, Nitol and Silpro, such suppliers must construct new facilities that will be used to manufacture the polysilicon to be delivered to us. The construction of these facilities is a substantial undertaking, requiring several years to complete and subject to numerous risks and uncertainties relating to new construction. Each of DC Chemical, Silpro and Nitol have

17

limited experience in developing polysilicon manufacturing facilities. We have also made significant prepayments with our polysilicon suppliers. In many instances these payments are not refundable or will be difficult to recover if a supplier defaults on its obligations. If DC Chemical, Wacker, Nitol, Silpro or any of our other polysilicon suppliers are unable or unwilling to supply us with polysilicon in accordance with the applicable supply agreements, our ability to meet existing and future customer demand for our products would be impaired. In turn, this could cause us to make fewer shipments, lose distribution partners and market share and generate lower than anticipated revenue, thereby seriously harming our financial condition and results of operations.

Two of our multi-year polysilicon supply agreements entered into in 2007 are denominated in Euros. Unfavorable changes in foreign currency exchange rates could adversely affect the cost to manufacture our products, which could result in lost profits, a reduction of orders and loss of market share.

During 2007, we entered into two multi-year polysilicon supply agreements that were denominated in Euros. While we endeavor to denominate the purchase price of our materials in United State dollars, we are not always successful in doing so. To the extent that such purchases are made in foreign currency, we will be exposed to currency gains or losses. Unfavorable changes in these foreign currency exchange rates could significantly increase the cost of our products, adversely impacting our future financial condition and results of operations.

Our dependence on a limited number of suppliers for raw materials, key components for our solar power products and equipment could adversely affect our ability to manufacture and timely deliver our products, which could result in order cancellations and loss of market share.

We manufacture all of our solar power products using materials and components procured from a limited number of suppliers, which makes us susceptible to quality issues, shortages and price changes. If we fail to develop, maintain, and in many cases, expand our relationships with these or our other suppliers, we may be unable to manufacture our products or our products may be available only at a higher cost or after a long delay, which could prevent us from delivering our products to our distribution partners within required time frames, which in turn could lead to order cancellations and loss of market share. To the extent the processes that our suppliers use to manufacture materials and components are proprietary, we may be unable to obtain comparable materials and components from alternative suppliers. The failure of a supplier to supply materials and components in a timely manner, or to supply materials and components that meet our quality, quantity and cost requirements could impair our ability to manufacture our products or increase the costs of our products, particularly if we are unable to obtain substitute sources of these materials and components on a timely basis or on terms acceptable to us. Certain of the capital equipment used in the manufacture of our solar power products has been developed and made specifically for us, is not readily available from multiple vendors and would be difficult to repair or replace if it were to become damaged or stop working. Consequently, any damage to or breakdown of our manufacturing equipment at a time when we are manufacturing commercial quantities of our products may have a material adverse impact on our business. For example, a supplier’s failure to supply this equipment in a timely manner, with adequate quality and on terms acceptable to us, could delay our manufacturing capacity expansion and otherwise disrupt our production schedule or increase our costs of production.

If the EverQ IPO is completed, our interest in EverQ will be diluted, our future revenue from EverQ may be adversely affected and our shares may be exposed to increased volatility.

Our interest in EverQ will be diluted if the EverQ IPO occurs, which may adversely affect our corporate governance influence over EverQ’s business and decision making. In addition, in preparation for and in connection with the IPO, we have entered into a binding memorandum of understanding with EverQ regarding their rights to our intellectual property and may need to modify our other material agreements with EverQ, or enter into additional agreements, such as additional license and technology transfer agreements and transition agreements, with EverQ. Such modifications, adjustments or renegotiations of the terms and conditions of

18

these agreements may adversely affect future revenues we receive from EverQ, including, without limitation, royalties and fees under the license and technology transfer agreement and the sales representative agreement.

We also can give no assurance regarding whether the IPO can be successfully completed and, if completed, we can give no assurance regarding the level of the initial offering price or the market performance of EverQ shares after the IPO. Our shares may experience additional volatility following an EverQ IPO as a result of changes in the price of EverQ shares.

We continue to invest significantly in research and development, and these efforts may not result in improved products or manufacturing processes.

We have historically invested heavily in research and development related to new product development and improving our manufacturing processes, and expect to continue to invest heavily in research and development in the future. If we fail to develop successfully our new solar power products or technologies, we will likely be unable to recover the costs we have incurred to develop these products and technologies and may be unable to increase our revenues and to become profitable. Some of our new product and manufacturing technologies are unproven at commercial scale and represent a departure from conventional solar power technologies, and it is difficult to predict whether we will be successful in completing their development. In addition, we invest significantly in developing new manufacturing processes designed to reduce our total costs of production. Our new manufacturing technologies, including our quad ribbon wafer furnace design, have been tested only in our Marlboro facility and, in most cases, only limited pre-production prototypes of our new products have been field-tested and/or sold in limited quantities. If our development efforts regarding new manufacturing technologies are not successful, and we are unable to increase the efficiency and decrease the costs of our manufacturing process, we may not be able to reduce the price of our products, which might prevent our products from gaining wide acceptance, and our gross margins may be negatively impacted.

Our solar power products may not gain market acceptance, which would prevent us from achieving increased revenues and market share.

The development of a successful market for our solar power products may be adversely affected by a number of factors, many of which are beyond our control, including:

•  our failure to produce solar power products that compete favorably against other solar power products on the basis of cost, quality and performance;

•  our failure to produce solar power products that compete favorably against conventional energy sources and alternative distributed generation technologies, such as wind and biomass, on the basis of cost, quality and performance;

•  whether or not customers will accept our new panel designs under development; and

•  our failure to develop and maintain successful relationships with distributors, systems integrators, project developers and other resellers, as well as strategic partners.

If our solar power products fail to gain market acceptance, we would be unable to increase our revenues and market share and to achieve and sustain profitability.

Technological changes in the solar power industry could render our solar power products uncompetitive or obsolete, which could reduce our market share and cause our revenues to decline.

The solar power market is characterized by continually changing technology requiring improved features, such as increased efficiency, higher power output and lower price. Our failure to further refine our technology and develop and introduce new solar power products could cause our products to become uncompetitive or obsolete, which could reduce our market share and cause our revenues to decline. The solar power industry is rapidly evolving and competitive. We will need to invest significant financial resources in research and development to keep pace with technological advances in the solar power industry and to effectively compete in the future. A variety of competing solar power technologies are under development by other companies that could result in lower manufacturing costs or higher product performance than those expected for our solar

19

power products. Our development efforts may be rendered obsolete by the technological advances of others, and other technologies may prove more advantageous for the commercialization of solar power products.

Our ability to increase market share and revenues depends on our ability to successfully maintain our existing distribution relationships and expand our distribution channels.

We currently sell our solar power products primarily to domestic and international distributors, system integrators, project developers and other resellers, which typically resell our products to end users on a global basis. During our year ended December 31, 2007, we sold our solar power products to approximately 38 distributors, system integrators, project developers and other resellers. Substantially all of our products were sold to just 10 of these distribution partners. If we are unable to refine successfully our existing distribution relationships and expand our distribution channels, our revenues and future prospects will be materially harmed. As we seek to grow our revenues by entering new markets in which we have little experience selling our products, our ability to increase market share and revenues will depend substantially on our ability to expand our distribution channels by identifying, developing and maintaining relationships with resellers. We may be unable to enter into relationships with resellers in the markets we target or on terms and conditions favorable to us, which could prevent us from entering these markets or entering these markets in accordance with our plans. Our ability to enter into and maintain relationships with resellers will be influenced by the relationships between these resellers and our competitors, market acceptance of our products and our low brand recognition as a new entrant.

We face risks associated with the marketing, distribution and sale of our solar power products internationally, and if we are unable to effectively manage these risks, it could impair our ability to expand our business abroad.

Our product revenues outside of the United States, which excludes sales by EverQ for the year ended December 31, 2007, constituted approximately 18% and 63% of our total product revenues for the year ended December 31, 2007 and 2006, respectively. We expect that in the near future our revenues both from resellers and distributors outside of the United States and through our resellers and distributors to end users outside of the United States, will represent a majority of our total product revenues, particularly as we increase our production capacity. Significant management attention and financial resources will be required to develop successfully our international sales channels. In addition, the marketing, distribution and sale of our solar power products outside the United States expose us to a number of markets in which we have limited experience. If we are unable to manage effectively these risks, it could impair our ability to grow our business abroad. These risks include:

•  difficult and expensive compliance with the commercial and legal requirements of international markets, with which we have only limited experience;

•  difficulty in interpreting and enforcing contracts governed by foreign law, which may be subject to multiple, conflicting and changing laws, regulations and tax systems;

•  inability to obtain, maintain or enforce intellectual property rights;

•  encountering trade barriers such as export requirements, tariffs, taxes and other restrictions and expenses, which could affect the competitive pricing of our solar power products and reduce our market share in some countries;

•  unavailability of government grants from German or other foreign sources, or for government grants that have been approved, risk of forfeiture or repayment in whole or in part:

•  fluctuations in currency exchange rates relative to the U.S. dollar;

•  limitations on dividends or restrictions against repatriation of earnings;

•  difficulty in recruiting and retaining individuals skilled in international business operations;

•  increased costs associated with maintaining international marketing efforts; and

20

•  inability to develop, manufacture, market and sell our products and services in Germany and other international markets due to, for example, third-party intellectual property rights.

Our strategy may include establishing local manufacturing facilities in international markets. As we implement our strategy, we may encounter legal restrictions and liability, encounter commercial restrictions and incur taxes and other expenses to establish our manufacturing facilities in certain countries. In addition, we may potentially forfeit, voluntarily or involuntarily, foreign assets due to economic or political instability in the countries in which we choose to locate our manufacturing facilities. Furthermore, under the master joint venture agreement that governs the joint venture parties’ relationship with respect to EverQ, we have agreed to give to each of Q-Cells and REC, respectively, a right of first refusal to participate in specified future joint ventures that we may decide to undertake for development of manufacturing facilities outside the United States. This limitation could have the effect of frustrating attempts we may make to expand our manufacturing outside of the United States.

Our dependence on a small number of distribution partners may cause significant fluctuations or declines in our product revenues.

As of December 31, 2007, approximately 31%, 14% and 12% of our product revenues were generated from sales to PowerLight, Sun Edison and groSolar. These companies are in various stages of development and the loss of sales to any of them or the decline of any of their businesses could materially adversely affect our business, financial condition and results of operation. We anticipate that sales of our solar power products to a limited number of distribution partners will continue to account for a significant portion of our total product revenues for the foreseeable future. Consequently, any one of the following events may cause material fluctuations or declines in our product revenues and negatively impact our operating results:

•  reduction, delay or cancellation of orders from one or more of our significant distribution partners;

•  selection by one or more of our significant distribution partners of products competitive with ours;

•  loss of one or more of our significant distribution partners and our failure to recruit additional or replacement distribution partners; and

•  failure of any of our significant distribution partners to make timely payment of our invoices.

Problems with product quality or product performance may cause us to incur warranty expenses and may damage our market reputation and prevent us from achieving increased sales and market share.

Consistent with standard practice in the solar industry, the duration of our product warranties is lengthy. Our current standard product warranty includes a five-year warranty period for defects in material and workmanship and a 25-year warranty period for declines in power performance beyond specified levels. We believe our warranty periods are consistent with industry practice. Due to the long warranty period, we bear the risk of extensive warranty claims long after we have shipped product and recognized revenues. Although we have sold solar panels since 1997, the substantial majority of them have been operating for less than two years. The possibility of future product failures could cause us to incur substantial expenses to repair or replace defective products. Furthermore, widespread product failures may damage our market reputation and reduce our market share and cause sales to decline.

Our success in the future may depend on our ability to establish and maintain strategic alliances, and any failure on our part to establish and maintain such relationships could adversely affect our market penetration and revenue growth.

Our ability to establish strategic relationships will depend on a number of factors, many of which are outside our control, such as the competitive position of our technology and our products relative to our competitors. Furthermore, under the master joint venture agreement that governs the joint venture parties’ relationship with respect to EverQ, we have agreed to give to each of Q-Cells and REC, respectively, a right of first refusal to participate in specified future joint ventures that we may decide to undertake for development of manufacturing facilities outside the United States. This limitation could have the effect of frustrating

21

attempts we make to establish strategic relationships with third parties. We can provide no assurance that we will be able to establish new strategic relationships in the future.

In addition, strategic alliances that we may establish, will subject us to a number of risks, including risks associated with sharing proprietary information, loss of control of operations that are material to our business and profit-sharing arrangements. Moreover, strategic alliances may be expensive to implement, require us to issue additional shares of our common stock and subject us to the risk that the third party will not perform its obligations under the relationship, which may subject us to losses over which we have no control or expensive termination arrangements. As a result, even if our strategic alliances with third parties are successful, our business may be adversely affected by a number of factors that are outside of our control.

The success of our business depends on the continuing contributions of our key personnel and our ability to attract and retain new qualified employees in a competitive labor market.

We have attracted a highly skilled management team and specialized workforce, including scientists, engineers, researchers and manufacturing and marketing professionals. If we were to lose the services of any of our executive officers and key employees, our business could be materially and adversely impacted. We do not carry key person life insurance on any of our senior management or other key personnel.

We had approximately 400 employees as of December 31, 2007, and we anticipate that we will need to hire approximately 410 employees and 350 employees, respectively, in connection with Devens I and Devens II. Competition for personnel is intense, and qualified technical personnel are likely to remain a limited resource for the foreseeable future. Locating candidates with the appropriate qualifications, particularly in the desired geographic location, can be costly and difficult. We may not be able to hire the necessary personnel to implement our business strategy given our anticipated hiring needs, or we may need to provide higher compensation or more training to our personnel than we currently anticipate. Moreover, any officer or employee can terminate his or her relationship with us at any time.

Because we utilize highly flammable materials in our manufacturing processes, we are subject to the risk of losses arising from explosions and fires, which could materially adversely affect our financial condition and results of operations.

We utilize highly flammable materials such as silane and methane in our manufacturing processes. By utilizing these materials, we are subject to the risk of losses arising from explosions and fires. Our inability to fill customer orders during an extended business interruption could materially adversely impact existing distribution partner relationships resulting in market share decreases and reduced revenues.

The reduction or elimination of government subsidies and economic incentives for solar technology could cause our revenues to decline.

We believe that the growth of the majority of our target markets, depends on the availability and size of government subsidies and economic incentives for solar technology. Today, the cost of solar power substantially exceeds the cost of power furnished by the electric utility grid. As a result, federal, state and local governmental bodies in many countries, most notably the United States, Japan and Germany, have provided subsidies in the form of cost reductions, tax incentives and other incentives to end users, distributors, systems integrators, other resellers and manufacturers of solar power products to promote the use of solar energy and to reduce dependency on other forms of energy. In the future, these government subsidies and economic incentives could be reduced or eliminated altogether. For example, German subsidies decline at a rate of 5.0% to 6.5% per year (based on the type and size of the PV system) and the German Federal Ministry for the Environment recently announced a gradual increase of two percentage points from 2010 through 2011 and three percentage points in 2012 in the rate at which German subsidies decline. In addition, the Emerging Renewables Program in California has finite funds that may not last through the current program period. California subsidies have declined in the past and will continue to decline as cumulative installations exceed stated thresholds. Net metering policies in California, which currently only require each investor owned utility to provide net metering up to 2.5% of its aggregate customer peak demand, could also limit the amount of

22

solar power installed within California. Further, the 30% investment tax credit for solar energy manufacturers provided in the Energy Policy Act of 2005 is set to expire after 2008 if not extended by the United States federal government. The reduction or elimination of government subsidies and economic incentives would likely reduce the size of these markets and/or result in increased price competition, which could cause our revenues to decline.

If solar power technology is not suitable for widespread adoption or sufficient demand for solar power products does not develop or takes longer to develop than we anticipate, our revenues would not significantly increase and we would be unable to achieve or sustain profitability.

The market for solar power products is emerging and rapidly evolving, and its future success is uncertain. If solar power technology proves unsuitable for widespread commercial deployment or if demand for solar power products fails to develop sufficiently, we would be unable to generate enough revenues to achieve and sustain profitability. In addition, demand for solar power products in the markets and geographic regions we target may not develop or may develop more slowly than we anticipate. Many factors will influence the widespread adoption of solar power technology and demand for solar power products, including:

•  cost-effectiveness of solar power technologies as compared with conventional and non-solar alternative energy technologies;

•  performance and reliability of solar power products as compared with conventional and non-solar alternative energy products;

•  success of alternative distributed generation technologies such as fuel cells, wind power and micro turbines;

•  fluctuations in economic and market conditions that impact the viability of conventional and non-solar alternative energy sources, such as increases or decreases in the prices of oil and other fossil fuels;

•  capital expenditures by customers that tend to decrease when the United States or global economy slows;

•  continued deregulation of the electric power industry and broader energy industry; and

•  availability of government subsidies and incentives.

We face intense competition from other companies producing solar power and other energy generation products. If we fail to compete effectively, we may be unable to increase our market share and revenues.

The solar power market is intensely competitive and rapidly evolving. According to Solarbuzz, there are over 100 companies that are engaged in manufacturing PV products or have announced an intention to do so. Many of our competitors have established a market position more prominent than ours, and if we fail to attract and retain distribution partners and establish a successful distribution network for our solar power products, we may be unable to increase our sales and market share. There are a large number of companies in the world that produce solar power products, including BP Solar International Inc., First Solar, Inc., Kyocera Corporation, Mitsubishi, RWE Schott Solar, Inc., Sanyo Corporation, Sharp Corporation, Solar World AG, SunPower Corporation and SunTech Power Holdings Co., Ltd. We also expect that future competition will include new entrants to the solar power market offering new technological solutions. In the future, as EverQ becomes an independent company, it may also compete directly with us. In addition, we may face competition from semiconductor manufacturers, several of which have already announced their intention to start production of solar cells. Further, many of our competitors are developing and are currently producing products based on new solar power technologies, including other crystalline silicon ribbon and sheet technologies, that they believe will ultimately have costs similar to, or lower than, our projected costs. Many of our existing and potential competitors have substantially greater financial, technical, manufacturing and other resources than we currently do. Our competitors’ greater size and, in some cases, longer operating histories provide them with a competitive advantage with respect to manufacturing costs because of their economies of scale and their ability to purchase raw materials at lower prices. For example, those of our competitors that also manufacture

23

semiconductors may source both semiconductor grade polysilicon and solar grade polysilicon from the same supplier. As a result, such competitors may have stronger bargaining power with such supplier and have an advantage over us in pricing as well as securing polysilicon at times of shortages. Many also have greater name recognition, more established distribution networks and larger installed bases of customers. In addition, many of our competitors have well-established relationships with our current and potential resellers and their customers and have extensive knowledge of our target markets. As a result, our competitors may be able to devote greater resources to the research, development, promotion and sale of their products and respond more quickly to evolving industry standards and changing customer requirements than we can.

If we are unable to protect our intellectual property adequately, we could lose our competitive advantage in the solar power market.

Our ability to compete effectively against competing solar power technologies will depend, in part, on our ability to protect our current and future proprietary technology, product designs and manufacturing processes by obtaining, maintaining, and enforcing our intellectual property rights through a combination of patents, copyrights, trademarks, and trade secrets and also through unfair competition laws. We may not be able to obtain, maintain or enforce adequately our intellectual property and may need to defend our products against infringement or misappropriation claims, either of which could result in the loss of our competitive advantage in the solar power market and materially harm our business and profitability. We face the following risks in protecting our intellectual property and in developing, manufacturing, marketing and selling our products:

•  we cannot be certain that our pending United States and foreign patent applications will result in issued patents or that the claims in our issued patents are or will be sufficiently broad to prevent others form developing or using technology similar to ours or in developing, using, manufacturing, marketing or selling products similar to ours;

•  given the costs of obtaining patent protection, we may choose not to file patent applications for or not to maintain issued patents for certain innovations that later turn out to be important, or we may choose not to obtain foreign patent protection at all or to obtain patent protection in only some of the foreign countries, which later turn out to be important markets for us;

•  although we have a number of foreign patents and applications, the laws of some foreign jurisdictions do not protect intellectual property rights to the same extent as laws in the United States, and we may encounter difficulties in protecting and defending our rights in such foreign jurisdictions;

•  third parties may design around our patented technologies, and there is no assurance that our patents and other intellectual property rights will be sufficient to deter infringement or misappropriation of our intellectual property rights by others;

•  third parties may seek to challenge or invalidate our patents, which can result in a narrowing of or invalidating our patents, or rendering our patents unenforceable;

•  we may have to participate in proceedings such as interference, cancellation, or opposition, before the United States Patent and Trademark Office, or before foreign patent and trademark offices, with respect to our patents, patent applications, trademarks or trademark applications or those of others, and these actions may result in substantial costs to us as well as a diversion of management attention;

•  although we are not currently involved in any litigation involving intellectual property rights, we may need to enforce our intellectual property rights against third parties for infringement or misappropriation or defend our intellectual property rights through lawsuits, which can result in significant costs and diversion of management resources, and we may not be successful in those lawsuits;

•  we rely on trade secret protections to protect our interests in proprietary know-how and processes for which patents are difficult to obtain or enforce; however, we may not be able to protect our trade secrets adequately; and

•  the contractual provisions on which we rely to protect our trade secrets and proprietary information, such as our confidentiality and non-disclosure agreements with our employees, consultants and other

24

third parties, may be breached, and our trade secrets and proprietary information may be disclosed to competitors, strategic partners and the public, or others may independently develop technology equivalent to our trade secrets and proprietary information.

Our technology and products could infringe intellectual property rights of others, which may require costly litigation and, if we are not successful, could cause us to pay substantial damages and disrupt our business.

In recent years, there has been significant litigation involving patents and other intellectual property rights in many technology-related industries. There may be patents or patent applications in the United States or other countries that are pertinent to our products or business of which we are not aware. The technology that we incorporate into and use to develop and manufacture our current and future solar power products may be subject to claims that they infringe the patents or proprietary rights of others. The success of our business will also depend on our ability to develop new technologies without infringing or misappropriating the proprietary rights of others. Third parties may allege that we infringe patents, trademarks or copyrights, or that we misappropriated trade secrets. These allegations could result in significant costs and diversion of the attention of management.

If a successful claim were brought against us and we are found to infringe a third party’s intellectual property right, we could be required to pay substantial damages, including treble damages if it is determined that we have willfully infringed such rights, or be enjoined from using the technology deemed to be infringing or using, making or selling products deemed to be infringing. If we have supplied infringing products or technology to third parties, we may be obligated to indemnify these third parties for damages they may be required to pay to the patent holder and for any losses they may sustain as a result of the infringement. In addition, we may need to attempt to license the intellectual property right from such third party or spend time and money to design around or avoid the intellectual property. Any such license may not be available on reasonable terms, or at all. Regardless of the outcome, litigation can be very costly and can divert management’s efforts. An adverse determination may subject us to significant liabilities and/or disrupt our business.

We may be unable to protect adequately or enforce our proprietary information, which may result in its unauthorized use, reduced revenues or otherwise reduce our ability to compete.

Our business and competitive position depend upon our ability to protect our proprietary technology, including any manufacturing processes and solar power products that we develop. Despite our efforts to protect this information, unauthorized parties may attempt to obtain and use information that we regard as proprietary. Any patents issued in connection with our efforts to develop new technology for solar power products may not be broad enough to protect all of the potential uses of the technology.

In addition, when we do not control the prosecution, maintenance and enforcement of certain important intellectual property, such as a technology in-licensed to us, the protection of the intellectual property rights may not be in our hands. If the entity that controls the intellectual property rights does not adequately protect those rights, our rights may be impaired, which may impact our ability to develop, market and commercialize the related solar power products.

Our means of protecting our proprietary rights may not be adequate, and our competitors may:

•  independently develop substantially equivalent proprietary information, products and techniques;

•  otherwise gain access to our proprietary information; or

•  design around our patents or other intellectual property.

We pursue a policy of having our employees, consultants and advisors execute proprietary information and invention agreements when they begin working for us. However, these agreements may not provide meaningful protection for our trade secrets or other proprietary information in the event of unauthorized use or

25

disclosure. If we fail to maintain trade secret and patent protection, our potential, future revenues may be decreased.

Licenses for technologies and intellectual property may not be available to us.

We have entered into license agreements for technologies and intellectual property rights, including an agreement relating to the manufacture of string we intend to use to produce String Ribbon wafers. Any of our license agreements may be subject to terms and conditions which may limit our ability to use the licensed intellectual property under certain circumstances. For example, our string-related license may terminate if we materially breach the license agreement or if we abandon the construction of a manufacturing facility to exploit the licensed technology. We may need to enter into additional license agreements in the future for other technologies or intellectual property rights of third parties. Such licenses, however, may not be available to us on commercially reasonable terms or at all.

Existing regulations and changes to such regulations concerning the electrical utility industry may present technical, regulatory and economic barriers to the purchase and use of solar power products, which may significantly reduce demand for our products.

The market for electricity generation products is heavily influenced by foreign, federal, state and local government regulations and policies concerning the electric utility industry, as well as internal policies and regulations promulgated by electric utilities. These regulations and policies often relate to electricity pricing and technical interconnection of customer-owned electricity generation. In the United States and in a number of other countries, these regulations and policies are being modified and may continue to be modified. Customer purchases of, or further investment in the research and development of, alternative energy sources, including solar power technology, could be deterred by these regulations and policies, which could result in a significant reduction in the potential demand for our solar power products. For example, utility companies commonly charge fees to larger, industrial customers for disconnecting from the electric grid or for having the capacity to use power from the electric grid for back-up purposes. These fees could increase the cost to our customers of using our solar power products and make them less desirable, thereby harming our business, prospects, results of operations and financial condition.

We anticipate that our solar power products and their installation will be subject to oversight and regulation in accordance with national, state and local laws and ordinances relating to building codes, safety, environmental protection, utility interconnection and metering and related matters. There is also a burden in having to track the requirements of individual states and design equipment to comply with the varying standards. Any new government regulations or utility policies pertaining to our solar power products may result in significant additional expenses to us and our resellers and their customers and, as a result, could cause a significant reduction in demand for our solar power products.

Compliance with environmental regulations can be expensive, and noncompliance with these regulations may result in potentially significant monetary damages and penalties and adverse publicity.

If we fail to comply with present or future environmental laws or regulations we may be required to pay substantial civil or criminal penalties, incur significant capital expenditures, suspend or limit production or cease operations. We use toxic, volatile and otherwise hazardous chemicals in our research and development and manufacturing activities, and generate and discharge hazardous emissions, effluents and wastes from these operations. Any failure by us to control the use of or generation of, or to restrict adequately the discharge or disposal of, hazardous substances or wastes or to otherwise comply with the complex, technical environmental regulations governing our activities could subject us to potentially significant monetary damages and penalties, criminal proceedings, third party property damage or personal injury claims, natural resource damage claims, cleanup costs or other costs, or restrictions or suspensions of our business operations. In addition, under some foreign, federal and state statutes and regulations governing liability for releases of hazardous substances or wastes to the environment, a governmental agency or private party may seek recovery of response costs or damages from generators of the hazardous substances or operators of property where releases of hazardous substances have occurred or are ongoing, even if such party was not responsible for the release or otherwise at

26

fault. Also, federal, state or international environmental laws and regulations may ban or restrict the availability and use of certain hazardous or toxic raw materials that are or may be used in producing our products, and substitute materials may be more costly or unsatisfactory in performance. We believe that we either have all environmental permits necessary to conduct our business or have initiated the process to obtain additional or modified environmental permits needed to conduct our business. While we are not aware of any outstanding, material environmental claims, liabilities or obligations, future developments such as the implementation of new, more stringent laws and regulations, more aggressive enforcement policies, or the discovery of unknown environmental conditions associated with our current or past operations or properties may require expenditures that could have a material adverse effect on our business, results of operations or financial condition. Any noncompliance with or incurrence of liability under environmental laws may subject us to adverse publicity, damage our reputation and competitive position and adversely affect sales of our products.

Compliance with occupational safety and health requirements and best practices can be costly, and noncompliance with such requirements may result in potentially significant monetary penalties and adverse publicity.

Our manufacturing operations and research and development activities involve the use of mechanical equipment and hazardous chemicals, which involve a risk of potential injury to our employees. These operations are subject to regulation under the Occupational Safety and Health Act, or OSHA. If we fail to comply with OSHA requirements, or if an employee injury occurs, we may be required to pay substantial penalties, incur significant capital expenditures, suspend or limit production or cease operations. Also, any such violations, employee injuries or failure to comply with industry best practices may subject us to adverse publicity, damage our reputation and competitive position and adversely affect sales of our products.

Product liability claims against us could result in adverse publicity and potentially significant monetary damages.

Like other retailers, distributors and manufacturers of products that are used by consumers, we face an inherent risk of exposure to product liability claims in the event that the use of the solar power products we sell results in injury. Since our products are electricity producing devices, it is possible that consumers could be injured or killed by our products, whether by product malfunctions, defects, improper installation or other causes. In addition, since revenues generated from our existing products have been modest and the products we are developing incorporate new technologies and use new installation methods, we cannot predict whether or not product liability claims will be brought against us in the future or the effect of any resulting adverse publicity on our business. We rely on our general liability insurance to cover product liability claims and have not obtained separate product liability insurance. The successful assertion of product liability claims against us could result in potentially significant monetary damages and if our insurance protection is inadequate to cover these claims, they could require us to make significant payments. Also, any product liability claims and any adverse outcomes with respect thereto may subject us to adverse publicity, damage our reputation and competitive position and adversely affect sales of our products.

A material portion of our revenue has been generated from our relationship with EverQ and EverQ faces many of the same risks and uncertainties we face.

Recently, due to the expansion of EverQ’s production, we have realized substantial revenue and income associated with royalties, selling fees and our share of EverQ’s net income. Since EverQ is engaged in the same business and utilizes our String Ribbon technology, EverQ is subject, in many ways, to the same risks and uncertainties we face. As such, if any of these risks and uncertainties substantially and adversely impacts EverQ, our future revenue and share of EverQ’s profits could be adversely affected.

27

Risks Related to Our Common Stock

The issuance or sale of equity, convertible or exchangeable securities in the market, or the perception of such future sales or issuances, could lead to a decline in the price of our common stock.

Any issuance of equity, convertible or exchangeable securities, including for the purposes of financing acquisitions and the expansion of our business, may have a dilutive effect on our existing stockholders. In addition, the perceived risk associated with the possible issuance of a large number of shares or securities convertible or exchangeable into a large number of shares could cause some of our stockholders to sell their stock, thus causing the price of our stock to decline. Subsequent sales of our common stock in the open market or the private placement of our common stock or securities convertible or exchangeable into our common stock could also have an adverse effect on the market price of the shares. If our stock price declines, it may be more difficult for us to or we may be unable to raise additional capital.

In addition, future sales of substantial amounts of our currently outstanding common stock in the public market, or the perception that such sales could occur, could adversely affect prevailing trading prices of our common stock and could impair our ability to raise capital through future offerings of equity or equity-related securities. We cannot predict what effect, if any, future sales of our common stock, or the availability of shares for future sales, will have on the market price of our stock. As of December 31, 2007, we had:

•  102,252,965 shares of common stock outstanding;

•  4,184,789 shares of common stock underlying options outstanding at a weighted average exercise price of $4.43 per share;

•  1,302,347 shares of common stock available and reserved for future issuance or future grant under our Amended and Restated 2000 Stock Option and Incentive Plan;

•  388,335 shares of common stock available and reserved for future issuance or future grant under our Amended and Restated 2000 Employee Stock Purchase Plan;

•  467,328 shares of common stock underlying warrants outstanding with an exercise price of $3.34 per share; and

•  12,179,000 shares of common stock issuable upon the conversion of our outstanding convertible subordinated notes in the aggregate principal amount of $90.0 million at an initial conversion rate of 135.3180 shares of common stock per $1,000 principal amount of notes (equivalent to a conversion price of approximately $7.39 per share).

In connection with a multi-year polysilicon supply agreement and pursuant to a stockholders agreement, each of which we entered into with DC Chemical in April 2007, DC Chemical owns 10,750,000 shares of our restricted common stock. The restrictions on the stock will lapse upon the satisfaction of certain conditions related to DC Chemical’s delivery of polysilicon under the supply agreement, at which time we will be obligated to file a registration statement pursuant to which such shares will become freely tradable. We currently expect DC Chemical to satisfy this delivery obligation in early 2010.

In connection with our recent public offering, we, our executive officers and directors, and DC Chemical entered into lock-up agreements which restrict the sale of shares of common stock until about May 15, 2008. The shares held by our executive officers and directors, and DC Chemical represent approximately 18,186,145 shares, or 15%, of our outstanding common stock as of February 15, 2008. Following the termination of these lock-up periods, these stockholders will have the ability to sell a substantial number of shares of common stock in the public market in a short period of time. In addition, following the expiration of the lock-up period, we will not be contractually prohibited from issuing and selling shares of our common stock. Sales of a substantial number of shares of common stock in the public trading markets, whether in a single transaction or a series of transactions, or the perception that these sales may occur, could also have a significant effect on volatility and market price of our common stock.

28

DC Chemical owns a large portion of our outstanding voting power and may be able to influence significantly the outcome of any stockholder vote.

DC Chemical owns 15,699,441 shares of our common stock (which number includes 10,750,000 shares of restricted common stock, which have full voting rights), representing approximately 13% of our voting power outstanding as of February 15, 2008. In addition, pursuant to the stockholders agreement we entered into with DC Chemical, DC Chemical has the right to purchase securities in future offerings. Accordingly, DC Chemical can significantly influence matters requiring approval by our stockholders, including the election of directors and the approval of mergers or other extraordinary transactions. The interests of DC Chemical may differ from yours and DC Chemical may vote in a way with which you disagree and which may be adverse to your interests. This concentration of ownership may have the effect of delaying, preventing or deterring a change of control of our company, and might ultimately affect the market price of our common stock.

The price of common stock may fluctuate significantly, which could result in substantial losses for our stockholders and subject us to litigation.

Our common stock is quoted on The Nasdaq Global Market. The trading price of our common stock has been and may continue to be volatile. The closing sale prices of our common stock, as reported by The Nasdaq Global Market, have ranged from $8.17 to $18.84 for the 52-week period from February 17, 2007 to February 15, 2008. Our operating performance will significantly affect the market price of our common stock. To the extent we are unable to compete effectively and gain market share or the other factors described in this risk factors section affect us, our stock price will likely decline. The market price of our common stock also may be adversely impacted by broad market and industry fluctuations regardless of our operating performance, including general economic and technology trends. The Nasdaq Global Market has, from time to time, experienced extreme price and trading volume fluctuations, and the market prices of technology companies such as ours have been extremely volatile. In addition, some companies that have experienced volatility in the market price of their stock have been the subject of securities class action litigation. We may be involved in securities class action litigation in the future. This litigation often results in substantial costs and a diversion of management’s attention and resources.

Our quarterly revenue, operating results and market price of our common stock have fluctuated significantly in the past and may fluctuate significantly from quarter to quarter in the future due to a variety of factors, including:

•  the size and timing of orders from distribution partners for or shipments of our products;

•  the rate and cost at which we are able to expand our manufacturing capacity to meet product demand, including the rate and cost at which we are able to implement advances in our StringRibbon technology;

•  our ability to establish and expand key distribution partners and supplier relationships;

•  our ability and the terms upon which we are able to raise capital sufficient to finance the expansion of our manufacturing capacity and our sales and marketing efforts;

•  our ability to open Devens I and Devens II and other potential capacity expansions within budget and within the time frame that we expect;

•  EverQ’s ability to expand within budget and within the time frame that they expect;

•  our ability to establish strategic relationships with third parties to accelerate our growth plans;

•  the amount and timing of expenses associated with our research and development programs and our ability to develop enhancements to our manufacturing processes and our products;

•  delays associated with the supply of specialized materials necessary for the manufacture of our solar power products;

•  our ability to execute our cost reduction programs;

•  charges resulting from replacing existing equipment or technology with new or improved equipment or technology as part of our strategy to expand our manufacturing capacity and to decrease our per unit manufacturing cost;

29

•  developments in the competitive environment, including the introduction of new products or technological advancements by our competitors;

•  the timing of adding the personnel necessary to execute our growth plan; and

•  the other risks and uncertainties described in “Risk Factors.”

We anticipate that our operating expenses will continue to increase significantly, particularly as we develop our internal infrastructure to support our anticipated growth. If our product revenues in any quarter do not increase correspondingly, our net losses for that period will increase. Moreover, given that a significant portion of our operating expenses is largely fixed in nature and cannot be quickly reduced, if our product revenues are delayed or below expectations, our operating results are likely to be adversely and disproportionately affected. For these reasons, quarter-to-quarter comparisons of our results of operations are not necessarily meaningful and you should not rely on results of operations in any particular quarter as an indication of future performance. If our quarterly revenue or results of operations fall below the expectations of investors or public market analysts in any quarter, the market value of our common stock would likely decrease, and it could decrease rapidly and substantially.

Because we do not intend to pay dividends on our common stock, stockholders will benefit from an investment in our common stock only if it appreciates in value.

We have never declared or paid any cash dividends on our common stock. We anticipate that we will retain our future earnings, if any, to support our operations and to finance the growth and development of our business and do not expect to pay cash dividends in the foreseeable future. As a result, the success of an investment in our common stock will depend upon any future appreciation in the value of our common stock. There is no guarantee that our common stock will appreciate in value or even maintain its current price.

We are subject to anti-takeover provisions in our charter and by-laws and under Delaware law that could delay or prevent an acquisition of our company, even if the acquisition would be beneficial to our stockholders.

Provisions of our certificate of incorporation and by-laws, each as amended, as well as Delaware law, could make it more difficult and expensive for a third party to pursue a tender offer, change in control transaction or takeover attempt that is opposed by our board of directors. Stockholders who wish to participate in these transactions may not have the opportunity to do so. We also have a staggered board of directors, which makes it difficult for stockholders to change the composition of our board of directors in any one year. If a tender offer, change in control transaction, takeover attempt or change in our board of directors is prevented or delayed, the market price of our common stock could decline. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stock if they are viewed as discouraging takeover attempts in the future.

We can issue shares of preferred stock that may adversely affect the rights of a stockholder of our common stock.

Our certificate of incorporation authorizes us to issue up to 27,227,668 shares of preferred stock with designations, rights and preferences determined from time-to-time by our board of directors. Accordingly, our board of directors is empowered, without stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting or other rights superior to those of stockholders of our common stock. For example, an issuance of shares of preferred stock could:

•  adversely affect the voting power of the stockholders of our common stock;

•  discourage bids for our common stock at a premium and make it more difficult for a third party to acquire a majority of our common stock;

•  limit or eliminate any payments that the stockholders of our common stock could expect to receive upon our liquidation; or

30

•  otherwise adversely affect the market price of our common stock.

We have in the past and we may in the future issue additional shares of authorized preferred stock at any time.

ITEM 1B.   UNRESOLVED STAFF COMMENTS.

None.

ITEM 2.   PROPERTIES.

As of December 31, 2007, we lease the following locations pursuant to long-term leases:

Location	Area (Sq. Ft)		Purpose
138 Bartlett Street, Marlboro, MA		30,000	Corporate Headquarters & Warehouse
259 Cedar Hill Street, Marlboro, MA		56,000	Manufacturing
257 Cedar Hill Street, Marlboro, MA		40,000	Research & Development
Barnum Road, Devens, MA		476,000	Manufacturing (facility under construction)

Our leases expire on various dates between June 2009 and January 2013 other than our Devens lease which continues until 2037 and can be extended to 2057. As of December 31, 2007, we were productively utilizing substantially all of the space in our facilities other than the Devens facility which is now under construction.

Our Devens facility is being constructed on property in Devens, Massachusetts we are leasing from a Massachusetts state agency for an annual rent of $1. Combined, our Devens I, Devens II, and string factory will occupy approximately 476,000 square feet. We have an option to purchase this property on or before November 20, 2012 for a purchase price of $2.7 million or thereafter for the remainder of the initial 30-year term of the lease for the greater of $2.7 million and the fair market value of the property.

We believe that our facilities are suitable and adequate for our present needs and we periodically evaluate whether additional facilities are necessary. We will need to lease or acquire additional properties in the future and develop those properties to accommodate our long-term capacity expansion plans.

ITEM 3.   LEGAL PROCEEDINGS.

We are not a party to any material legal proceedings.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matters were submitted to a vote of security holders during the quarter ended December 31, 2007.

31

PART II

ITEM 5.   MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES:

Market for Our Common Stock

Our common stock is traded on the Nasdaq Global Market under the symbol “ESLR”. The following table sets forth for the calendar periods indicated, the high and low sales price of our common stock on the Nasdaq Global Market.

	High		Low
Year ended December 31, 2006
First Quarter	$	17.50	$	10.77
Second Quarter	$	16.25	$	10.00
Third Quarter	$	13.50	$	7.90
Fourth Quarter	$	9.80	$	7.27
Year ended December 31, 2007
First Quarter	$	10.98	$	6.97
Second Quarter	$	13.21	$	8.11
Third Quarter	$	10.49	$	7.95
Fourth Quarter	$	18.85	$	8.95

On February 15, 2008, the last reported sale price for our common stock on the Nasdaq Global Market was $10.47 per share. As of February 15, 2008, there were 120,987,715 shares of our common stock outstanding held by approximately 326 holders of record.

We have never declared or paid any cash dividends on our common stock. We anticipate that we will retain our earnings to support operations and to finance the growth and development of our business and do not expect to pay cash dividends on our common stock in the foreseeable future.

Information about our equity incentive plans can be found in note 7 and note 8 to our consolidated financial statements contained within this Annual Report on Form 10-K.

32

STOCK PERFORMANCE GRAPH

The following graph compares the cumulative total stockholder return on our common stock against the cumulative total return of (i) the Hemscott Weighted Nasdaq Index (the “NASDAQ Market Index”) and (ii) an SIC Index that includes all organizations in the Hemscott Group 836 Code Index — Diversified Electronics (the “SIC Code Index”) for the five fiscal years beginning January 1, 2003 and ending December 31, 2007. The comparison assumes $100 was invested at the close of business on December 29, 2002, the last trading day before the beginning of the Company’s fifth preceding fiscal year, in our common stock and in each of the foregoing indices and assumes dividends, if any, were reinvested. The comparisons are provided in response to SEC disclosure requirements and are not intended to forecast or be indicative of future performance.

COMPARISON OF CUMULATIVE TOTAL RETURN AMONG
EVERGREEN SOLAR, INC., SIC CODE INDEX
AND NASDAQ MARKET INDEX

COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN

AMONG EVERGREEN SOLAR, INC.,

NASDAQ MARKET INDEX AND HEMSCOTT GROUP INDEX

ASSUMES $100 INVESTED ON DEC. 31, 2002
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDED DEC. 31, 2007

	12/31/02		12/31/03		12/31/04		12/31/05		12/31/06		12/31/07
Evergreen Solar, Inc.	$	100.00	$	130.23	$	338.76	$	825.58	$	586.82	$	1,338.76
SIC Code Index	$	100.00	$	156.97	$	154.28	$	152.34	$	165.84	$	206.13
NASDAQ Market Index	$	100.00	$	150.36	$	163.00	$	166.58	$	183.68	$	201.91

(1)	The preceding Stock Performance Graph is not “soliciting material,” is not deemed filed with the Securities and Exchange Commission and shall not be incorporated by reference in any of our filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
(2)	Information used on the graph was obtained from Hemscott, Inc., a source believed to be reliable, but we are not responsible for any errors or omissions in such information.

33

ITEM 6.   SELECTED FINANCIAL DATA:

You should read the data set forth below in conjunction with our financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” appearing elsewhere in this filing. The statement of operations data presented below for the fiscal years ended December 31, 2005, 2006, and 2007 and the balance sheet data at December 31, 2006 and 2007 have been derived from our audited financial statements which appear elsewhere in this filing. The statement of operations data presented below for the years ended December 31, 2003 and 2004, and the balance sheet data at December 31, 2003, 2004 and 2005 have been derived from our audited financial statements, which are not included in this filing. As of December 31, 2005 we owned 64% of EverQ. On December 19, 2006 we reduced our interest to one-third. As a result of our reduction in ownership to one-third, effective December 20, 2006, we account for our ownership interest in EverQ using the equity method of accounting. Under the equity method of accounting, we report our one-third share of EverQ’s net income or loss as a single line item in our income statement and our investment in EverQ as a single line item on our balance sheet. Prior to December 20, 2006, we consolidated EverQ’s results of operations into our results of operations. Therefore, our results of operations from prior periods are not comparable with our results of operations since December 20, 2006. Under our sales agreement with EverQ, we continue to market and sell all solar panels manufactured by EverQ under the Evergreen Solar brand, as well as manage customer relationships and contracts, for which we receive fees. We do not report product revenue or cost of revenue for the sale of EverQ panels. We also receive royalty payments pursuant to our technology license agreement with EverQ.

	For the Year Ended December 31
	2003			2004			2005			2006			2007
STATEMENT OF OPERATIONS DATA:
Revenues:
Product	$	7,746		$	22,240		$	43,627		$	102,252		$	58,334
Royalty and fee		—			—			—			—			11,532
Total Revenues		7,746			22,240			43,627			102,252			69,866
Cost of revenue		15,379			29,717			39,954			90,310			52,838
Gross profit (loss)		(7,633	)		(7,477	)		3,673			11,942			17,028
Operating Expenses:
Research and development		2,226			3,392			10,622			18,390			20,594
Selling, general and administrative		5,337			8,040			12,708			21,890			20,608
Facility start-up		—			—			—			—			1,404
Loss on disposal of fixed assets		—			—			—			1,526			—
Total operating expenses		7,563			11,432			23,330			41,806			42,606
Operating loss		(15,196	)		(18,909	)		(19,657	)		(29,864	)		(25,578	)
Other income (expense), net		222			(454	)		1,146			1,851			6,806
Loss before minority interest, equity income and accretion		(14,974	)		(19,363	)		(18,511	)		(28,013	)		(18,772	)
Minority interest in EverQ		—			—			1,195			849			—
Equity income from interest in EverQ		—			—			—			495			2,170
Accretion, dividends and conversion premiums on Series A convertible preferred stock		(13,498	)		(2,904	)		—			—			—
Net loss	$	(28,472	)	$	(22,267	)	$	(17,316	)	$	(26,669	)	$	(16,602	)
Net loss per share (basic and diluted)	$	(2.39	)	$	(0.67	)	$	(0.29	)	$	(0.41	)	$	(0.19	)
Weighted average shares used in computing basic and diluted net loss per share		11,899			33,204			59,631			65,662			86,799

34

	As of December 31
	2003		2004		2005		2006		2007
BALANCE SHEET DATA:
Cash, cash equivalents and marketable securities*	$	20,340	$	11,942	$	116,207	$	49,421	$	140,703
Investment in and advances to EverQ		—		—		—		70,460		87,894
Working capital		22,039		14,281		124,404		57,590		112,228
Total assets		45,976		49,721		228,959		207,251		553,255
Subordinated convertible notes		—		—		90,000		90,000		90,000
Convertible preferred stock		27,032		—		—		—		—
Total stockholders’ equity		16,944		41,520		87,450		92,847		393,293

* Includes restricted cash at December 31, 2007

ITEM 7.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

EXECUTIVE OVERVIEW

We develop, manufacture and market solar panels utilizing our proprietary String Ribbon^tm technology. String Ribbon technology is a cost effective process for manufacturing ribbons of crystalline silicon that are then cut into wafers. These wafers are the primary components of photovoltaic, or PV, cells which, in turn, are used to produce solar panels. We believe that our proprietary and patented technologies, combined with our integrated manufacturing process know-how, offer significant cost and manufacturing advantages over competing polysilicon-based PV technologies. With silicon consumption of less than five grams per watt, we believe we are the industry leader in efficient polysilicon consumption and use approximately 50% of the silicon used by conventional sawing wafer production processes.

Through intensive research and design efforts we have significantly enhanced our String Ribbon technology and our ability to manufacture crystalline silicon wafers by developing a quad ribbon wafer furnace, which enables us to grow four silicon ribbons from one furnace compared to two silicon ribbons grown with our dual ribbon furnace presently in use in our prototype facility in Marlboro, Massachusetts. Our quad ribbon furnace incorporates a state of the art automated ribbon cutting technology that we expect will improve our manufacturing process when it is used in our future factories. We have used quad ribbon furnaces to produce a limited quantity of solar panels in our Marlboro facility which have been sold to our distribution partners and will use quad furnaces in our new manufacturing facility in Devens, Massachusetts.

Our revenues today are primarily derived from the sale of solar panels, which are assemblies of PV cells that have been electrically interconnected and laminated in a physically durable and weather-tight package. We sell our products using distributors, systems integrators and other value-added resellers, who often add value through system design by incorporating our panels with electronics, structures and wiring systems. The primary applications for our current products is on-grid generation, in which supplemental electricity is provided to an electric utility grid, but has in the past and is expected in the future to include off-grid generation for markets where access to conventional electric power is not economical or physically feasible. Our products are currently sold primarily in the United States, Germany and Korea.

We began construction in Devens, Massachusetts in September 2007 and expect to begin production of solar panels there in mid-2008. Upon reaching full production capacity in Devens I, which we expect to take place in early 2009, Devens I is expected to increase our current manufacturing capacity of 15 MW by approximately 80 MW. In addition, Devens II, which is expected to add a second production line in early 2009, should increase our production capacity at the Devens facility to approximately 160 MW by late 2009. Our String Ribbon technology is also used by EverQ, which has grown its annual production capacity to approximately 100 MW as of December 31, 2007. EverQ is currently planning to expand its annual manufacturing capacity to 600 MW by 2012 using our quad ribbon wafer furnaces.

35

In connection with our manufacturing expansion plans, we have entered into multi-year polysilicon supply agreements and multi-year panel sales agreements. Under our silicon supply agreements with DC Chemical, Wacker, Nitol and Silpro, including an agreement entered into with DC Chemical in January 2008, we have silicon under contract to reach annual production levels of approximately 125 MW in 2009, 300 MW in 2010, 600 MW in 2011 and 850 MW in 2012. We plan to expand our manufacturing operations accordingly. The combined production of our Marlboro facility, Devens I and Devens II and EverQ will be used to satisfy the requirements of the sales agreements that we have entered with six customers, including for the sale of approximately $900 million in solar panels over the next four years.

On February 15, 2008, we completed an underwritten public offering of 18.4 million shares of our common stock, which included the exercise of an underwriters’ option to purchase 2.4 million additional shares. We received net proceeds of approximately $166.9 million (net of underwriting discounts). The shares of common stock were sold at a per share price to the public of $9.50.

We believe that our current cash, cash equivalents, marketable securities and access to the capital markets will be sufficient to fund our planned capital programs and to fund our operating expenditures over the next twelve months, including the completion of construction of Devens I in mid-2008 and the development of Devens II beginning in March of 2008. We will be required to raise additional capital to provide further funding to complete Devens II, secure raw materials or necessary technologies. We do not know whether we will be able to raise additional financing or whether we will be able to do so on terms favorable to us. If adequate funds are not available or are not available on acceptable terms, our ability to fund our operations, further develop and expand our manufacturing operations and distribution network, or otherwise respond to competitive pressures would be significantly limited.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of consolidated financial statements in accordance with generally accepted accounting principals requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities, if applicable. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements:

Accounting for EverQ

On December 19, 2006, we became equal partners in EverQ with Q-Cells and REC and now share equally in its prospective net income or loss. As a result of our reduction in ownership to one-third, we are required to account for our interest in EverQ under the equity method of accounting, as opposed to consolidating the operating results of EverQ as we had in the past. Under the equity method of accounting, we report our one-third share of EverQ’s net income or loss as a single line item in our statement of operations and our investment in EverQ as a single line item in our balance sheet. We began applying the equity method with respect to EverQ on December 20, 2006.

We market and sell all solar panels manufactured by EverQ under the Evergreen Solar brand, as well as manage customer relationships and contracts. We receive fees from EverQ and no longer consolidate their gross revenue or cost of goods sold resulting from the sale of EverQ’s solar panels. During 2007, we received a fee of 1.7% of gross EverQ revenue relating to the sales and marketing of solar panels. In addition, we received royalty payments for our ongoing technology agreement with EverQ. Taken together, the sales and marketing fee and royalty payments totaled approximately 6.0% of gross EverQ revenue for fiscal 2007. We also received payments from EverQ of approximately $1.9 million in fiscal 2007 to reimburse us for certain research and development and other support costs we incurred that could benefit EverQ. Income statement classification of these research and development reimbursement payments depend on how we are reimbursed.

36

A best efforts arrangement allows for the reimbursement to offset expenses whereas a specific performance arrangement requires us to record both revenue and an offsetting cost of revenue. These reimbursements in fiscal 2007 were best efforts in nature and therefore are shown as a reduction of our expenses.

Revenue Recognition and Allowance for Doubtful Accounts

We recognize product revenue if there is persuasive evidence of an agreement with the customer, shipment has occurred, risk of loss has transferred to the customer, the sales price is fixed or determinable, and collectability is reasonably assured. The market for solar power products is emerging and rapidly evolving. We currently sell our solar power products primarily to distributors, system integrators and other value-added resellers within and outside of North America, who typically resell our products to end users throughout the world. For new customers requesting credit, we evaluate creditworthiness based on credit applications, feedback from provided references, and credit reports from independent agencies. For existing customers, we evaluate creditworthiness based on payment history and known changes in their financial condition. Royalty and fee revenue are recognized at contractual rates upon shipment of product by EverQ.

We also evaluate the facts and circumstances related to each sales transaction and consider whether risk of loss has passed to the customer upon shipment. We consider whether our customer is purchasing our product for stock, and whether contractual or implied rights to return the product exist or whether our customer has an end user contractually committed. To date, we have not offered rights to return our products other than for normal warranty conditions.

We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. If the financial condition of our customers were to deteriorate, such that their ability to make payments was impaired, additional allowances could be required.

Warranty

We have provided for estimated future warranty costs of approximately $705,000 as of December 31, 2007, representing our best estimate of the likely expense associated with fulfilling our obligations under such warranties. We engage in product quality programs and processes, including monitoring and evaluating the quality of component suppliers, in an effort to ensure the quality of our product and reduce our warranty exposure. Our warranty obligation will be effected not only by our product failure rates, but also the costs to repair or replace failed products and potentially service and delivery costs incurred in correcting a product failure. If our actual product failure rates, repair or replacement costs, service or delivery costs differ from these estimates, accrued warranty costs would be adjusted in the period that such events or costs become known.

Stock-based Compensation

On January 1, 2006, we adopted the provisions of Statement of Financial Accounting Standards No. 123 — (revised 2004), “Share-Based Payment” (“SFAS 123R”). SFAS 123R requires entities to measure compensation cost arising from the grant of share-based payments to employees at fair value and to recognize such cost in income over the period during which the employee is required to provide service in exchange for the award, usually the vesting period. We selected the modified prospective method for implementing SFAS 123R and began applying the provisions to stock-based awards granted on or after January 1, 2006, plus any unvested awards granted prior to January 1, 2006. Total equity compensation expense recognized during the years ended December 31, 2006 and 2007, was approximately $5.1 million and $6.4 million, respectively. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the awards’ service periods, which are the vesting periods, less estimated forfeitures. Estimated compensation for grants that were outstanding as of the effective date will be recognized over the remaining service period using the compensation cost estimated for the SFAS 123R pro forma disclosures for prior periods.

During 2007 and 2006, we granted 900,000 shares and 800,000 shares, respectively, of performance-based restricted stock, all of which immediately vest upon the achievement of specific financial performance targets

37

prior to 2012 and 2011, respectively. We have assumed that none of these performance-based awards will vest and accordingly have not provided for compensation expense associated with the awards. We periodically evaluate the likelihood of reaching the performance requirements and will be required to recognize compensation expense of approximately $18.2 million associated with these performance-based awards if such awards should vest.

See Note 7 of our consolidated financial statements for further information regarding our stock-based compensation assumptions and expenses, including pro forma disclosures for prior periods as if we had recorded stock-based compensation expense in accordance with SFAS 123R.

Inventory

Inventory is valued at the lower of cost or market determined on a first-in, first-out basis. Certain factors may impact the realizable value of our inventory including, but not limited to, technological changes, market demand, changes in product mix strategy, new product introductions and significant changes to our cost structure. Estimates of reserves are made for obsolescence based on the current product mix on hand and its expected net realizable value. If actual market conditions are less favorable or other factors arise that are significantly different than those anticipated by management, additional inventory write-downs or increases in obsolescence reserves may be required. We consider lower of cost or market adjustments and inventory reserves as an adjustment to the cost basis of the underlying inventory. Accordingly, favorable changes in market conditions are not recorded to inventory in subsequent periods.

Impairment of Long-lived Assets

Our policy regarding long-lived assets is to evaluate the recoverability or usefulness of these assets when the facts and circumstances suggest that these assets may be impaired. This analysis relies on a number of factors, including changes in strategic direction, business plans, regulatory developments, economic and budget projections, technological improvements, and operating results. The test of recoverability or usefulness is a comparison of the asset value to the undiscounted cash flow of its expected cumulative net operating cash flow over the asset’s remaining useful life. If such a test indicates that an impairment exists, then the asset is written down to its estimated fair value. Any write-downs would be treated as permanent reductions in the carrying amounts of the assets and an operating loss would be recognized. To date, we have had recurring operating losses and the recoverability of our long-lived assets is contingent upon executing our business plan that includes further reducing our manufacturing costs and significantly increasing sales. If we are unable to execute our business plan, we may be required to write down the value of our long-lived assets in future periods.

Income Taxes

We are required to estimate our income taxes in each of the jurisdictions in which we operate as part of our consolidated financial statements. This involves estimating the actual current tax in addition to assessing temporary differences resulting from differing treatments for tax and financial accounting purposes. These differences together with net operating loss carryforwards and tax credits may be recorded as deferred tax assets or liabilities on the balance sheet. A judgment must then be made of the likelihood that any deferred tax assets will be recovered from future taxable income. To the extent that we determine that it is more likely than not that deferred tax assets will not be utilized, a valuation allowance is established. Taxable income in future periods significantly different from that projected may cause adjustments to the valuation allowance that could materially increase or decrease future income tax expense.

Results of Operations

Description of Our Revenues, Costs and Expenses

Revenues.  Our total revenues consist of revenues from the sale of products, royalty revenue associated with our ongoing technology agreement with EverQ, and fees from EverQ for our marketing and selling activities associated with sales of product manufactured by EverQ under the Evergreen Solar brand. Product

38

revenues consist of revenues primarily from the sale of solar cells, panels and systems. Reported product revenues represented 83%, 100% and 100% of total revenues, in 2007, 2006 and 2005, respectively.

As a result of our reduction in ownership in EverQ to one-third on December 19, 2006, we have applied the equity method of accounting for our share of EverQ results from December 20, 2006 forward. Due to this transition, a significant portion of our product revenue is generated from United State customers. International product sales accounted for approximately 18%, 63% and 71% of total product revenues for the years ended December 31, 2007, 2006 and 2005, respectively.

Cost of revenues.  Cost of product revenues consists primarily of material expenses, salaries and related personnel costs, including stock based compensation, depreciation expense, maintenance, rent and other support expenses associated with the manufacture of our solar power products.

Research and development expenses.  Research and development expenses consist primarily of salaries and related personnel costs, including stock based compensation costs, consulting expenses and prototype costs related to the design, engineering, development, testing and enhancement of our products, manufacturing equipment and manufacturing technology. We expense our research and development costs as incurred. We also may receive payments from EverQ and other third parties as reimbursement of certain research and development costs we will incur. We believe that research and development is critical to our strategic objectives of enhancing our technology, reducing manufacturing costs and meeting the changing requirements of our customers.

Selling, general and administrative expenses.  Selling, general and administrative expenses consist primarily of salaries and related personnel costs, including stock based compensation costs, employee recruiting costs, accounting and legal fees, rent, insurance and other selling and administrative expenses. We expect that selling expenses will continue to increase in absolute dollars as we increase our sales efforts to support our anticipated growth, hire additional sales personnel and initiate additional marketing programs.

Facility start-up.  Facility startup expenses consist primarily of salaries and personnel-related costs and costs of operating a new facility before it has been qualified for full production. It also includes all expenses related to the selection of a new site and the related legal and regulatory costs and the costs to maintain our plant expansion program, to the extent we cannot capitalize these expenditures. We expect to incur significant facility start-up expenses as we continue to plan, construct and qualify new facilities, including costs associated with our new facility currently under construction in Massachusetts.

Other income (expense).  Other income (expense) consists of interest income primarily from interest earned on the holding of short-term marketable securities, bond premium amortization (or discount accretion), interest expense on outstanding debt and net foreign exchange gains and losses.

Equity income from interest in EverQ.  As of December 20, 2006, we began accounting for our share of EverQ’s results under the equity method of accounting, which requires us to record our one-third share of EverQ’s net income or loss as one line item in our consolidated statement of operations. During the period from December 20, 2006 to December 31, 2006, EverQ recorded approximately $1.5 million in net income, of which we recorded approximately $495,000 in our consolidated statement of operations. For the year ended December 31, 2007, EverQ recorded approximately $6.5 million in net income, of which we recorded approximately $2.2 million in our consolidated statement of operations.

Minority interest.  Through December 19, 2006, we consolidated the financial results of EverQ in our financial statements. Through December 19, 2006, EverQ incurred losses of $2.4 million, which are consolidated in our financial statements. However, $849,000 of those losses represents the portion of EverQ losses attributable to the Q-Cells and REC minority interests for the period ended December 19, 2006.

COMPARISON OF YEARS ENDED DECEMBER 31, 2007 AND 2006

Through December 19, 2006, we owned 64% of EverQ and consolidated the financial statements of EverQ. As a result of our reduction in ownership in EverQ to one-third on December 19, 2006, we have

39

applied the equity method of accounting for our share of EverQ’s operating results from December 20, 2006. This change in accounting has significantly impacted year-over-year comparability.

Revenues.  Our product revenues for the year ended December 31, 2007 were $58.3 million, a decrease of $43.9 million, or 43%, from $102.3 million for the year-ended December 31, 2006. This decrease in reported revenues is attributable to EverQ product revenues, which we consolidated with our product revenues through December 19, 2006 but are not consolidated with our product revenues in 2007. EverQ, which began shipping product in 2006, accounted for approximately $57.3 million of consolidated revenues for the year ended December 31, 2006. The decline in product revenues is partially offset by royalty revenue and marketing and selling fees from EverQ in 2007 of approximately $11.5 million.

In order to efficiently manage worldwide distribution of product based on String Ribbon technology, we fulfill orders largely based on geography. More than half of the product produced at EverQ is distributed to customers in Europe and the majority of the product produced at our Marlboro facility is distributed to customers in the United States. International product revenues accounted for approximately 18% and 63% of total revenues for the years ended December 31, 2007 and 2006, respectively. This decline in international revenues is attributable to EverQ which began product shipments in the second quarter of 2006 and now primarily fulfills European customer orders. As we increase our own capacity, including our new facility in Devens, we expect that our worldwide customer geographic mix will become more balanced.

The following table summarizes the concentration of our product revenues by geography and customer:

	2005			2006			2007
By geography:
United States		28	%		37	%		82	%
Germany		63	%		48	%		7	%
Spain		—			13	%		—
All other		9	%		2	%		11	%
		100	%		100	%		100	%
By customer:
PowerLight		—			10	%		31	%
SunEdison		—			—			14	%
groSolar		—			6	%		12	%
Krannich Solartechnik		20	%		3	%		—
Donauer Solartechnik		19	%		13	%		1	%
All other		61	%		68	%		42	%
		100	%		100	%		100	%

Cost of product revenues and gross margin.  Our cost of product revenues for the year ended December 31, 2007 was $52.8 million, a decrease of approximately $37.5 million, or 41%, from $90.3 million for the same period in 2006. Cost of product revenue for the year ended December 31, 2006 included approximately $48.1 million in costs associated with EverQ. None of EverQ’s cost of product revenue is included in our financial statements for the year ended December 31, 2007. Gross margin for the year ended December 31, 2007 was 24.4% as compared to 11.7% for the year ended December 31, 2006. The increase in gross margin primarily resulted from the royalty and selling fees earned from EverQ in the year ended December 31, 2007, in addition to improved operating efficiencies and higher production volumes at our Marlboro pilot manufacturing facility and costs allocated to research and development supporting pilot programs.

The main purpose of our Marlboro facility is to develop and prototype new manufacturing process technologies which, when developed, will be employed in new factories. As such, our manufacturing costs

40

incurred in Marlboro are substantially burdened by additional engineering costs and also reflect inefficiencies typically inherent in pilot and development operations.

As royalty and selling fees from EverQ increase in the future as a result of sales volume increases associated with factory expansion, we expect our gross margin to increase as well. There are no significant incremental sales and marketing costs incurred, or expected to be incurred, in future periods in connection with the sales and marketing agreements with EverQ. Due to the pilot manufacturing nature of our existing Marlboro facility, we do not expect substantial improvement in gross margins generated by product sold from this facility. We do expect, however, that as we scale to capacity with our new 80 MW factory that product gross margins should improve substantially.

Research and development expenses.  Our research and development expenses for the year ended December 31, 2007 were $20.6 million (net of $1.9 million of reimbursements from EverQ), an increase of $2.2 million, or 12%, from $18.4 million for the same period in 2006. The increase is primarily attributable to increased compensation and related costs, including costs supporting piloting programs, and higher depreciation and operating costs associated with expanded R&D facilities.

Loss on disposal of fixed assets.  During the year ended December 31, 2006, as a result of the successful introduction of new manufacturing technology, we disposed of equipment with a total net book value of $1.5 million in order to replace them with more technologically advanced equipment expected to improve the operational performance of our technology.

Selling, general and administrative expenses.  Our selling, general and administrative expenses for the year ended December 31, 2007 were approximately $20.6 million, a decrease of $1.3 million, or 6%, from $21.9 million in 2006. EverQ costs, which were approximately $4.9 million for the year ended December 31, 2006, were included in our consolidated selling, general and administrative expenses for the year ended December 31, 2006, and are not included in the comparable period for 2007. This decline was primarily offset by increases in compensation and related costs associated with additional personnel and higher management incentive compensation. In addition, increased costs associated with marketing communications, including our effort to re-brand Evergreen with a new logo, and increased insurance and legal costs associated with the growth of our operations and routine regulatory filings were incurred. As we begin to hire employees and scale operations for our planned expansion, we expect that selling, general, and administrative expenses will increase in future periods.

Facility start-up.  Facility start-up costs for the year ended December 31, 2007 of $1.4 million were comprised primarily of salaries and personnel related costs and legal costs associated with the construction of our new facility in Massachusetts which began in September 2007.

Other income (expense) net.  Other income, net of $6.8 million for the year ended December 31, 2007 was comprised of $444,000 in net foreign exchange gains, $9.8 million in interest income, and $3.4 million in interest expense. Other income for the period ended December 31, 2006 consisted of $3.3 million in net foreign exchange gains, $4.6 million in interest income and $6.1 million in interest expense. The increase in interest income is attributable to our higher cash balance that resulted from additional capital raised during the year ended December 31, 2007. The decline in interest expense was primarily due to the interest cost associated with the EverQ loan facility with Deutsche bank, which we consolidated with our interest expense for the year ended December 31, 2006 but is not consolidated with our interest expense in the comparable period in 2007. In addition, we have higher capitalized interest costs in 2007 associated with our on-going infrastructure improvement initiatives.

Equity income from interest in EverQ.  The equity income from our interest in EverQ of $2.2 million for the year ended December 31, 2007 represents our one-third share of EverQ’s net income of $6.5 million. EverQ’s increased net income resulted primarily from incremental production volume.

Net loss.  Net loss was $16.6 million and $26.7 million for the years ended December 31, 2007 and December 31, 2006, respectively. The decrease in our net loss was due primarily to the royalty revenue and marketing and selling fees earned from EverQ in 2007 of approximately $11.5 million offset by an overall

41

increase in our Marlboro net operating loss as we continue to scale-up our operations. The increase in our other income, net, of approximately $5.0 million, also contributed to the decline in our net loss.

COMPARISON OF YEARS ENDED DECEMBER 31, 2006 AND 2005

Revenues.  Our product revenues for the year ended December 31, 2006 were $102.3 million, an increase of $58.6 million, or 134%, from $43.6 million for the same period in 2005. The increase in product revenues was due primarily to sales of product manufactured by EverQ, which began shipping product in 2006 and accounted for approximately $57.3 million of total revenue. The first EverQ factory was completed in 2006 and reached its full capacity run rate by the fourth quarter of 2006.

Cost of product revenues and gross margin.  Our cost of product revenues for the year ended December 31, 2006 was $90.3 million, an increase of $50.3 million, or 126%, from $40.0 million for the same period in 2005. The increase was due to the cost of product revenues associated with production at EverQ, which accounted for approximately $48.1 million of total cost of product revenue. Product gross margin for the year ended December 31, 2006 was 11.7% versus 8.4% for the year ended December 31, 2005. The year-over-year improvement in product gross margin primarily resulted from improving gross margins of EverQ as manufacturing reached full capacity at its first manufacturing facility. Further improvements in gross margin may result from increases in manufacturing scale and technology improvements.

Research and development expenses.  Our research and development expenses for the year ended December 31, 2006 were $18.4 million, an increase of $7.8 million, or 73%, from $10.6 million for the same period in 2005. Approximately 54% of the increase was due to increased labor costs (including $1.6 million of expense related to the adoption of SFAS 123R) and approximately 23% of the increase was due to increases in material costs associated with internal initiatives aimed at improving our manufacturing technology.

Loss on disposal of fixed assets.  During the year, as a result of the successful introduction of new manufacturing technology, we disposed of existing equipment in order to replace them with more technologically advanced equipment expected to improve operational performance of our technology. Equipment with a total net book value of $1.5 million was disposed of.

Selling, general and administrative expenses.  Our selling, general and administrative expenses for the year ended December 31, 2006 were $21.9 million, an increase of $9.2 million, or 72%, from $12.7 million in 2005. Approximately 51% of the increase was due to increased compensation costs associated with additional personnel (including $3.0 million of expense related to the adoption of SFAS 123R, net of terminations), approximately 25% of the increase was due to general and administrative costs incurred by EverQ which are included in our consolidated statement of operations through December 19, 2006, approximately 9% related to increased legal and accounting expenses and most of the remainder was due to an increase in sales and marketing expenses incurred to support the increase in worldwide sales.

Other income.  Other income for the period ended December 31, 2006 was comprised of $3.3 million in net foreign exchange gains, $4.6 million in interest income and $6.1 million in interest expense. Other income for the period ended December 31, 2005 consisted of $5,000 in foreign exchange gains, $527,000 of gain on the sale of a portion of our EverQ interest to REC, $3.1 million in interest income and $2.5 million in interest expense. The increase in interest income was due to the larger average cash, cash equivalents and marketable securities balances during 2006 due to the 2005 common stock and subordinated convertible debt financings. Interest expense increased due to interest charges associated with increased debt incurred by EverQ as well as the impact of a full year’s worth of interest expense related to the convertible notes.

Net loss.  Net loss was $26.7 million and $17.3 million for the years ended December 31, 2006 and December 31, 2005, respectively. The increase in net loss was due primarily to the overall increase in net operating losses associated with the scale-up of EverQ operations as well as the impact of recognizing $5.1 million in expense related to the adoption of SFAS 123R.

42

LIQUIDITY AND CAPITAL RESOURCES

We have historically financed our operations and met our capital expenditure requirements primarily through sales of capital stock, issuance of debt and, to a lesser extent, product revenues; and beginning in 2007, fees from EverQ for our marketing and sale of EverQ panels and royalty payments for our technology contribution to EverQ. Research and development expenditures have historically been partially funded by government research contracts. At December 31, 2007, we had working capital of $112.2 million, including cash, cash equivalents and marketable securities of $140.7 million which includes our restricted cash on deposit with Deutsche Bank AG of $41.0 million.

Net cash used in operating activities was $7.3 million, $10.3 million and $12.0 million for the years ended December 31, 2005, 2006 and 2007, respectively. The use of cash for operating activities in the year ended December 31, 2007 was due primarily to losses from our operations of $5.7 million, net of non-cash charges, increases in inventory levels of $3.3 million, primarily silicon, in addition to prepaid cost of inventory of $23.1 million associated with new silicon supply agreements, and increases in other current assets, primarily VAT receivables. These uses were offset by reductions in accounts receivable of approximately $11.0 million associated with customer payments, and increases in accounts payable of $16.6 million. The use of cash for operating activities in the year ended December 31, 2006 was due primarily to our loss of $26.7 million, increases in accounts receivable of $12.4 million, increases in inventory of $11.0 million, and increases in other current assets of $6.7 million offset by a net increase in deferred grants funding of $19.0 million, increases in accrued expenses of $15.3 million and depreciation expense and losses on fixed assets disposals of $11.7 million. In general, net cash used in operating activities for the year ended December 31, 2006 was primarily due to supporting the increase in working capital requirements of EverQ as the first manufacturing facility ramped to full production by the end of the third quarter of 2006. The use of cash for operating activities in the year ended December 31, 2005 was due primarily to the net loss of $17.3 million and an increase in other current assets of $2.7 million, offset by increases in accounts payable of $9.3 million, a decrease in accounts receivable of $2.1 million and depreciation expense and losses on fixed asset disposals of $4.2 million.

Net cash used in investing activities was $137.3 million, $85.5 million and $140.5 million for the years ended December 31, 2005, 2006 and 2007, respectively. Net cash used in investing activities for the years ended December 31, 2005, 2006 and 2007 was primarily due to purchases of equipment and marketable securities, partially offset by proceeds from the sale and maturity of marketable securities. For the year ended December 31, 2007, we deposited approximately $41.0 million with Deutsche Bank associated with the guarantee of the EverQ loan. In addition, a loan of approximately $21.9 million was provided to Silicium De Provence (Silpro) as part of our silicon supply agreement with them. As of December 31, 2006, we no longer consolidate the balance sheet of EverQ and therefore, our cash balance at December 31, 2006 excludes EverQ’s cash balances, and the decrease in EverQ’s cash balance is reflected as a use of cash in investing activities.

Capital expenditures were $57.7 million (which includes $8.2 million of deposits for the manufacture of fixed assets), $107.7 million (which includes $7.0 million of deposits for the manufacture of fixed assets) and $50.7 million for the years ended December 31, 2005, 2006 and 2007, respectively. Capital expenditures for the years ended December 31, 2005 and 2006 were primarily for equipment needed for our Marlboro manufacturing facility and equipment for EverQ. The 2007 expenditures were primarily for facility improvements and equipment for our Marlboro manufacturing facility in addition to expenditures for construction of our new Devens, Massachusetts manufacturing facility, which will increase our production capacity in Massachusetts by approximately 160 MW in two 80 MW phases and increase our employee base to approximately 1,000 by mid 2009. The Commonwealth of Massachusetts support program is expected to include up to $23.5 million in grants, up to $17.5 million in low interest loans and a low-cost, 30-year land lease. As of December 31, 2007, we had outstanding commitments for capital expenditures of approximately $111.2 million. Most of our commitments for capital expenditures are associated with our new Devens facility and infrastructure improvements and equipment purchases for our Marlboro facility.

Net cash provided by financing activities was $171.2 million, $75.0 million and $175.1 million for the years ended December 31, 2005, 2006 and 2007, respectively. The cash provided by financing activities for the year ended December 31, 2007 resulted primarily from the net proceeds of 17,250,000 shares of our common stock sold in a public offering at $8.25 per share and which closed on May 30, 2007. An additional 3.0 million shares

43

of our common stock were sold to DC Chemical for $12.07 per share in conjunction with a stock purchase agreement. On April 6, 2007, we entered into a Loan and Security Agreement with a bank for a credit facility that provides for a $25.0 million secured revolving line of credit, which may be used to borrow revolving loans or to issue letters of credit on our behalf, and includes a foreign exchange sublimit and cash management services sublimit. The cash provided by financing activities for the year ended December 31, 2006 primarily represents an increase in EverQ debt through December 19, 2006 and cash received upon the exercise of stock options and warrants. The cash provided by financing activities for the year ended December 31, 2005 primarily represents net proceeds from common stock issued in conjunction with the common stock public offering completed in February 2005 as well as the convertible subordinated debt issuance in June 2005.

In February 2005, we completed a $62.3 million common stock offering, net of offering costs of approximately $4.4 million, to satisfy existing capital requirements and to fund the continuing capacity expansion of our Marlboro, Massachusetts manufacturing and development facilities and the expenditures necessary for the initial build-out and initial operation of EverQ. For this common stock offering, we issued 13,346,000 shares of our common stock. The shares of common stock were sold at a per share price of $5.00 (before deducting underwriting discounts).

In June 2005, we issued convertible subordinated notes (“Notes”) in the aggregate principal amount of $90.0 million, and we received proceeds of $86.9 million, net of offering costs. A portion of the proceeds from the financing was used to increase research and development spending on promising next generation technologies, to explore further expansion opportunities and to fulfill our commitments with EverQ. Interest on the Notes is payable semiannually at the annual rate of 4.375%. The Notes do not have required principal payments prior to maturity on July 1, 2012. However, the Notes are convertible at any time prior to maturity, redemption or repurchase, into shares of our common stock at an initial conversion rate of 135.3180 shares of common stock per $1,000 principal amount of Notes (equivalent to a conversion price of approximately $7.39 per share), subject to adjustment. On or after July 1, 2010, we may redeem the Notes for cash at the following prices expressed as a percentage of the principal amount:

Redemption Period	Price (%)
Beginning on July 1, 2010 and ending on June 30, 2011		101.250
Beginning on July 1, 2011 and ending on June 30, 2012		100.625
On July 1, 2012		100.000

We may redeem the Notes on or after July 6, 2008 and prior to July 1, 2010 only if the closing price of our common stock exceeds 130% of the then-current conversion price of the Notes for at least 20 trading days in a period of 30 consecutive trading days ending on the trading day prior to the date on which we provide notice of redemption. We may be required to repurchase the Notes upon a designated event (either a termination of trading or a change in control) at a price (which will be in cash or, in the case of a change in control, cash, shares of our common stock or a combination of both) equal to 100% of the principal amount of the Notes to be repurchased plus accrued interest. Upon a change in control, we may under certain circumstances be required to pay a premium on redemption which will be a number of additional shares of our common stock as determined by our stock price and the effective date of the change in control.

The Notes are subordinate in right of payment to all of our existing and future senior debt.

We incurred financing costs of approximately $3.1 million which are being amortized ratably over the seven year term of the Notes. For the years ended December 31, 2006 and 2007, we recorded approximately $3.6 million and $3.0 million, respectively, in interest expense associated with the Notes, net of capitalized interest of approximately $350,000 and $983,000, respectively.

EverQ Debt Guarantee

On April 30, 2007, we entered into a Guarantee and Undertaking Agreement with Q-Cells AG and Renewable Energy Corporation ASA in connection with EverQ entering into a loan agreement with a syndicate of lenders led by Deutsche Bank AG (the “Guarantee”). The loan agreement provides EverQ with aggregate borrowing availability of up to 142.0 million Euros. Pursuant to the Guarantee, we along with Q-Cells AG and Renewable Energy Corporation ASA, each agreed to guarantee a one-third portion of the loan outstanding, up to

44

30.0 million Euros of EverQ’s repayment obligations under the loan agreement. As of December 31, 2007, we have $41.0 million deposited with Deutsche Bank AG fulfilling our obligation under the Guarantee, which is classified as restricted cash in our balance sheet. Upon EverQ reaching certain milestones, expected to be achieved in the next 12 months, the guarantee will be cancelled. As of December 31, 2007, the total amount of debt outstanding under the loan agreement was 110.0 million Euros (approximately $160.6 million at December 31, 2007 exchange rates) of which 57.5 million Euros was current (approximately $84.0 million at December 31, 2007 exchange rates). Repayment of the loan is due in quarterly installments through September 30, 2010.

Evergreen Solar Loans to EverQ

In November 2005, we entered into a Shareholder Loan Agreement to provide EverQ with a loan totaling 8.0 million Euros. Under the terms of the Shareholder Loan Agreement, the loan carried a fixed interest rate of 5.4%, had a term of four years and was subordinated to all other outstanding debt of EverQ. In addition, during 2006 we provided EverQ with additional loans to help fund the initial financing requirement of the first two factories. In January 2007, we, REC and Q-Cells entered into a new shareholder loan agreement with EverQ. Under the terms of the shareholder loan agreement, EverQ repaid all outstanding shareholder loans, plus accrued interest, in exchange for a new shareholder loan of 30 million Euros from each shareholder. The table below summarizes the principal and terms of our share of this outstanding loan as of December 31, 2007:

Date of Loan	Principal (EUR)		Principal (USD)		Interest Rate			Date Due
January 25, 2007	€	30,000,000	$	43,809,000		5.43	%		December 31, 2009

We believe that our current cash, cash equivalents, marketable securities and access to the capital markets will be sufficient to fund our planned capital programs and to fund our operating expenditures over the next twelve months, including the completion of construction of Devens I in 2008 and the development of Devens II beginning in March of 2008. However, the net proceeds from our February 2008 public offering of common stock and cash on hand will not be sufficient to fully construct and equip Devens II and; therefore, we will need to secure additional financing to do so, and to secure raw materials or necessary technologies. We do not know whether we will be able to raise additional financing or whether we will be able to do so on terms favorable to us. If adequate funds are not available or are not available on acceptable terms, our ability to fund our operations, further develop and expand our manufacturing operations and distribution network, or otherwise respond to competitive pressures would be significantly limited.

Off-Balance Sheet Arrangements

We have routine operating leases associated with our Marlboro facilities. In addition, we have subordinated convertible notes which holders may convert into shares of our common stock at any time.

Contractual Obligations

The following table summarizes our contractual obligations as of December 31, 2007 and the effect such obligations are expected to have on our liquidity and cash flow in future periods (in thousands):

	Total		Less Than
	Years		1 Year		1-3 Years		4-5 Years		After 5 Years
Non-cancelable operating leases	$	4,384	$	1,425	$	2,602	$	357	$	—
Maturity of Convertible Debt		90,000		—		—		90,000		—
Interest expense associated with Convertible Debt		19,688		5,906		11,813		1,969		—
Capital expenditure obligations		111,166		111,166		—		—		—
Raw materials purchase commitments		629,492		45,290		194,827		177,022		212,353
Total contractual cash obligations	$	854,730	$	163,787	$	209,242	$	269,348	$	212,353

45

During 2007, we entered into four multi-year polysilicon supply agreements with various terms and conditions. Following is a brief summary of each of these agreements.

On April 17, 2007, we entered into a multi-year polysilicon supply agreement with DC Chemical Co., Ltd. (“DC Chemical”) under which DC Chemical will supply us with polysilicon at fixed prices beginning in late 2008 and continuing through 2014. Concurrent with the execution of the supply agreement, we entered into a stock purchase agreement (the “Purchase Agreement”) with DC Chemical pursuant to which DC Chemical purchased 3.0 million shares of our common stock for $12.07 per share, representing the closing price of our common stock on the Nasdaq Global Market on April 16, 2007. Pursuant to the Purchase Agreement, we issued an additional 4.5 million shares of transfer restricted common stock and 625 shares of transfer restricted preferred stock to DC Chemical. The preferred stock automatically converted into 6.25 million shares of transfer restricted common stock in May 2007 upon the termination of the applicable waiting period under the Hart Scott Rodino Antitrust Improvements Act of 1976, as amended. The restrictions on the common stock will lapse upon the delivery of specified quantities of polysilicon to us by DC Chemical. Issuance of the restricted shares represented a prepayment of inventory cost valued at approximately $119.9 million, based on the issuance date market price of our common stock adjusted for a discount to reflect the transfer restriction, and will be amortized as an additional cost of inventory as silicon is delivered by DC Chemical and utilized by us. When the transfer restriction on these shares lapse, we will record an additional cost of inventory equal to the value of the discount associated with the restriction at that time if the stock price on that date is higher than $12.07 which will be amortized as an incremental cost of inventory as silicon is delivered by DC Chemical and utilized by us. In January 2008 we entered into a second multi-year polysilicon supply agreement with DC Chemical which is further described in Recent Developments.

On July 24, 2007, we entered into a multi-year polysilicon supply agreement with Wacker Chemie AG (“Wacker”). This supply agreement provides the general terms and conditions pursuant to which Wacker will supply us with specified annual quantities of polysilicon at fixed prices beginning in 2010 and continuing through 2018. In connection with the agreement we made a payment of approximately 9.0 million Euros to Wacker.

On October 24, 2007, we entered into a multi-year polysilicon supply agreement with Nitol. This supply agreement provides the general terms and conditions pursuant to which Nitol will supply us with specified annual quantities of polysilicon at fixed prices beginning in 2009 and continuing through 2014. In connection with the agreement we made a $10.0 million prepayment to Nitol. An additional prepayment of $5.0 million will be required within 15 days of the completion of certain milestones which is expected to occur in the first half of 2008.

On December 7, 2007, we entered into a multi-year polysilicon supply agreement with Silpro. This supply agreement provides the general terms and conditions pursuant to which Silpro will supply us with specified annual quantities of polysilicon at fixed prices beginning in 2010 and continuing through 2019. In connection with the supply agreement, we agreed to loan Silpro 30 million Euros at an interest rate of 3.0% compounded annually. The initial 15.0 million euro installment of the loan was disbursed to Silpro in December 2007. The second 15.0 million euro installment of the loan will be disbursed to Silpro during the first quarter of 2008.

INCOME TAXES

As of December 31, 2007, we had federal and state net operating loss carryforwards of approximately $94.0 million and $60.8 million, respectively, available to reduce future taxable income which begin to expire in 2009 and 2008, respectively. In addition, we have excess tax deductions of approximately $18.7 million related to equity compensation for which the benefit, when realized, will be recognized in our financial statements when it results in a reduction of taxes payable with a corresponding credit to additional paid in capital income in accordance with SFAS 123R. We also has federal and state research and development tax credit carryforwards of approximately $2.0 million and $1.2 million, respectively, which begin to expire in 2010 and state Investment Tax Credit carryforwards of approximately $1.6 million which began to expire in 2008, available to reduce future tax liabilities.

46

We adopted the provisions of Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”) an interpretation of FASB Statement No. 109 (“SFAS 109”) on January 1, 2007. As a result of the implementation of FIN 48, there was no adjustment to accumulated deficit or the liability for uncertain tax positions. As of the adoption date of January 1, 2007 and at December 31, 2007, we had no accrued interest related to uncertain tax positions.

We have evaluated the positive and negative evidence bearing upon the realization of our deferred tax assets. We have considered our history of losses and, in accordance with the applicable accounting standards, have fully reserved the deferred tax asset.

RECENT ACCOUNTING PRONOUNCEMENTS

In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements”. This statement establishes a framework for measuring fair value in accordance with GAAP, clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. It also responds to investors’ requests for expanded information about the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value and the effect of fair value measurements on earnings. SFAS No. 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value, and does not expand the use of fair value in any new circumstances. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. In February 2008, the FASB issued a FASB Statement of Position that amends SFAS No. 157 to delay its effective date for all non-financial assets and liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis, to fiscal years beginning after November 15, 2008. We do not expect that the adoption of SFAS No. 157 will have a material impact on our financial statements.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities, including an amendment of SFAS No. 115”. This statement permits entities to choose to measure certain financial instruments and other items at fair value. This statement is expected to expand the use of fair value measurement, which is consistent with the FASB’s long-term measurement objectives for accounting for financial instruments. SFAS No. 159 is effective for the fiscal year beginning January 1, 2008. We do not expect that the adoption of SFAS No. 159 will have a material impact on our consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51”. This Statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008, which for us is the year ending December 31, 2009, and the interim periods within that fiscal year. The objective of this Statement is to improve the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements. We are currently evaluating the potential impact, if any, of the adoption of SFAS No. 160 on our consolidated financial statements.

In December 2007, the FASB issued SFAS 141(R) “Business Combinations”. This statement is effective for fiscal years, beginning on or after December 15, 2008, which for us is the year ending December 31, 2009. The objective of the statement is to establish principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquire. The statement also provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. We are currently evaluating the potential impact, if any, of the adoption of SFAS No. 141R on our consolidated financial statements.

47

ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATE RISK

We do not use derivative financial instruments to manage interest rate risk. Interest income earned on our cash, cash equivalents and marketable securities is subject to interest rate fluctuations, but we believe that the impact of these fluctuations will not have a material effect on our financial position due to the liquidity and short-term nature of these financial instruments. For these reasons, a hypothetical 100-basis point adverse change in interest rates would not have a material effect on our consolidated financial position, results of operations or cash flows.

FOREIGN CURRENCY EXCHANGE RATE RISK

For the year ended December 31, 2007, approximately 7% of our product revenues were denominated in Euros. As we expand our manufacturing operations and distribution network internationally, our exposure to fluctuations in currency exchange rates may increase. During 2007, we entered into multi-year polysilicon supply agreements with four suppliers. The agreements have varied start and end dates and two of these agreements are denominated in Euros. Additionally, from time to time we may agree to purchase equipment and other materials internationally with delivery dates as much as six to twelve months in the future. We endeavor to denominate the purchase price of this equipment and materials in United State dollars, but are not always successful in doing so. To the extent that such purchases are made in foreign currency, we will be exposed to currency gains or losses.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Our Financial Statements and related Notes and the Report of the Independent Registered Public Accounting Firm are included beginning on page F-1 of this Annual Report on Form 10-K.

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE:

None.

ITEM 9A.  CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2007. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of such date our disclosure controls and procedures were effective at the reasonable assurance level. In designing and evaluating our disclosure controls and procedures, we and our management recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its judgement in evaluating and implementing possible controls and procedures.

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

48

Internal Control Over Financial Reporting

During the fiscal quarter ended December 31, 2007, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of published financial statements.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control — Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2007.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and that the degree of compliance with the policies or procedures may deteriorate.

Our internal control over financial reporting as of December 31, 2007 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein.

ITEM 9B.   OTHER INFORMATION.

We expect to hold our 2008 Annual Meeting of Stockholders on or about June 4, 2008.

PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

Certain information required by this Item 10 relating to our directors, executive officers and corporate governance is incorporated by reference herein from our proxy statement in connection with our 2008 annual meeting of stockholders, which proxy statement will be filed with the SEC not later than 120 days after the close of our fiscal year ended December 31, 2007.

Our Board of Directors has adopted a Code of Business Conduct and Ethics (the “Code of Ethics”) for our Chief Executive Officer, Chief Financial Officer and all other members of management, all directors and all employees and agents of the Company. The Code of Ethics is intended to promote the highest standards of honest and ethical conduct throughout the Company, full, accurate and timely reporting, and compliance with law, among other things. A copy of the Code of Ethics is posted on our website at www.evergreensolar.com.

The Code of Ethics prohibits any waiver from the principles of the Code of Ethics without the prior written consent of our Board of Directors. To date, there have been no waivers under our Code of Ethics. We will post any waivers, if and when granted, of our Code of Ethics on our website at www.evergreensolar.com, in accordance with the rules of the Securities and Exchange Commission.

ITEM 11.   EXECUTIVE COMPENSATION.

Certain information required by this Item 11 relating to remuneration of directors and executive officers and other transactions involving management is incorporated by reference herein from our proxy statement in

49

connection with 2008 annual meeting of stockholders, which proxy statement will be filed with the SEC not later than 120 days after the close of our fiscal year ended December 31, 2007.

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

Certain information required by this Item 12 relating to security ownership of certain beneficial owners and management is incorporated by reference herein from our proxy statement in connection with our 2008 annual meeting of stockholders, which proxy statement will be filed with the SEC not later than 120 days after the close of our fiscal year ended December 31, 2007. For information on securities authorized for issuance under equity compensation plans, see the section entitled “Market for Registrant’s Common Equity and Related Stockholders Matters” in Part II, Item 5. in this Annual Report on Form 10-K.

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Certain information required by this Item 13 relating to certain relationships and related transactions, and director independence is incorporated by reference herein from our proxy statement in connection with our 2008 annual meeting of stockholders, which proxy statement will be filed with the SEC not later than 120 days after the close of our fiscal year ended December 31, 2007.

ITEM 14.   PRINCIPAL ACCOUNTING FEES AND SERVICES.

Certain information required by this Item 14 regarding principal accounting fees and services is incorporated by reference herein from our proxy statement in connection with our 2008 annual meeting of stockholders, which proxy statement will be filed with the SEC not later than 120 days after the close of our fiscal year ended December 31, 2007.

Schedules not listed above are omitted because they are not required or because the required information is given in the consolidated financial statements or notes thereto.

PART IV

ITEM 15.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

(a) The following documents are filed as part of this Annual Report on Form 10-K:

1. Financial Statements. The financial statements included in Item 8 of Part II which appear beginning on page F-1 of this Annual Report on Form 10-K.

2. Index to Financial Statements and Schedule. Certain financial statement schedules are omitted as the information is included in the Consolidated Financial Statements and notes thereto in Item 8 of Part II which appear beginning on page F-1 of this Annual Report on Form 10-K. Schedules not listed in the index are omitted because they are not required.

3. Exhibits. Exhibits are as set forth in the section entitled “Exhibit Index” which follows the section entitled “Signatures” in this Annual Report on Form 10-K. Exhibits which are incorporated herein by reference can be inspected and copied at the public reference rooms maintained by the SEC in Washington, D.C., New York, New York, and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. SEC filings are also available to the public from commercial document retrieval services and at the Web site maintained by the SEC at http://www.sec.gov.

(c) See Item 15(a)(2).

50

LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE

Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, 2006 and 2007	F-3
Consolidated Statements of Operations for the years ended December 31, 2005, 2006 and 2007	F-4
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2005, 2006 and 2007	F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2005, 2006 and 2007	F-6
Notes to Consolidated Financial Statements	F-7
Schedule I — Condensed Financial Information of the Registrant	F-32

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of

Evergreen Solar, Inc.:

In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of Evergreen Solar, Inc. and its subsidiaries at December 31, 2007 and 2006, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2007 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

As discussed in Note 7 to the consolidated financial statements, the Company changed the manner in which it accounts for share-based compensation.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

PricewaterhouseCoopers LLP

Boston, Massachusetts
February 27, 2008

F-2

EVERGREEN SOLAR, INC.

CONSOLIDATED BALANCE SHEETS

	December 31,
	2006			2007
	(In thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents	$	6,828		$	29,428
Marketable securities		42,593			70,275
Restricted cash		—			41,000
Accounts receivable, net of allowance for doubtful accounts of $100 and $85 at December 31, 2006 and December 31, 2007, respectively		20,249			9,297
Grants receivable		—			5,818
Inventory		4,767			8,094
VAT receivable, net		628			10,549
Other current assets		6,929			7,729
Total current assets		81,994			182,190
Investment in and advances to EverQ		70,460			87,894
Restricted cash		414			414
Deferred financing costs		2,434			1,991
Loan receivable from silicon supplier		—			21,904
Prepaid cost of inventory		—			143,035
Fixed assets, net		50,516			114,641
Other assets		1,433			1,186
Total assets	$	207,251		$	553,255
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	18,465		$	57,005
Other accrued expenses		2,443			5,408
Accrued employee compensation		2,791			4,875
Accrued interest		—			1,969
Accrued warranty		705			705
Total current liabilities		24,404			69,962
Subordinated convertible notes		90,000			90,000
Total liabilities		114,404			159,962
Commitments and Contingencies (Notes 11 and 14)
Stockholders’ equity:
Common stock, $0.01 par value, 150,000,000 shares authorized, 68,066,204 and 102,252,965 issued and outstanding at December 31, 2006 and December 31, 2007, respectively		681			1,023
Additional paid-in capital		211,053			521,695
Accumulated deficit		(119,678	)		(136,280	)
Accumulated other comprehensive income		791			6,855
Total stockholders’ equity		92,847			393,293
Total liabilities and stockholders’ equity	$	207,251		$	553,255

The accompanying notes are an integral part of these consolidated financial statements.

F-3

EVERGREEN SOLAR, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Years Ended December 31,
	2005			2006			2007
	(In thousands, except per share data)
Revenues:
Product	$	43,627		$	102,252		$	58,334
Royalty and fee		—			—			11,532
Total revenues		43,627			102,252			69,866
Cost of revenue		39,954			90,310			52,838
Gross profit		3,673			11,942			17,028
Operating expenses:
Research and development		10,622			18,390			20,594
Selling, general and administrative		12,708			21,890			20,608
Facility start-up		—			—			1,404
Loss on disposal of fixed assets		—			1,526			—
Total operating expenses		23,330			41,806			42,606
Operating loss		(19,657	)		(29,864	)		(25,578	)
Other income (expense):
Foreign exchange gains, net		5			3,322			444
Gain on investment in EverQ		527			—			—
Interest income		3,140			4,613			9,774
Interest expense		(2,526	)		(6,084	)		(3,412	)
Other income, net		1,146			1,851			6,806
Loss before minority interest and equity income		(18,511	)		(28,013	)		(18,772	)
Minority interest in EverQ		1,195			849			—
Equity income from interest in EverQ		—			495			2,170
Net loss	$	(17,316	)	$	(26,669	)	$	(16,602	)
Net loss per share (basic and diluted)	$	(0.29	)	$	(0.41	)	$	(0.19	)
Weighted average shares used in computing basic and diluted net loss per share		59,631			65,662			86,799

The accompanying notes are an integral part of these consolidated financial statements.

F-4

EVERGREEN SOLAR, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

														Accumulated
					Additional									Other			Total
	Common Stock				Paid-In			Deferred			Accumulated			Comprehensive			Stockholders’			Comprehensive
	Shares		Amount		Capital			Compensation			Deficit			Income (Loss)			Equity			Loss
	(In thousands)
Balance at January 1, 2005		47,542	$	475	$	116,764		$	—		$	(75,693	)	$	(26	)	$	41,520
Issuance of common stock pursuant to exercise of options		750		8		1,709												1,717
Issuance of common stock pursuant to exercise of warrants		224		2		606												608
Shares of common stock issued under ESPP		3				23												23
Restricted stock grant		100		1		1,042			(1,043	)								—
Compensation expense associated with restricted stock									7									7
Issuance of common stock in connection with private equity financing, net of offering costs		13,346		134		62,201												62,335
Comprehensive loss:
Net loss												(17,316	)					(17,316	)	$	(17,316	)
Unrealized losses on marketable securities															(43	)		(43	)		(43	)
Foreign currency translation adjustment															(1,401	)		(1,401	)		(1,401	)
Comprehensive loss																				$	(18,760	)
Balance at December 31, 2005		61,965		620		182,345			(1,036	)		(93,009	)		(1,470	)		87,450
Issuance of common stock pursuant to exercise of options		988		10		2,480												2,490
Issuance of common stock pursuant to exercise of warrants		4,007		40		13,406												13,446
Shares of common stock issued under ESPP		45		—		341												341
Reclassification on adoption of SFAS No. 123R						(1,036	)		1,036									—
Gain on investment in EverQ by REC and Q-Cells						8,466												8,466
Compensation expense associated with equity compensation plans, including restricted share grants		1,061		11		5,051												5,062
Comprehensive loss:																		—
Net loss												(26,669	)					(26,669	)	$	(26,669	)
Unrealized gains on marketable securities															71			71			71
Foreign currency translation adjustment															2,190			2,190			2,190
Comprehensive loss																				$	(24,408	)
Balance at December 31, 2006		68,066		681		211,053			—			(119,678	)		791			92,847
Issuance of common stock pursuant to exercise of options		1,031		10		3,289												3,299
Issuance of common stock pursuant to exercise of warrants		256		3		664												667
Shares of common stock issued under ESPP		59		1		426												427
Issuance of common stock in connection DC Chemical Agreement		3,000		30		36,180												36,210
Issuance of restricted stock in connection DC Chemical Agreement		10,750		107		119,914												120,021
Issuance of common stock in connection with public offering, net of offering costs		17,250		173		134,254												134,427
Compensation expense associated with equity compensation plans, including restricted share grants		1,841		18		6,389												6,407
Gain on investment in EverQ by REC and Q-Cells						9,526												9,526
Comprehensive loss:
Net loss												(16,602	)					(16,602	)	$	(16,602	)
Unrealized gains on marketable securities															59			59			59
Foreign currency translation adjustment															6,005			6,005			6,005
Comprehensive loss																				$	(10,538	)
Balance at December 31, 2007		102,253	$	1,023	$	521,695		$	—		$	(136,280	)	$	6,855		$	393,293

The accompanying notes are an integral part of these consolidated financial statements.

F-5

EVERGREEN SOLAR, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Years Ended December 31,
	2005			2006			2007
	(In thousands)
Cash flows from operating activities:
Net loss	$	(17,316	)	$	(26,669	)	$	(16,602	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense		4,134			9,311			7,418
Amortization of deferred grant credits		—			(2,004	)		—
Loss on disposal of fixed assets		56			2,383			—
Minority interest in EverQ		(1,195	)		(849	)		—
Equity income from EverQ		—			(495	)		(2,170	)
Amortization of deferred debt financing costs		224			443			444
Bad debt expense and provision for early payment discounts		(19	)		85			(1	)
Accretion of bond discount		(595	)		(955	)		(1,210	)
Compensation expense associated with employee equity awards		7			5,062			6,382
Gain on investment in EverQ		(527	)		—			—
Changes in operating assets and liabilities:
Accounts receivable		2,062			(12,415	)		10,952
Grants receivable		—			18,962			—
Inventory		(729	)		(10,958	)		(3,327	)
Prepaid cost of inventory		—			—			(23,121	)
Interest receivable		(484	)		(134	)		13
Other current assets		(2,685	)		(6,652	)		(10,687	)
Accounts payable		9,317			(728	)		16,588
Accrued expenses		927			15,285			1,872
Interest payable		—			—			1,352
Deferred revenue		(440	)		—			—
Other		—			—			101
Net cash used in operating activities		(7,263	)		(10,328	)		(11,996	)
Cash flows from investing activities:
Purchases of fixed assets, deposits on fixed assets under construction		(57,729	)		(107,667	)		(50,744	)
Decrease in cash related to conversion of EverQ consolidated entity to equity method affiliate		—			(22,274	)		—
Decrease (increase) in restricted cash		(1,194	)		891			(41,000	)
Decrease in EverQ loan		—			(389	)		—
Increase in other loans		—			—			(22,386	)
Purchases of marketable securities		(119,300	)		(63,290	)		(108,386	)
Proceeds from sale and maturity of marketable securities		40,950			107,186			81,975
Net cash used in investing activities		(137,273	)		(85,543	)		(140,541	)
Cash flows from financing activities:
Proceeds from issuances of common stock, net of offering costs		62,335			—			170,637
Proceeds from issuance of DC Chemical restricted shares		—			—			107
Proceeds from convertible debt financing, net of offering costs		86,899			—			—
Increase in EverQ debt		7,687			58,708			—
Capital contributions to EverQ from minority interest holder		9,331			—			—
Proceeds from the sale of EverQ interest to REC		4,060			—			—
Decrease in short-term debt		(1,500	)		—			—
Proceeds from exercise of stock options and warrants, and shares purchased under Employee Stock Purchase Plan		2,348			16,277			4,393
Net cash flow provided by financing activities		171,160			74,985			175,137
Effect of exchange rate changes on cash and cash equivalents		(1,261	)		(3,028	)		—
Net increase (decrease) in cash and cash equivalents		25,363			(23,914	)		22,600
Cash and cash equivalents at beginning of year		5,379			30,742			6,828
Cash and cash equivalents at end of year	$	30,742		$	6,828		$	29,428
Supplemental cash flow information:
Interest paid		2,526			5,201			986
Gain on investment in EverQ by Q-Cells and REC		—			8,466			9,526
Common stock issued for prepaid inventory		—			—			119,914

The accompanying notes are an integral part of these consolidated financial statements.

F-6

EVERGREEN SOLAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   NATURE OF BUSINESS

Evergreen Solar, Inc. (the “Company”), incorporated in August 1994, develops, manufactures and markets solar power products, including solar cells, panels and systems. In April 1997, the Company commenced product sales. The Company has incurred losses since inception and has an accumulated deficit. The Company has historically financed its operations and met its capital expenditure requirements primarily through sales of its capital stock, issuance of debt and, to a lesser extent, product revenues

In January 2005, the Company entered into a strategic partnership agreement with Q-Cells AG (“Q-Cells”). The agreement provided for the organization and capitalization of EverQ GmbH (“EverQ”), which is a limited liability company incorporated under the laws of Germany. In November 2005, Q-Cells and the Company entered into an agreement with Renewable Energy Corporation ASA (“REC”), whereby REC acquired from the Company and Q-Cells for 4.7 million Euros, a 15% ownership position in EverQ. REC obtained 11.1% of the outstanding equity of EverQ directly from the Company and 3.9% of the outstanding equity of EverQ directly from Q-Cells. The Company received $4.1 million from REC which resulted in a gain on the sale of EverQ interest of $527,000. In December 2006, REC and Q-Cells purchased additional shares of EverQ, which resulted in a reduction in the Company’s ownership interest in EverQ to one-third and an associated gain on an increase of the Company’s carrying value of its interest in EverQ’s net assets of approximately $8.5 million. In connection with the December 2006 transaction, REC and Q-Cells made an additional capital contribution of approximately 19.6 million Euros in December 2007 resulting in a gain of approximately $9.5 million to the Company. Both the $8.5 million gain and the $9.5 million gain are recorded as adjustments to additional paid-in capital. As a result of the December 2006 purchase, the Company, REC and Q-Cells each have equal ownership in EverQ. The purpose of EverQ is to operate facilities to manufacture, market and sell solar products based on the Company’s proprietary String Ribbon technology. EverQ has accelerated the availability of wafer, cell and panel manufacturing capacity based on String Ribbon technology and provided the Company with greater access to the European Union solar market.

The Company markets and sells all solar panels manufactured by EverQ under the Evergreen Solar brand, as well as manages customer relationships and contracts. The Company receives fees from EverQ and does not report gross revenue or cost of goods sold resulting from the sale of EverQ’s solar panels. The Company currently receives a fee of 1.7% of gross EverQ revenue. In addition, the Company receives royalty payments for its ongoing technology contributions to EverQ.

In September 2007, the Company began constructing its own manufacturing facility in Devens, Massachusetts. The Company expects to begin production of solar panels at the Devens facility upon completion of phase I of its development (“Devens I”), which is scheduled to occur in mid-2008. Upon reaching full production capacity, which the Company expects to take place in early 2009, Devens I is expected to increase the Company’s current manufacturing capacity of 15 MW by approximately 80 MW. In addition, by March of 2008 the Company expects to substantially complete the planning and permitting and begin construction of phase II of the Devens facility (“Devens II”), which will add a second production line to the facility. Upon reaching full production capacity, which the Company expects to occur in late 2009, Devens II should increase our production capacity at the Devens facility to approximately 160 MW.

In connection with the Company’s manufacturing expansion plans, it has entered into multi-year polysilicon supply agreements with DC Chemical Co., Ltd. (“DC Chemical”), Wacker Chemie AG (“Wacker”), Solaricos Trading, LTD (“Nitol”) and Silicium de Provence S.A.S. (“Silpro”). The Company has silicon under contract to have annual production of approximately 125 MW in 2009, 300 MW in 2010, 600 MW in 2011 and 850 MW in 2012, and plans to expand its manufacturing operations accordingly.

In October 2007, EverQ agreed to license our new wafer furnace technology, the quad ribbon wafer furnace, and the Company and its two EverQ partners approved the construction of EverQ’s third manufacturing facility, EverQ 3, in Thalheim, Germany, which is expected to increase EverQ’s annual production capacity

F-7

EVERGREEN SOLAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

from approximately 100 MW to approximately 180 MW by the second half of 2009. EverQ agreed to pay the Company a market-based royalty based on actual cost savings realized using the quad ribbon furnaces in EverQ 3 as compared to the Company’s current dual ribbon furnaces, which are in use at EverQ’s two current facilities. The Company and its partners have also agreed to pursue an initial public offering, of EverQ’s stock and expand EverQ’s annual production capacity to approximately 600 MW by 2012. Provided that EverQ becomes publicly traded prior to December 31, 2009, REC has offered EverQ an additional supply agreement for polysilicon to support this planned capacity expansion.

The Company believes that its current cash, cash equivalents, marketable securities, coupled with its ability to access the equity and debt capital markets and borrowings available under its line of credit facility, will be sufficient to fund the Company’s planned capital expenditure programs, including the planned Massachusetts expansion, current commitments with EverQ and operating expenditures over the next twelve months. The Company will be required to raise additional capital to fund the completion of the second phase of the development of its manufacturing facility in Devens, Massachusetts, to provide further funding for EverQ, if any is needed, to secure silicon beyond current contracts and other raw materials and/or necessary technologies. The Company does not know whether it will be able to raise additional capital on favorable terms or at all. If adequate capital is not available or are not available on acceptable terms, the Company’s ability to fund its operations, further develop and expand its manufacturing operations and distribution network, or otherwise respond to competitive pressures would be significantly limited.

The Company is subject to risks common to companies in the high technology and energy industries including, but not limited to, development by the Company or its competitors of new technological innovations, dependence on key personnel, dependence on key or sole source suppliers for materials, protection of proprietary technology and compliance with government regulations. Any delay in the Company’s plan to scale its capacity may result in increased costs and could impair business operations.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the major accounting policies followed by the Company in the preparation of the accompanying financial statements is set forth below.

BASIS OF PRESENTATION

The consolidated financial statements include the accounts of the Company’s wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated. Through December 19, 2006, the Company owned 64% of EverQ GmbH (“EverQ”), a joint venture created to develop and operate facilities in Germany, and consolidated the financial statements of EverQ in accordance with the provisions of Financial Accounting Standards Board (FASB) FIN 46(R), “Consolidation of Variable Interest Entities, an interpretation of ARB No. 51.” As a result of the Company’s reduction in ownership in EverQ to one-third on December 19, 2006, the Company has applied the equity method of accounting for its share of EverQ’s operating results from December 20, 2006 forward in accordance with APB 18 “Equity Method of Accounting for Investments in Common Stock.” Therefore, the Company’s Consolidated Statements of Operations and of Cash Flows include the consolidated results of operations of EverQ through December 19, 2006 and the Company’s one-third share of EverQ net income for the period December 20, 2006 through December 31, 2006 and the year ended December 31, 2007. The Company’s Consolidated Balance Sheets at December 31, 2006 and December 31, 2007 include the Company’s investment in EverQ as a single line item. The functional currency for Evergreen Solar GmbH, a wholly owned subsidiary of Evergreen Solar, and EverQ is the Euro. Revenues and expenses of Evergreen Solar GmbH and EverQ are translated into U.S. dollars at the average rates of exchange during the period, and assets and liabilities are translated into U.S. dollars at the period-end rate of exchange.

Certain prior year balances have been reclassified to conform to the current year presentation.

F-8

EVERGREEN SOLAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

CASH AND MARKETABLE SECURITIES

Cash and cash equivalents consist of cash and highly liquid investments with maturities of three months or less from the date of purchase and whose carrying amount approximates fair value.

The Company’s marketable securities are classified as available-for-sale. At December 31, 2006 and 2007, the Company primarily held commercial paper and corporate bonds. All commercial paper is rated A-1/P-1 or higher, corporate bonds A/A2 or higher, and asset backed securities AAA/Aaa. The investments are carried at market value. At December 31, 2006 and 2007, there were unrealized gains of $0 and $59,000, respectively, which are reported as part of stockholders’ equity.

The following table summarizes the Company’s cash, cash equivalents and marketable securities by type as of December 31, (in thousands):

	2006		2007
Cash	$	3,316	$	23,362
Money market funds		3,512		1,908
Certificates of deposits		—		1,161
Commercial paper		—		2,997
Subtotal cash and cash equivalents		6,828		29,428
Certificates of deposits		5,498		—
Asset backed securities		—		2,982
Commercial paper		3,981		41,490
Corporate bonds		33,114		25,803
Subtotal marketable securities		42,593		70,275
Total cash, cash equivalents and marketable securities	$	49,421	$	99,703

CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, investments and accounts receivable. The Company places its cash and cash equivalents and foreign exchange contracts, when applicable, with high quality financial institutions. With respect to accounts receivable, such receivables are primarily from distributors and integrators in the solar power industry located throughout the world. The Company performs ongoing credit evaluations of its customers’ financial conditions. The Company generally does not require collateral or other security against accounts receivable; however, it maintains reserves for potential credit losses and such losses have historically been within management’s expectations.

F-9

EVERGREEN SOLAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The table below summarizes the Company’s concentration of accounts receivable for the years ended December 31, 2005, 2006 and 2007:

	2005			2006			2007
% of accounts receivable
Donauer Solartechnik		15	%		14	%		—
NVT, LLC		—			33	%		—
PowerLight Corporation		—			15	%		27	%
AEE Solar		—			11	%		4	%
Sun Farms		23	%		—			—
Krannich Solartechnik		8	%		—			—
EWS GmbH & Co. KG		—			8	%		10	%
Targray		—			—			13	%
Top 5 customers		64	%		81	%		67	%

INVENTORY

Inventory is valued at standard cost which approximates the lower of cost or market determined on a first-in, first-out basis. Certain factors may impact the realizable value of the Company’s inventory including, but not limited to, technological changes, market demand, changes in product mix strategy, new product introductions and significant changes to its cost structure. Estimates of reserves are made for obsolescence based on the current product mix on hand and its expected net realizable value. If actual market conditions are less favorable or other factors arise that are significantly different than those anticipated by management, additional inventory write-downs or increases in obsolescence reserves may be required. The Company treats lower of cost or market adjustments and inventory reserves as an adjustment to the cost basis of the underlying inventory. Accordingly, favorable changes in market conditions are not recorded to inventory in subsequent periods.

During 2007, the Company entered into multi-year polysilicon supply agreements with several suppliers, most of which required a prepayment under the contract. These prepayments are not refundable and would be difficult to recover if a supplier defaults on its obligations. These prepayments are included in the balance sheet in Prepaid Cost of Inventory.

GUARANTOR ARRANGEMENTS

The following is a summary of the Company’s agreements that are within the scope of FASB Interpretation No. 45 “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others.”

Product Warranty

The Company’s current standard product warranty includes a two-year warranty period for defects in material and workmanship and a 25-year warranty period for declines in power performance. The Company has provided for estimated future warranty costs of $705,000, representing its best estimate of the likely expense associated with fulfilling its obligations under such warranties. The Company engages in product quality programs and processes, including monitoring and evaluating the quality of component suppliers, in an effort to ensure the quality of its product and reduce its warranty exposure. The Company’s warranty obligation will be affected not only by its product failure rates, but also the costs to repair or replace failed products and potential service and delivery costs incurred in correcting a product failure. If the Company’s

F-10

EVERGREEN SOLAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

actual product failure rates, repair or replacement costs, or service or delivery costs differ from these estimates, accrued warranty costs would be adjusted in the period that such events or costs become known.

Indemnification Agreements

The Company enters into standard indemnification agreements in its ordinary course of business. Pursuant to these agreements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company’s business partners, customers, directors and officers. The term of these indemnification agreements is generally perpetual. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited. However, the Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. The Company believes the estimated fair value of such agreements is minimal.

EverQ Debt Guarantee

On April 30, 2007, the Company, Q-Cells AG and Renewable Energy Corporation ASA entered into a Guarantee and Undertaking Agreement in connection with EverQ entering into a loan agreement with a syndicate of lenders led by Deutsche Bank AG (the “Guarantee”). The loan agreement provides EverQ with aggregate borrowing availability of up to 142.0 million Euros. Pursuant to the Guarantee, the Company, Q-Cells AG and Renewable Energy Corporation ASA each agreed to guarantee a one-third portion of the loan outstanding, up to 30.0 million Euros of EverQ’s repayment obligations under the loan agreement. As of December 31, 2007, the Company has $41.0 million deposited with Deutsche Bank AG fulfilling its obligation under the Guarantee, which is classified as restricted cash in the Company’s balance sheet. Upon EverQ reaching certain milestones, expected to be achieved during 2008, the guarantee will be cancelled. As of December 31, 2007, the total amount of debt outstanding under the loan agreement was 110.0 million Euros (approximately $160.6 million at December 31, 2007 exchange rates) of which 57.5 million Euros was current (approximately $84.0 million at December 31, 2007 exchange rates). Repayment of the loan is due in quarterly installments through September 30, 2010.

Letters of Credit

The Company maintains a letter of credit for the benefit of a landlord of its manufacturing facility in Marlboro, Massachusetts for $414,000, which is required under the terms of the lease and will expire upon termination of the lease in 2010. The amount of cash guaranteeing the letter of credit is classified as restricted cash in the Company’s balance sheet. The company has an additional letter of credit for $300,000 as guarantee of payment for certain equipment.

FIXED ASSETS

Fixed assets are recorded at cost. As part of the cost of acquiring certain assets and getting them ready for use, the Company capitalizes a portion of its interest costs. Provisions for depreciation are based on their estimated useful lives using the straight-line method over three to seven years for all laboratory and manufacturing equipment, computers, and office equipment. Leasehold improvements are depreciated over the shorter of the remainder of the lease’s term or the estimated life of the improvements. The costs for constructing assets are recorded in assets under construction and are depreciated from the date these assets are put to use. Upon retirement or disposal, the cost of the asset disposed of and the related accumulated depreciation are removed from the accounts and any gain or loss is reflected in net income or loss.

Expenditures for repairs and maintenance are expensed as incurred.

F-11

EVERGREEN SOLAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

IMPAIRMENT OF LONG-LIVED ASSETS

The Company’s policy regarding long-lived assets is to evaluate the recoverability or usefulness of these assets when the facts and circumstances suggest that these assets may be impaired. This analysis relies on a number of factors, including changes in strategic direction, business plans, regulatory developments, economic and budget projections, technological improvements, and operating results. The test of recoverability or usefulness is a comparison of the asset value to the undiscounted cash flow of its expected cumulative net operating cash flow over the asset’s remaining useful life. If such a test indicates that impairment is required, then the asset is written down to its estimated fair value. Any write-downs would be treated as permanent reductions in the carrying amounts of the assets and an operating loss would be recognized. To date, the Company has had recurring operating losses and the recoverability of its long-lived assets is contingent upon executing its business plan that includes further reducing its manufacturing costs and significantly increasing sales. If the Company is unable to execute its business plan, the Company may be required to write down the value of its long-lived assets in future periods. No impairments were required to be recognized during the years ended December 31, 2005, 2006 and 2007 for long-lived assets.

REVENUE RECOGNITION

The Company recognizes product revenue if there is persuasive evidence of an agreement with the customer, shipment has occurred, risk of loss has transferred to the customer, the sales price is fixed or determinable, and collectability is reasonably assured. The market for solar power products is emerging and rapidly evolving. The Company currently sells its solar power products primarily to distributors, system integrators and other value-added resellers within and outside of North America, who typically resell these products to end users throughout the world. For new customers requesting credit, the Company evaluates creditworthiness based on credit applications, feedback from provided references, and credit reports from independent agencies. For existing customers, the Company evaluates creditworthiness based on payment history and known changes in their financial condition. Royalty and fee revenue are recognized at contractual rates upon shipment of product by EverQ.

The Company also evaluates the facts and circumstances related to each sales transaction and considers whether risk of loss has passed to the customer upon shipment. The Company considers whether its customer is purchasing its product for stock, and whether contractual or implied rights to return the product exist or whether its customer has an end user contractually committed. The Company has not offered rights to return its products other than for normal warranty conditions and has had no history of product returns.

The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. If the financial condition of the Company’s customers were to deteriorate, such that their ability to make payments was impaired, additional allowances could be required.

RESEARCH AND DEVELOPMENT

Research and development costs are expensed as incurred.

INCOME TAXES

The Company accounts for income taxes under the liability method, which requires recognition of deferred tax assets, subject to valuation allowances, and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting and income tax purposes. A valuation allowance is established if it is more likely than not that all or a portion of the net deferred tax assets will not be realized.

F-12

EVERGREEN SOLAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

VALUE-ADDED TAXES

The Company accounts for value-added taxes on a net basis which excludes the amounts from revenues and costs. Value-added tax receivables and payables are presented net on the balance sheet.

COMPREHENSIVE LOSS

Comprehensive loss consists of unrealized gains and losses on available-for-sale securities and cumulative foreign currency translation adjustments. Other comprehensive income or loss is reflected in the Consolidated Statement of Stockholder’s Equity.

STOCK-BASED COMPENSATION

On January 1, 2006, the Company adopted the provisions of Statement of Financial Accounting Standards No. 123 — revised 2004, “Share-Based Payment” and related interpretations (“SFAS 123R”). SFAS 123R requires entities to measure compensation cost arising from the grant of share-based payments to employees at fair value and to recognize such cost in income over the period during which the employee is required to provide service in exchange for the award, usually the vesting period. The Company selected the modified prospective method for implementing SFAS 123R and began applying the provisions to stock-based awards granted on or after January 1, 2006, plus any unvested awards granted prior to January 1, 2006. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the awards’ service periods, which are the vesting periods, less estimated forfeitures. Estimated compensation for grants that were outstanding as of the effective date is recognized over the remaining service period using the compensation cost estimated for the SFAS 123R pro forma disclosures for prior periods. See Note 7 for further information regarding the Company’s stock-based compensation assumptions and expenses, including pro forma disclosures for prior periods as if the Company had recorded stock-based compensation expense in accordance with SFAS 123R. For the year ended December 31, 2005, the Company had previously adopted the provisions of Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation,” (“SFAS 123”), as amended by SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure” through disclosure only and accounted for its stock-based employee compensation plans under APB Opinion No. 25. Accordingly, no compensation cost was recorded as all options granted had an exercise price at least equal to the fair market value of the underlying common stock on the date of the grant.

NET LOSS PER COMMON SHARE

The Company computes net loss per common share in accordance with SFAS No. 128, “Earnings Per Share” (“SFAS 128”), and SEC Staff Accounting Bulletin No. 98 (“SAB 98”). Under the provisions of SFAS 128 and SAB 98, basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. The calculation of diluted net loss per common share for the years ended December 31, 2005, 2006 and 2007 does not include approximately 22.9 million, 19.4 million and 19.7 million potential shares of common stock equivalents outstanding at December 31, 2005, 2006 and 2007, respectively, as their inclusion would be antidilutive. Common stock equivalents include outstanding common stock options, unvested restricted stock awards, common stock warrants and convertible debt.

SEGMENT REPORTING

Statement of Financial Accounting Standards No. 131, “Disclosures about Segments of an Enterprise and Related Information” (“SFAS No. 131”), establishes standards for reporting information about operating segments. The information in this report is provided in accordance with the requirements of SFAS No. 131 and is consistent with how business results are reported internally to management.

F-13

EVERGREEN SOLAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company currently operates as one segment. For the year ended December 31, 2006, the Company had two reportable operating segments: Evergreen Solar, Inc. and EverQ GmbH. The chief operating decision maker evaluated performance based on a number of factors, the primary measure being product revenue and gross profit. Information on segment assets was not disclosed as it was not reviewed by the chief operating decision maker.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted accounting principals requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Company bases its estimates on historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Estimates are used when accounting for the collectability of receivables, realizability of finished goods inventory, estimated warranty costs, and deferred tax assets. Provisions for depreciation are based on their estimated useful lives using the straight-line method over three to seven years for all laboratory and manufacturing equipment, computers, and office equipment. Leasehold improvements are depreciated over the shorter of the remainder of the lease’s term or the life of the improvements. Some of these estimates can be subjective and complex and, consequently, actual results may differ from these estimates under different assumptions or conditions. While for any given estimate or assumption made by the Company’s management there may be other estimates or assumptions that are reasonable, the Company believes that, given the current facts and circumstances, it is unlikely that applying any such other reasonable estimate or assumption would materially impact the financial statements.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Financial instruments, including cash equivalents, marketable securities, accounts receivable and accounts payable are carried in the consolidated financial statements at amounts that approximate fair value at December 31, 2006 and 2007. Fair values are based on market prices and assumptions concerning the amount and timing of estimated future cash flows and assumed discount rates, reflecting varying degrees of perceived risk.

RECENT ACCOUNTING PRONOUNCEMENTS

In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements”. This statement establishes a framework for measuring fair value in accordance with GAAP, clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. It also responds to investors’ requests for expanded information about the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value and the effect of fair value measurements on earnings. SFAS No. 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value, and does not expand the use of fair value in any new circumstances. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. In February 2008, the FASB issued a FASB Statement of Position that amends SFAS No. 157 to delay its effective date for all non-financial assets and liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis, to fiscal years beginning after November 15, 2008. We do not expect that the adoption of SFAS No. 157 will have a material impact on our financial statements.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities, including an amendment of SFAS No. 115”. This statement permits entities to choose to

F-14

EVERGREEN SOLAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

measure certain financial instruments and other items at fair value. This statement is expected to expand the use of fair value measurement, which is consistent with the FASB’s long-term measurement objectives for accounting for financial instruments. SFAS No. 159 is effective for the fiscal year beginning January 1, 2008. We do not expect that the adoption of SFAS No. 159 will have a material impact on our consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51”. This Statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008, which for us is the year ending December 31, 2009, and the interim periods within that fiscal year. The objective of this Statement is to improve the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements. We are currently evaluating the potential impact, if any, of the adoption of SFAS No. 160 on our consolidated financial statements.

In December 2007, the FASB issued SFAS 141(R) “Business Combinations”. This statement is effective for fiscal years, beginning on or after December 15, 2008, which for us is the year ending December 31, 2009. The objective of the statement is to establish principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquire. The statement also provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. We are currently evaluating the potential impact, if any, of the adoption of SFAS No. 141R on our consolidated financial statements.

3.   INVENTORY

Inventory consisted of the following (in thousands):

	December 31,
	2006		2007
Raw materials	$	3,714	$	6,468
Work-in-process		804		1,014
Finished goods		249		612
	$	4,767	$	8,094

During 2007, the Company entered into multiple multi-year polysilicon supply agreements, several of which required advanced funding under the contract:

On April 17, 2007, the Company entered into a multi-year polysilicon supply agreement with DC Chemical Co., Ltd. (“DC Chemical”) under which DC Chemical will supply the Company with polysilicon at fixed prices beginning in late 2008 and continuing through 2014. In conjunction with this agreement, the Company issued 10,750,000 shares of transfer restricted common stock to DC Chemical. The restrictions on the common stock will lapse upon the delivery of 500 metric tons of polysilicon to the Company by DC Chemical. Issuance of the restricted shares represented a prepayment of inventory cost valued at approximately $119.9 million.

On July 24, 2007, the Company entered into a multi-year polysilicon supply agreement with Wacker Chemie AG (“Wacker”). This supply agreement provides the general terms and conditions pursuant to which Wacker will supply the Company with specified annual quantities of polysilicon at fixed prices beginning in 2010 and continuing through 2018. In connection with the agreement the Company made a payment of approximately 9.0 million Euros to Wacker (approximately $13.1 million at December 31, 2007 exchange rates).

F-15

EVERGREEN SOLAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

On October 24, 2007, the Company entered into a multi-year polysilicon supply agreement with Solaricos Trading, LTD. (“Nitol”). This supply agreement provides the general terms and conditions pursuant to which Nitol will supply the Company with specified annual quantities of polysilicon at fixed prices beginning in 2009 and continuing through 2014. In connection with the agreement the Company made a $10.0 million prepayment to Nitol. An additional prepayment of $5.0 million will be required within 15 days of the completion of certain milestones which is expected to occur in the first half of 2008.

The above prepayments, which are non-refundable, are presented on the balance sheet in Prepaid Cost of Inventory and will be amortized as an additional cost of inventory as silicon is delivered and utilized by the Company.

On December 7, 2007, the Company entered into a multi-year polysilicon supply agreement with Silicium de Provence S.A.S (“Silpro”). This supply agreement provides the general terms and conditions pursuant to which Silpro will supply the Company with specified annual quantities of polysilicon at fixed prices beginning in 2010 and continuing through 2019. In connection with the supply agreement, the Company agreed to loan Silpro 30 million Euros (approximately $43.8 million at December 31, 2007 exchange rates) at an interest rate of 3.0% compounded annually. The difference between this rate and prevailing market rates will be treated as an adjustment to the cost of inventory. The initial 15.0 million Euro installment of the loan was disbursed to Silpro in December 2007 (approximately $21.9 million at December 31, 2007 exchange rates). The second 15.0 million Euro installment of the loan will be disbursed to Silpro by January 31, 2008. This loan is presented on the balance sheet as loan receivable from silicon supplier.

4.   FIXED ASSETS

Fixed assets consisted of the following at December 31, 2006 and 2007 (in thousands):

	Useful
	Life	2006			2007
Laboratory and manufacturing equipment	3-7 years	$	36,544		$	53,323
Computer and office equipment	3-7 years		910			1,320
Leasehold improvements	Lesser of 15 to 20 years or lease term		8,360			13,592
Assets under construction			18,002			67,125
			63,816			135,360
Less: Accumulated depreciation			(13,300	)		(20,719	)
		$	50,516		$	114,641

As of December 31, 2007, The Commonwealth of Massachusetts support program had awarded the Company $20.0 million in grants towards the construction of its Devens, Massachusetts manufacturing facility, of which approximately $5.8 million has been earned. This amount has been capitalized as a reduction of the construction costs all of which are included in assets under construction. The funds granted are subject to repayment by the Company if, among other conditions, the Devens manufacturing facility does not create and maintain 350 new jobs in Massachusetts through November 20, 2014. The repayment of the grants, if any, will be proportional to the targeted number of jobs that are not created. As the Company has the ability and intent to satisfy the obligations under the awards, the grant monies received will be amortized over the same period as the underlying assets to which they relate.

Depreciation expense for the years ended December 31, 2005, 2006 and 2007 was $4.1 million, $9.3 million and $7.4 million, respectively. During 2006, as a result of the Company’s successful introduction of new manufacturing technology, the Company disposed of several pieces of existing equipment in order to

F-16

EVERGREEN SOLAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

replace them with more technologically advanced equipment expected to improve operational performance at its Marlboro facility. Equipment with a net book value of $2.4 million was disposed.

As of December 31, 2007, the Company had outstanding commitments for capital expenditures of approximately $111.2 million, primarily for the construction and equipment for its new Devens facility and equipment for its Marlboro facility.

5.   INCOME TAXES

Income taxes computed using the federal statutory income tax rate differ from the Company’s effective tax rate primarily due to the following for the years ended December 31(in thousands):

	2005			2006			2007
Income tax benefit at US federal statutory tax rate	$	(5,904	)	$	(9,068	)	$	(5,696	)
State income taxes, net of federal tax effect		(1,363	)		(1,844	)		(1,160	)
Permanent items		64			1,409			1,188
Other		(347	)		(724	)		(207	)
Change in deferred tax asset valuation allowance		7,550			10,227			5,875
	$	—		$	—		$	—

As of December 31, 2007, the Company had federal and state net operating loss carryforwards of approximately $94.0 million and $60.8 million, respectively, available to reduce future taxable income which begin to expire in 2009 and 2008, respectively. In addition, the Company has excess tax deductions related to equity compensation of $18.7 million of which the benefit will be realized when it results in a reduction of taxable income in accordance with SFAS 123R. The Company also had federal and state research and development tax credit carryforwards of approximately $2.0 million and $1.2 million, respectively, which begin to expire in 2010 and state Investment Tax Credit carryforwards of approximately $1.6 million which began to expire in 2008, available to reduce future tax liabilities. Of the Company’s valuation allowance, $6.4 million will be credited to additional paid-in capital when and if reversed.

Since the Company’s formation, the Company has raised capital through the issuance of capital stock on several occasions, as well as transfers of common stock, which resulted in changes of control, as defined by Section 382 of the Internal Revenue Code. As a result of the ownership changes, portions of the Company’s net operating loss carryforward are subject to annual limitations under Section 382. Subsequent ownership changes, as defined in Section 382, could further limit the amount of net operating loss carryforwards and research and development credits that can be utilized annually to offset future taxable income.

Management of the Company has evaluated the positive and negative evidence bearing upon the realization of its deferred tax assets. Management has considered the Company’s history of losses and, in accordance with the applicable accounting standards, has fully reserved the deferred tax asset.

F-17

EVERGREEN SOLAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Deferred tax assets consist of the following at December 31 (in thousands):

	2006			2007
Gross deferred tax assets
Net operating loss carryforwards	$	34,676		$	35,777
Research and development credit carryforwards		1,748			2,771
Capitalized R&D expenses		10,660			14,856
Accrued expenses and deferred compensation		1,849			3,347
Other, net		0			0
Total gross deferred tax assets		48,933			56,751
Less: gross deferred tax liabilities
Depreciation		(2,679	)		(4,301	)
Basis difference in EverQ investment		(3,224	)		(7,061	)
Other, net		(236	)		(556	)
Tax valuation allowance		(42,794	)		(44,833	)
Net deferred tax asset	$	—		$	—

The Company has not provided for U.S. income taxes on the unremitted earnings of its foreign subsidiaries as these earnings are considered to be indefinitely reinvested.

6.   CAPITAL STOCK

The Company has two classes of capital stock: common and preferred. As of December 31, 2007, the Company had 150,000,000 shares of common stock authorized and 27,227,668 shares of preferred stock authorized, of which 26,227,668 shares were designated Series A convertible preferred stock. In November 2006, the Company’s Board of Directors approved a resolution increasing the number of authorized shares of common stock from 100,000,000 to 150,000,000. The Company’s stockholder meeting was subsequently held on January 5, 2007. At this meeting, the stockholders approved a resolution increasing the number of authorized shares of common stock from 100,000,000 to 150,000,000.

In February 2005, the Company completed a $62.3 million common stock offering, net of offering costs of approximately $4.4 million, to satisfy existing capital requirements and to fund the continuing capacity expansion of its Marlboro, Massachusetts manufacturing facility and the expenditures necessary for the build-out and initial operation of EverQ. A portion of the proceeds from the financing was also used to increase research and development spending on promising next generation technologies and to explore further expansion opportunities. The Company issued 13,346,000 shares of its common stock in the offering. The shares of common stock were sold at a per share price of $5.00 (before underwriting discounts), which represented a 6% discount to the $5.30 closing price of shares of its common stock as reported on the Nasdaq National Market as of the close of business on February 3, 2005.

On April 17, 2007, the Company entered into a multi-year polysilicon supply agreement with DC Chemical Co., Ltd. (“DC Chemical”) under which DC Chemical will supply the Company with polysilicon at fixed prices beginning in late 2008 and continuing through 2014. Concurrent with the execution of the supply agreement, the Company and DC Chemical entered into a stock purchase agreement (the “Purchase Agreement”) pursuant to which DC Chemical purchased 3.0 million shares of the Company’s common stock for $12.07 per share, representing the closing price of the Company’s common stock on the NASDAQ Global Market on April 16, 2007. Pursuant to the Purchase Agreement, the Company issued an additional 4.5 million shares of transfer restricted common stock and 625 shares of transfer restricted preferred stock to DC Chemical. The preferred stock automatically converted into 6.25 million shares of transfer restricted common

F-18

EVERGREEN SOLAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

stock in May 2007 upon the termination of the applicable waiting period under the Hart Scott Rodino Antitrust Improvements Act of 1976, as amended. The restrictions on the common stock will lapse upon the delivery of 500 metric tons of polysilicon to the Company by DC Chemical. Issuance of the restricted shares represented a prepayment of inventory cost valued at approximately $119.9 million, based on the issuance date market price of the Company’s common shares adjusted for a discount to reflect the transfer restriction, and will be amortized as an additional cost of inventory as silicon is delivered by DC Chemical and utilized by the Company. When the transfer restriction on these shares lapse, the Company will record an additional cost of inventory equal to the value of the discount associated with the restriction at that time if the stock price on that date is higher than $12.07 which will be amortized as an incremental cost of inventory as silicon is delivered by DC Chemical and utilized by the Company.

On May 30, 2007, the Company closed a public offering of 17,250,000 shares of its common stock, which included the exercise of an underwriters’ option to purchase 2,250,000 additional shares. The shares of common stock were sold at a per share price of $8.25 (before underwriting discounts).

Gross proceeds to the Company from the combined DC Chemical stock purchase and public offering transactions were approximately $178.6 million and net proceeds, after underwriting commissions and other offering expenses, were approximately $170.7 million.

At December 31, 2007, 10,650,000 shares of common stock were authorized for issuance under the Company’s Amended and Restated 2000 Stock Option and Incentive Plan and approximately 467,000 shares were reserved for issuance upon conversion of outstanding warrants from the June 2004 warrant agreement.

7.   STOCK BASED COMPENSATION

On January 1, 2006, the Company adopted the provisions of Statement of Financial Accounting Standards No. 123 — (revised 2004) “Share-Based Payment” (“SFAS 123R”). The following table presents stock-based compensation expense included in the Company’s consolidated statements of operations under SFAS 123R (in thousands):

	Year Ended December 31,
	2006		2007
Cost of revenue	$	420	$	617
Research and development expenses		1,562		1,633
Selling, general and administrative expenses		3,080		4,008
Facility start-up		—		124
	$	5,062	$	6,382

Prior to the adoption of SFAS 123R on January 1, 2006, the Company accounted for its stock-based employee compensation plans under APB Opinion No. 25. Accordingly, no compensation cost was recorded related to stock options as all options granted had an exercise price at least equal to the fair market value of the underlying common stock on the date of the grant.

The Company had previously adopted the provisions of Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation,” (“SFAS 123”), as amended by SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure” through disclosure only. The following table illustrates the effects on net loss and net loss per share for the year ended December 31, 2005

F-19

EVERGREEN SOLAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

as if the Company had applied the fair value recognition provisions of SFAS 123R to share-based employee awards:

	Net Loss			Net Loss
	Attributable			Per
	to Common			Common
	Stockholders			Share
	(In thousands)
Net loss attributable to common stockholders, as reported	$	(17,316	)	$	(0.29	)
Add: Stock-based employee compensation expense included in reported results		7			—
Deduct: Total stock-based employee compensation expense determined under the fair value-based method for all awards		(3,625	)		(0.06	)
Pro forma net loss attributable to common stockholders	$	(20,934	)	$	(0.35	)

Stock Incentive Plans

The Company is authorized to issue up to 10,650,000 shares of common stock pursuant to its Amended and Restated 2000 Stock Option and Incentive Plan (the “2000 Plan”), of which 1,302,347 shares are available and reserved for future issuance or future grant as of December 31, 2007. The purpose is to incent employees and other individuals who render services to the Company by providing opportunities to purchase stock in the Company. The 2000 Plan authorizes the issuance of incentive stock options, nonqualified stock options, restricted stock awards, stock appreciation rights, performance units and performance shares. All options granted will expire ten years from their date of issuance. Incentive stock options and restricted stock awards generally have a four-year vesting period from their date of issuance and nonqualified options generally vest immediately upon their issuance.

Stock option activity under the 2000 Plan is summarized as follows:

				Weighted-
				Average
	Shares			Exercise Price
	(in thousands)
Outstanding at January 1, 2005		5,750		$	2.41
Granted		1,312			6.16
Exercised		(750	)		2.30
Forfeited		(262	)		4.11
Outstanding at December 31, 2005		6,050			3.15
Granted		643			14.42
Exercised		(988	)		2.51
Forfeited		(396	)		12.05
Outstanding at December 31, 2006		5,309			4.20
Granted		16			10.63
Exercised		(1,031	)		3.20
Forfeited		(109	)		6.02
Outstanding at December 31, 2007		4,185		$	4.43

F-20

EVERGREEN SOLAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes information about stock options outstanding at December 31, 2007:

			Options Outstanding
			Weighted				Options Exercisable
			Average		Weighted				Weighted
			Remaining		Average				Average
	Number		Contractual		Exercise		Number		Exercise
Range of Exercise Prices	Outstanding		Life (Years)		Price		Exercisable		Price
	(in thousands)						(in thousands)
$ 0.76   $ 1.60		152		4.19	$	1.32		152	$	1.32
1.61     1.61		1,638		5.94		1.61		1,638		1.61
1.68     1.95		7		5.59		1.75		7		1.75
2.00     2.00		563		5.88		2.00		562		2.00
2.08     4.55		426		5.87		2.81		310		2.84
4.70     7.30		699		6.92		6.37		358		6.44
7.59    13.97		314		7.22		9.72		245		9.81
14.00    14.00		35		2.84		14.00		35		14.00
15.09    15.09		335		8.15		15.09		84		15.09
19.00    19.00		16		2.84		19.00		16		19.00
		4,185		6.26	$	4.43		3,407	$	3.41

The weighted average grant-date fair value of stock options granted during the year ended December 31, 2007 was $9.39. The aggregate intrinsic value of outstanding options as of December 31, 2007 was $53.8 million, of which $47.3 million relates to options that were vested. The aggregate intrinsic value of outstanding options as of December 31, 2006 was $22.0 million, of which $14.9 million relates to options that were vested. The intrinsic value of options exercised during the years ended December 31, 2007 and 2006 were approximately $11.5 million and $10.2 million, respectively. As of December 31, 2007, there was $4.0 million of total unrecognized compensation cost related to unvested stock options granted under the Company’s stock plans. That cost is expected to be recognized over a weighted-average period of 1.6 years.

The Company estimates the fair value of stock options using the Black-Scholes valuation model. Key input assumptions used to estimate the fair value of stock options include the exercise price of the award, the expected option term, the expected volatility of the Company’s stock over the option’s expected term, the risk-free interest rate over the stock option’s expected term, and the Company’s expected annual dividend yield. The Company believes that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of the Company’s stock options granted for the fiscal years ended December 31, 2005, 2006 and 2007. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by persons who receive equity awards. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions:

	2005	2006	2007
Expected options term (years)	7	6.25	6.25
Risk-free interest rate	4.0%	4.9%-5.1%	5.1%
Expected dividend yield	None	None	None
Volatility	90%	130%	155%

The Company’s expected option term assumption was determined using the simplified method for estimating expected option life, which qualify as “plain-vanilla” options. The expected stock volatility factor was determined using historical daily price changes of the Company’s common stock. The Company bases the risk-free interest rate that is used in the stock option valuation model on U.S. Treasury securities issued with

F-21

EVERGREEN SOLAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

maturities similar to the expected term of the options. The Company does not anticipate paying any cash dividends in the foreseeable future and therefore uses an expected dividend yield of zero in the option valuation model. The Company estimates forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company uses historical data to estimate pre-vesting option forfeitures and records stock-based compensation expense only for those awards that are expected to vest.

Restricted stock activity under the 2000 Plan is summarized as follows:

				Weighted-
				Average
				Grant Date
	Shares			Fair Value
	(In thousands)
Outstanding at January 1, 2005		—		$	—
Granted		100			10.42
Outstanding at December 31, 2005		100			10.42
Granted		1,116			14.45
Vested		(32	)		8.75
Forfeited		(55	)		14.45
Outstanding at December 31, 2006		1,129			14.25
Granted		1,986			9.39
Vested		(133	)		10.45
Forfeited		(145	)		14.39
Outstanding at December 31, 2007		2,837		$	11.02

For the year ended December 31, 2007, included in grants of restricted shares are 1,086,000 shares of the Company’s common stock with a fair value of $18.7 million that were granted to employees, and which vest over a four year period.

Also included in the 2007 grants of restricted shares are 900,000 shares of performance-based restricted stock of which 800,000 were granted to the Company’s executive officers in February 2007 and 100,000 granted to a Company executive officer in July 2007, all of which immediately vest upon the achievement of (a) $400 million in annual revenue, such revenue to include 100% of the Company’s revenue and the Company’s pro rata share of any joint venture revenue, (b) 35% gross margin and (c) 10% net income, as adjusted for the results of the joint venture, achieved in one fiscal year prior to January 1, 2012. In February 2006, the Company granted 800,000 shares of performance-based restricted stock to the Company’s executive officers, which immediately vest upon the achievement of (a) $300 million in annual revenue, such revenue to include 100% of the Company’s revenue and the Company’s pro rata share of any joint venture revenue, (b) 35% gross margin and (c) 7% net income, as adjusted for the results of the joint venture, achieved in one fiscal year prior to January 1, 2011. The Company has assumed that none of these performance-based awards will vest and accordingly has not provided for compensation expense associated with the awards. The Company periodically evaluates the likelihood of reaching the performance requirements and will be required to recognize $18.2 million of compensation expense associated with these performance-based awards if such awards should vest.

The aggregate intrinsic value of outstanding restricted stock awards, including performance based awards, as of December 31, 2007 was $49.0 million. During the year ended December 31, 2007, approximately 133,000 shares of restricted stock vested, with an aggregate vest-date fair value of approximately $1.4 million.

F-22

EVERGREEN SOLAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

There was $11.0 million of unrecognized compensation expenses related to unvested restricted stock awards (excluding performance-based awards that the Company has assumed will not vest) under the Company’s stock plans which is expected to be recognized over a weighted-average period of 3.0 years.

8.   EMPLOYEE STOCK PURCHASE PLAN

In September 2000, the Company’s Board of Directors adopted an Employee Stock Purchase Plan (“the ESPP”). Under the ESPP, eligible employees of the Company who elect to participate are granted options to purchase common stock at a 15% discount from the market value of such stock. The Company’s 2005 Annual Meeting of Stockholders was held on July 15, 2005. At this meeting, the stockholders approved a resolution which amended the ESPP to include the following material changes: (i) an increase to 500,000 in the number of shares of the Company’s common stock that may be issued under the 2000 ESPP, (ii) the elimination of the 25-share purchase limitation for each participant for a Purchase Period and the addition of a provision that instead would allow the Compensation Committee to establish a limit for each Purchase Period in its discretion and (iii) addition of a provision to give the Compensation Committee discretion to prospectively increase the discount to purchase shares under the 2000 ESPP.

During the year ended December 31, 2007, employees paid the company approximately $426,000 to purchase approximately 59,000 shares of common stock and the Company recognized approximately $204,000 of compensation expense related to this ESPP activity. Compensation expense was calculated using the fair value of the employees’ purchase rights under the Black-Scholes valuation model. As of December 31, 2007, there were approximately 112,000 shares issued under the ESPP since its inception and approximately 388,000 shares of common stock available and reserved for future issuance or future grant under the ESPP.

9.   WARRANTS

In connection with a Series A convertible preferred stock financing transaction consummated in May 2003, Beacon Power Corporation purchased a warrant for $100,000, which was exercisable for 2,400,000 shares of the Company’s common stock at an exercise price of $3.37 per share. During 2005, Beacon Power Corporation sold this warrant to CRT Capital Group, and on February 8, 2006, CRT Capital Group exercised the warrant to purchase 2,400,000 shares of the Company’s common stock resulting in proceeds to the Company of $8.1 million.

In connection with the Company’s Common Stock Private Placement consummated on June 21, 2004, the Company issued warrants to purchase up to 2,298,851 shares of its common stock to the investors participating in the financing as well as a warrant to purchase 125,000 shares of common stock to CRT Capital Group LLC, as compensation for CRT Capital Group’s services as the placement agent for the Common Stock Private Placement. The terms of the placement agent warrant are identical to the terms of the warrants issued to the investors participating in the Common Stock Private Placement. The warrants entitle the holders to shares of the Company’s common stock at an exercise price of $3.34. The warrants are exercisable at any time prior to June 22, 2009. During the period ended December 31, 2007, holders of warrants associated with the Company’s Common Stock Private Placement exercised their warrants to purchase approximately 256,000 shares of the Company’s common stock resulting in proceeds to the Company of approximately $667,000.

10.   EMPLOYEES’ SAVINGS PLAN

The Company established a 401(k) plan in 1996 for eligible employees. Under the provisions of the plan, eligible employees may voluntarily contribute a portion of their compensation up to the statutory limit. The Company’s 401(k) plan provides a matching contribution of 100% of participating employee contributions, up to a maximum of $750 per year. The Company made matching contributions of $144,000, $110,000 and $93,000 to participating employees during the fiscal years ended December 31, 2007, 2006, and 2005, respectively.

F-23

EVERGREEN SOLAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

11.   COMMITMENTS

LEASES

On March 13, 2000, the Company entered into a ten-year lease commencing July 1, 2000, for office and manufacturing space in Marlboro, Massachusetts. Pursuant to the terms of the lease agreement, the Company will pay annual rent ranging from $464,000 in the first year to $534,000 during the last year of the lease. The Company recognizes rent expense using a straight-line convention. Rent is payable on the first day of each month and is collateralized by a $414,000 standby letter of credit. In connection with this arrangement, the Company invested in a certificate of deposit pledged to a commercial bank. This certificate of deposit was classified as “restricted cash” on the December 31, 2006 and 2007 balance sheet.

On January 24, 2004, the Company entered into a six and one-half year lease for additional office and warehouse space in Marlboro, Massachusetts. Pursuant to the terms of the lease agreement, the Company will pay annual rent of approximately $149,000. The lease was amended in December 2004 to assume more office space beginning in 2005 in consideration for a small increase in office rent.

In January 2006, the Company entered into a seven year lease for additional space dedicated mainly to research and development in Marlboro, Massachusetts. Pursuant to the terms of the lease agreement, the Company will pay annual rent ranging from $94,000 in the first year to $171,000 during the last year of the lease. The Company recognizes rent expense using a straight-line convention. In connection with leasing this additional space, the landlord agreed to provide the Company with an incentive towards build-out costs of approximately $400,000, which the Company has included as a deferred credit to be amortized over the remaining term of the lease.

In July 2006, the Company entered into a six and one-half year lease for expansion of additional space dedicated mainly to research and development in Marlboro, Massachusetts. Pursuant to the terms of the lease agreement, the Company will pay annual rent ranging from $138,000 in the first year to $172,000 during the last year of the lease. The Company recognizes rent expense using a straight-line convention.

In November 2007, the Company entered into a thirty year lease agreement with the Massachusetts Development Finance Agency to lease approximately 23 acres of land located in Devens, Massachusetts for the construction of a manufacturing facility. The base rent for the property is one dollar per year. The Company may extend the lease term for two ten-year periods at the original base rent and also has the option to purchase the property at any time during the initial 30-year term. On or prior to November 20, 2012, the purchase price shall be $2.7 million. After November 20, 2012, the purchase price will be the greater of $2.7 million or the appraised fair market value of the property.

The following is a schedule, by year, of future minimum rental payments required under all leases that have remaining non-cancelable lease terms in excess of one year as of December 31, 2007 (in thousands):

2008	$	1,074
2009		1,062
2010		763
2011		334
2012		343
Thereafter		14
Total	$	3,590

Occupancy expense, which includes rent, property taxes, and other operating expenses associated with all of the Company’s Marlboro locations, was $969,000, $1.3 million and $1.4 million for the years ended December 31, 2005, 2006, and 2007, respectively.

F-24

EVERGREEN SOLAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

OTHER COMMITMENTS

As of December 31, 2007, the Company had outstanding commitments for capital expenditures of approximately $111.2 million, expected to be fulfilled in 2008, primarily for the construction and equipment for its new Devens facility and equipment for its Marlboro facility. Additionally, the Company had approximately $629.5 million in commitments for raw material purchases over the next 12 years as of December 31, 2007.

12.   SEGMENT INFORMATION

The Company currently operates as one segment. For the year ended December 31, 2006, the Company had two reportable operating segments: Evergreen Solar, Inc. and EverQ GmbH. The chief operating decision maker evaluated performance based on a number of factors, the primary measure being product revenue and gross profit. Information on segment assets is not disclosed as it is not reviewed by the chief operating decision maker. The purpose of EverQ is to develop and operate facilities to manufacture solar products based on the Company’s proprietary String Ribbon technology using fabrication processes that combine the Company’s, Q-Cells’ and REC’s manufacturing technologies. Evergreen Solar develops, manufactures and markets solar power products enabled by its proprietary String Ribbon technology.

Segment Revenue and Gross Profit

Reportable segment information for the year ended December 31, 2006 was as follows (in thousands):

	Evergreen			EverQ
	Solar, Inc.			GmbH			Eliminations			Total
Revenue	$	101,303			54,535			(52,692	)	$	103,146
Gross profit		2,681			9,261			—			11,942
Operating loss		(29,443	)		(422	)		—			(29,865	)
Net loss		(25,160	)		(2,358	)		849			(26,669	)
Other supplemental information
Interest Income		5,659			291			(1,337	)		4,613
Interest expense		4,032			3,389			(1,337	)		6,084
Depreciation expense		5,136			4,175			—			9,311
Amortization of deferred grant credits		—			2,004			—			2,004

F-25

EVERGREEN SOLAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Geographic and Customer Concentration of Revenue Information

Product revenues are attributed to regions based on the location of customers. The following table summarizes the Company’s geographical and customer concentration of total product revenue:

	2005			2006			2007
By geography:
United States		28	%		37	%		82	%
Germany		63	%		48	%		7	%
Spain		—			13	%		—
All other		9	%		2	%		11	%
		100	%		100	%		100	%
By customer:
PowerLight		—			10	%		31	%
SunEdison		—			—			14	%
groSolar		—			6	%		12	%
Krannich Solartechnik		20	%		3	%		—
Donauer Solartechnik		19	%		13	%		1	%
All other		61	%		68	%		42	%
		100	%		100	%		100	%

13.   INVESTMENT IN EVERQ

Through December 19, 2006, the Company owned 64% of EverQ and consolidated the financial statements of EverQ in accordance with the provisions of Financial Accounting Standards Board (FASB) FIN 46(R), “Consolidation of Variable Interest Entities, an interpretation of ARB No. 51.” As a result of the Company’s reduction in ownership in EverQ to one-third on December 19, 2006, the Company has applied the equity method of accounting for its share of EverQ’s operating results from December 20, 2006 forward in accordance with APB 18 “Equity Method of Accounting for Investments in Common Stock.”

The summarized financial information for EverQ for the years ended December 31, 2005, 2006 and 2007 is as follows (in thousands):

	For the Year Ended December 31,
	2005			2006			2007
Revenue	$	—		$	59,295		$	193,613
Cost of goods sold		—			51,160			159,781
Other expenses		4,458			9,006			27,320
Net income (loss)		(4,458	)		(871	)		6,512

	As of December 31,
	2006		2007
Current assets	$	125,232	$	205,460
Non-current assets		144,279		350,155
Current liabilities		100,471		141,068
Non — current liabilities		80,763		282,293

F-26

EVERGREEN SOLAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Evergreen Solar Loans to EverQ

In November 2005, the Company entered into a Shareholder Loan Agreement to provide EverQ with a loan totaling 8.0 million Euros. Under the terms of the Shareholder Loan Agreement, the loan carried a fixed interest rate of 5.4%, had a term of four years and was subordinated to all other outstanding debt of EverQ. In addition, during 2006 the Company provided EverQ with additional loans to help fund the initial financing requirement of the first two factories. In January 2007, the Company, REC and Q-Cells entered into a new shareholder loan agreement with EverQ. Under the terms of the shareholder loan agreement, EverQ repaid all outstanding shareholder loans, plus accrued interest, in exchange for a new shareholder loan of 30 million Euros from each shareholder. The table below summarizes the principal and terms of the Company’s share of this outstanding loan as of December 31, 2007:

Date of Loan	Principal (EUR)		Principal (USD)		Interest Rate			Date Due
January 25, 2007	€	30,000,000	$	43,809,000		5.43	%		December 31, 2009

14.   LINE OF CREDIT

On April 6, 2007, the Company entered into a Loan and Security Agreement with a bank providing for a credit facility that provides for a $25,000,000 secured revolving line of credit, which may be used to borrow revolving loans or to issue letters of credit on the Company’s behalf, and includes a foreign exchange sublimit and a cash management services sublimit. The interest rates on borrowings under the line of credit are calculated by reference to the bank’s prime rate and will depend on maintenance by the Company of certain amounts of cash at the bank. As part of this agreement, the Company is required to pay a fee on the unused portion of the credit facility.

The credit facility contains certain financial covenants, including a covenant that requires the Company to maintain from April 6, 2007 through and including July 1, 2007 a minimum of $10,000,000 in an account with the bank and afterwards maintain a minimum cash and committed availability covenant, and as of June 30, 2007 and each month thereafter maintain a tangible net worth covenant, provided that the tangible net worth covenant will not apply for each month in which the Company maintains at least $50,000,000 at the bank. The credit facility also contains certain other restrictive loan covenants, including covenants limiting the Company’s ability to dispose of assets, make acquisitions, be acquired, incur indebtedness, grant liens, make investments, pay dividends, and repurchase stock. The credit facility contains events of default that include, among others non-payment of principal or interest, inaccuracy of any representation or warranty, violation of covenants, bankruptcy and insolvency events, material judgments, cross defaults to certain other indebtedness, a material adverse change default, and events constituting a change of control. The occurrence of an event of default could result in the acceleration of the Company’s obligations under the credit facility.

The credit facility matures on April 5, 2008, at which time all outstanding borrowings and any unpaid interest thereon must be repaid, and all outstanding letters of credit must be cash collateralized. As of December 31, 2007, there was approximately $1.4 million of secured letters of credit outstanding.

15.   LONG TERM DEBT

On June 29, 2005, the Company issued Convertible Subordinated Notes (“Notes”) in the aggregate principal amount of $90.0 million. Interest on the Notes is payable semiannually at the annual rate of 4.375%. The Notes do not have required principal payments prior to maturity on July 1, 2012. The Notes are subordinate in right of payment to all of the Company’s existing and future senior debt.

The Company incurred financing costs of approximately $3.1 million in connection with the issuance of this debt which are being amortized ratably over the seven-year term of the notes. For the year ended December 31, 2007 and 2006, the Company recorded approximately $3.0 million and $3.6 million,

F-27

EVERGREEN SOLAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

respectively, in interest expense associated with the Notes, net of capitalized interest of approximately $983,000 and $350,000, respectively.

Conversion Option

The Notes are convertible at any time into shares of the Company’s common stock at an initial conversion rate of 135.3180 shares of common stock per $1,000 principal amount of Notes (equivalent to a conversion price of approximately $7.39 per share). The conversion rate can be adjusted upon certain events with a “make whole” premium feature. On or after July 1, 2010, the Company may redeem the Notes for cash at the following prices expressed as a percentage of the principal amount:

Redemption Period	Price (%)
Beginning on July 1, 2010 and ending on June 30, 2011		101.250
Beginning on July 1, 2011 and ending on June 30, 2012		100.625
On July 1, 2012		100.000

Put Option

Upon the occurrence of a designated event (defined as a change in control or termination in trading), the holders of the debt will have the ability to require the Company to repurchase the Notes. If the designated event is for termination of trading, the Company will repurchase the debt at an amount equal to the convertible debt instrument’s accreted value plus any accrued but unpaid interest; however, if the designated event is for the change in control at its option, the Company may pay the repurchase price in cash (at accreted value plus accrued but unpaid interest) or shares of their common stock valued at a discount of 5% from the market price.

Call Options

The Company has the option to repurchase the notes, at any time in whole or in part, on or after July 6, 2008 through July 1, 2010 at a price of 100% of the principal amount, plus accrued and unpaid interest to the redemption date if the common stock price exceeds 130% of the then current conversion price for at least 20 days in a 30 day trading period.

16.   RELATED PARTY TRANSACTIONS

In the normal course of business, the Company and EverQ purchase silicon from REC or its affiliates under existing supply agreements. For the year ended December 31, 2007, the Company purchased silicon for approximately $3.0 million. For the year ended December 31, 2006, the Company and EverQ purchased silicon from REC for approximately $8.0 million. As of December 31, 2007 and 2006, the Company had $0 and $474,000 outstanding to REC.

For the year ended December 31, 2007, the Company received fees from EverQ for its marketing and sale of EverQ panels, as well as management of customer relationships and contracts, and royalty payments for its technology contribution to EverQ, which combined totaled approximately $11.5 million. The Company also receives payments from EverQ as a reimbursement of certain research and development and other support costs it incurs that benefit EverQ. For the year ended December 31, 2007, the Company earned $1.9 million from EverQ for reimbursement of research and development costs and other support costs. In addition, during the normal course of operations, the Company may buy or sell materials to EverQ. For the year ended December 31, 2007, the Company purchased $6.7 million in materials from EverQ and sold $88,000 in materials to EverQ. At December 31, 2007 amounts due from EverQ of $4.3 million and amounts due to EverQ of $29.6 million are included on the balance sheet.

F-28

EVERGREEN SOLAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

For the period January 1, 2006 through December 20, 2006, the Company sold approximately $57.3 million of product manufactured by EverQ and charged EverQ approximately $2.0 million in support fees. As of December 31, 2006, approximately $15.3 million of accounts receivable were included in the Company’s balance sheet relating to the EverQ product sales and support fees. Additionally, the Company owed EverQ approximately $12.9 million associated with the sale of EverQ product prior to December 20, 2006.

17.   SUBSEQUENT EVENTS

Entry into New Polysilicon Supply Agreement with DC Chemical

On January 30, 2008, the Company entered into a second multi-year polysilicon supply agreement with DC Chemical. The supply agreement provides the general terms and conditions pursuant to which DC Chemical will supply the Company with specified annual quantities of polysilicon at fixed prices beginning in 2009 and continuing through 2015. Within one month of the signing of the supply agreement, the Company is required to make an approximately $11.0 million nonrefundable prepayment to DC Chemical. Additional nonrefundable prepayments totaling approximately $25.5 million will be required at various times prior to the end of 2008.

Public Offering

On February 15, 2008, the Company closed a public offering of 18.4 million shares of its common stock, which included the exercise of an underwriters’ option to purchase 2.4 million additional shares. The shares of common stock were sold at a per share price of $9.50 (before underwriting discounts).

F-29

EVERGREEN SOLAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

18.   UNAUDITED QUARTERLY RESULTS

The following table sets forth unaudited selected financial information for the periods indicated. This information has been derived from unaudited consolidated condensed financial statements, which, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of such information. The Company’s independent auditors have not audited this information. The results of operations for any quarter are not necessarily indicative of the results to be expected for any future period.

QUARTERLY STATEMENT OF OPERATIONS

	Apr 1,			Jul 1,			Sept 30,			Dec 31,			Mar 31,			Jun 30,			Sept 29,			Dec 31,
	2006			2006			2006			2006			2007			2007			2007			2007
	(In thousands, except per share data)
	Unaudited
Revenues:
Product	$	11,566		$	22,048		$	36,231		$	32,407		$	12,627		$	13,407		$	15,383		$	16,917
Royalty and fee		—			—			—			—			1,471			1,985			2,807			5,269
Total revenues		11,566			22,048			36,231			32,407			14,098			15,392			18,190			22,186
Cost of revenue		13,008			21,121			30,525			25,656			11,269			11,952			13,660			15,957
Gross profit (loss)		(1,442	)		927			5,706			6,751			2,829			3,440			4,530			6,229
Operating expenses:
Research and development		4,010			3,800			4,511			6,069			5,224			5,144			5,381			4,845
Selling, general and administrative		4,583			6,554			5,272			5,481			4,740			5,536			5,079			5,253
Facility start-up					—			—			—			—			—			358			1,046
Loss on disposal of fixed assets		—			—			—			1,526			—			—			—			—
Total operating expenses		8,593			10,354			9,783			13,076			9,964			10,680			10,818			11,144
Operating loss		(10,035	)		(9,427	)		(4,077	)		(6,325	)		(7,135	)		(7,240	)		(6,288	)		(4,915	)
Other income (expense), net
Foreign exchange gains (losses), net		540			1,419			148			1,215			599			145			(133	)		(167	)
Interest income		1,339			1,264			917			1,093			1,250			2,160			3,268			3,096
Interest expense		(1,461	)		(1,650	)		(1,763	)		(1,210	)		(909	)		(927	)		(914	)		(662	)
Other income (expense), net		418			1,033			(698	)		1,098			940			1,378			2,221			2,267
Loss before minoritiy interest and equity income		(9,617	)		(8,394	)		(4,775	)		(5,227	)		(6,195	)		(5,862	)		(4,067	)		(2,648	)
Minority interest in EverQ		1,483			929			(828	)		(735	)		—			—			—			—
Equity income (loss) from interest in EverQ		—			—			—			495			(24	)		(1,646	)		404			3,436
Net income (loss)	$	(8,134	)	$	(7,465	)	$	(5,603	)	$	(5,467	)	$	(6,219	)	$	(7,508	)	$	(3,663	)	$	788
Net income (loss) per share:
Basic	$	(0.13	)	$	(0.11	)	$	(0.08	)	$	(0.08	)	$	(0.09	)	$	(0.09	)	$	(0.04	)	$	0.01
Diluted	$	(0.13	)	$	(0.11	)	$	(0.08	)	$	(0.08	)	$	(0.09	)	$	(0.09	)	$	(0.04	)	$	0.01
Weighted average shares used in computing basic and diluted net income (loss) per share:
Basic		63,771			65,789			66,127			66,880			67,001			82,562			98,343			98,802
Diluted		63,771			65,789			66,127			66,880			67,001			82,562			98,343			102,656

F-30

EVERGREEN SOLAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

19.   VALUATION AND QUALIFYING ACCOUNTS

The following table sets forth activity in the Company’s valuation and qualifying accounts (in thousands):

	Balance at
	Beginning		Charged to						Balance at
Description	of period		Operations			Deductions			End of Period
Year ended December 31, 2005
Reserves and allowances deducted from assets accounts:
Income tax valuation allowance	$	22,537		7,550			(1,141	)	$	28,946
Allowance for doubtful accounts & sales discounts		84		(19	)		—			65
Year ended December 31, 2006
Reserves and allowances deducted from assets accounts:
Income tax valuation allowance		28,946		10,227			3,621			42,794
Allowance for doubtful accounts		65		35			—			100
Year ended December 31, 2007
Reserves and allowances deducted from assets accounts:
Income tax valuation allowance		42,794		5,875			(3,836	)		44,833
Allowance for doubtful accounts		100		(1	)		(14	)		85

F-31

Schedule 1 — Condensed Financial Information of the Registrant

Condensed Balance Sheet

	December 31,
	2006
	(In thousands, except
	share data)
ASSETS
Total current assets	$	81,994
Restricted cash		414
Investment in and advances to EverQ		70,460
Deferred financing costs		2,434
Fixed assets, net		50,516
Other assets		1,433
Total assets		207,251
LIABILITIES AND STOCKHOLDERS’ EQUITY
Total current liabilities		24,404
Subordinated convertible notes		90,000
Stockholders’ equity
Common stock, $0.01 par value, 100,000,000 shares authorized, 68,066,204 issued and outstanding		681
Additional paid-in capital		211,053
Accumulated deficit		(119,678	)
Accumulated other comprehensive income		791
Total stockholders’ equity		92,847
Total liabilities and stockholders’ equity	$	207,251

F-32

Schedule 1 — Condensed Financial Information of the Registrant

Condensed Statements of Operations

	For the Years Ended December 31,
	2005			2006
	(In thousands, except per share data)
Product revenues	$	43,627		$	44,866
Cost of revenues		39,954			42,184
Gross profit		3,673			2,682
Operating expenses:
Research and development		9,348			17,109
Selling, general and administrative		9,678			16,339
Loss on disposal of fixed assets		—			1,526
Total operating expenses		19,026			34,974
Operating loss		(15,353	)		(32,292	)
Other income, net		1,298			3,787
Equity income from interest in EverQ		—			495
Net loss	$	(14,055	)	$	(28,010	)
Net loss per share (basic and diluted)	$	(0.24	)	$	(0.43	)
Weighted average shares used in computing basic and diluted net loss per share		59,631			65,662

F-33

Schedule 1 — Condensed Financial Information of the Registrant

Condensed Statements of Cash Flows

	For the Years Ended December 31,
	2005			2006
	(In thousands)
Net cash used in operating activities	$	(11,477	)	$	(17,431	)
Net cash used in investing activities		(118,126	)		(21,936	)
Net cash provided by financing activities		154,142			16,277
Net increase (decrease) in cash and cash equivalents		24,539			(23,090	)
Cash and cash equivalents at beginning of year		5,379			29,918
Cash and cash equivalents at end of year	$	29,918		$	6,828

F-34

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned on this 27th day of February, 2008, thereunto duly authorized.

EVERGREEN SOLAR, INC.

By:  /s/  Richard M. Feldt

Richard M. Feldt

Chief Executive Officer,

President and Chairman of the Board (Principal

Executive Officer)

POWER OF ATTORNEY

KNOW ALL PERSONS BY THERE PRESENTS, that each person whose signature appears below constitutes and appoints Richard M. Feldt and Michael El-Hillow, and each of them his attorneys-in-fact, each with the power of substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K with all exhibits thereto and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that such attorneys-in-fact and agents or any of them, or his or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Name	Title	Date
/s/  Richard M. Feldt Richard M. Feldt	Chief Executive Officer, President and Chairman of the Board (Principal Executive Officer)	February 27, 2008
/s/  Michael El-Hillow Michael El-Hillow	Chief Financial Officer and Secretary (Principal Financial and Accounting Officer)	February 27, 2008
/s/  Allan H. Cohen Allan H. Cohen	Director	February 27, 2008
/s/  Edward C. Grady Edward C. Grady	Director	February 27, 2008
/s/  Dr. Peter W. Cowden Dr. Peter W. Cowden	Director	February 27, 2008
/s/  Tommy Cadwell Tommy Cadwell	Director	February 27, 2008

II-1

EXHIBIT INDEX

Number			Description
	3	.1(A)	Third Amended and Restated Certificate of Incorporation (Exhibit 3.2)
	3	.2(A)	Second Amended and Restated By-laws (Exhibit 3.3)
	3	.3(1)	Certificate of Amendment of Third Amended and Restated Certificate of Incorporation filed with the Secretary of State of the State of Delaware on May 15, 2003 (Exhibit 4.3)
	3	.4(1)	Certificate of the Powers, Designations, Preferences and Rights of the Series A Convertible Preferred Stock of the Registrant (Exhibit 4.4)
	3	.5(2)	Certificate of Amendment of Third Amended and Restated Certificate of Incorporation filed with the Secretary of State of the State of Delaware on August 20, 2004 (Exhibit 4.5)
	3	.6(3)	Certificate of Amendment of Third Amendment and Restated Certificate of Incorporation filed with the Secretary of State of Delaware on January 8, 2007 (Exhibit 3.1)
	3	.7(4)	Certificate of Designations of Rights, Preferences and Privileges of Series B Preferred Stock of the Registrant (Exhibit 3.4)
	4	.1(5)	Indenture between the Registrant and U.S. Bank National Association, as Trustee, dated June 29, 2005 (Exhibit 4.4)
	4	.2(5)	Form of 4.375% Convertible Subordinated Notes due 2012 (Exhibit 4.4)
	10	.1(A)§	1994 Stock Option Plan (Exhibit 10.1)
	10	.2(6)§	Amended and Restated 2000 Stock Option and Incentive Plan (Exhibit 99.1)
	10	.3(6)§	Amended and Restated 2000 Employee Stock Purchase Plan (Exhibit 99.2)
	10	.4(A)§	Lease Agreement between the Registrant and W9/TIB Real Estate Limited Partnership, dated January 31, 2000, as amended (Exhibit 10.5)
	10	.5(A)§	Form of Indemnification Agreement between Registrant and each of its directors and executive officers (Exhibit 10.9)
	10	.6(7)	Stock and Warrant Purchase Agreement, dated June 16, 2004 (Exhibit 10.1)
	10	.7(7)	Warrant Agreement, dated June 21, 2004 (Exhibit 10.2)
	10	.8(7)	Form of Warrants (Exhibit 10.3)
	10	.9(7)	Registration Rights Agreement, dated June 21, 2004 (Exhibit 10.4)
	10	.10(8)†	Master Joint Venture Agreement by and among the Registrant, Q-Cells AG (“Q-Cells”), Renewable Energy Corporation ASA (“REC”) and EverQ GmbH (“EverQ”), dated November 4, 2005 (Exhibit 10.17)
	10	.11(8)†	Technology Co-Operation Agreement by and between the Registrant and REC, dated November 24, 2005 (Exhibit 10.19)
	10	.12(9)§	Evergreen Solar, Inc. Management Incentive Policy (Exhibit 10.20)
	10	.13(5)	Registration Rights Agreement by and between the Registrant and SG Cowen & Co., LLC, as representative of the Initial Purchasers, dated June 29, 2005 (Exhibit 10.21)
	10	.14(10)†	Memorandum of Understanding by and among the Registrant, Q-Cells, EverQ and REC, dated June 5, 2006 (Exhibit 10.1)
	10	.15(11)†	Amendment to the Master Joint Venture Agreement by and among the Registrant, Q-Cells, REC, REC Solar Grade Silicon LLC and EverQ, dated September 29, 2006 (Exhibit 10.26)
	10	.16(11)†	Sales Representative Agreement by and between the Registrant and EverQ, dated September 29, 2006 (Exhibit 10.27)
	10	.17(11)†	Amended and Restated License and Technology Transfer Agreement by and between the Registrant and EverQ, dated September 29, 2006 (Exhibit 10.18)
	10	.18(12)	Loan and Security Agreement between Silicon Valley Bank and the Registrant, dated April 6, 2007 (Exhibit 10.1)
	10	.19(13)	Stock Purchase Agreement by and between the Registrant and DC Chemical Co., Ltd. (“DC Chemical”), dated April 17, 2007 (Exhibit 10.1)
	10	.20(13)	Stockholders Agreement by and between the Registrant and DC Chemical, dated April 17, 2007 (Exhibit 10.2)

Number			Description
	10	.21(14)†	Supply Agreement by and between the Registrant and DC Chemical, dated April 17, 2007 (Exhibit 10.3)
	10	.22(15)	Guarantee and Undertaking of the Registrant, dated April 30, 2007 (Exhibit 10.1)
	10	.23(15)	Addendum to the Amended and Restated License and Technology Transfer Agreement between the Registrant and EverQ, dated April 30, 2007 (Exhibit 10.2)
	10	.24(16)§	Change of Control Severance Agreement, dated as of June 14, 2007, between the Registrant and Richard M. Feldt (Exhibit 10.1)
	10	.25(16)§	Change of Control Severance Agreement, dated as of June 14, 2007, between the Registrant and Michael El-Hillow (Exhibit 10.2)
	10	.26(16)§	Change of Control Severance Agreement, dated as of June 14, 2007, between the Registrant and Brown F. Williams (Exhibit 10.3)
	10	.27(16)§	Change of Control Severance Agreement, dated as of June 14, 2007, between the Registrant and Richard G. Chleboski (Exhibit 10.4)
	10	.28(16)§	Change of Control Severance Agreement, dated as of June 14, 2007, between the Registrant and Dr. J. Terry Bailey (Exhibit 10.5)
	10	.29(16)§	Change of Control Severance Agreement, dated as of June 14, 2007, between the Registrant and Gary T. Pollard (Exhibit 10.6)
	10	.30(17)§	Change of Control Severance Agreement, dated as of July 30, 2007, between the Registrant and Rodolfo Archbold (Exhibit 10.1)
	10	.31(18)§	Change of Control Severance Agreement, dated effective as of January 21, 2008, between the Registrant and Carl Stegerwald (Exhibit 10.1)
	10	.32(19)†	Amendment of Master Joint Venture Agreement by and among the Registrant, Q-Cells, REC and EverQ, dated October 23, 2007 (Exhibit 10.1)
	10	.33(20)†	Supply Agreement between the Registrant and Wacker Chemie AG, effective as of August 31, 2007 (Exhibit 10.1)
	10	.34*††	Supply Agreement between the Registrant and Solaricos Trading Ltd., dated as of October 24, 2007
	10	.35*††	Memorandum of Understanding by and among the Registrant, EverQ, Q-Cells and REC, dated as of October 25, 2007
	10	.36*	Lease Agreement between the Registrant and the Massachusetts Development Finance Agency (“MDFA”), dated November 20, 2007
	10	.37*	Project Grant Agreement between the Registrant and MDFA, dated November 20, 2008.
	10	.38*	Project Grant Agreement between the Registrant and Massachusetts Technology Park Corporation, dated November 20, 2008
	10	.39*††	Agreement for the Sale and Purchase of Solar Grade Silicon between the Registrant and Silicium de Provence S.A.S. (“Silpro”), dated December 7, 2007
	10	.40*	Subordinated Loan Agreement between the Registrant and Silpro, dated December 7, 2007
	10	.41*††	Supply Agreement by and between the Registrant and DC Chemical, dated January 30, 2008
	23	.1*	Consent of PricewaterhouseCoopers LLP, an Independent Registered Public Accounting Firm
	23	.2*	Consent of Leipzig, Germany PricewaterhouseCoopers AG
	24	.1*	Power of Attorney (see signature page)
	31	.1*	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	31	.2*	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	32	.1*	Certification of the Chief Executive Officer pursuant to Rule 13a-14(d) and Rule 15d-14(d) of the Securities Exchange Act of 1934, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Number			Description
	32	.2*	Certification of the Chief Financial Officer pursuant to Rule 13a-14(d) and Rule 15d-14(d) of the Securities Exchange Act of 1934, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	99	.1*	EverQ GmbH balance sheet for the period ended December 31, 2006
	99	.2*	EverQ GmbH income statement for the period December 20 to December 31, 2006
	99	.3*	EverQ GmbH cash flow for the period December 20 to December 31, 2006
	99	.4*	EverQ GmbH notes to the financial statements for the period December 20 to December 31, 2006
	99	.5*	Opinion Letter, Leipzig, Germany PricewaterhouseCoopers AG

*	Filed herewith.
†	Confidential treatment granted as to certain portions.
††	Confidential treatment requested as to certain portions.
§	Indicates a management contract or compensatory plan, contract or arrangement.
(A)	Incorporated herein by reference to the exhibits to the Registrant’s Registration Statement on Form S-1, initially filed on August 4, 2000. The number given in parenthesis indicates the corresponding exhibit number in such Form S-1.
(1)	Incorporated herein by reference to the exhibits to the Registrant’s Registration Statement on Form S-8, dated June 9, 2003. The number given in parenthesis indicates the corresponding exhibit number in such Form S-8.
(2)	Incorporated herein by reference to the exhibits to the Registrant’s Registration Statement on Form S-3 filed on October 21, 2004. The number given in parenthesis indicates the corresponding exhibit number in such Form S-3.
(3)	Incorporated herein by reference to the exhibits to the Registrant’s Current Report on Form 8-K, dated January 2, 2007 and filed on January 8, 2007. The number given in parenthesis indicates the corresponding exhibit number in such Form 8-K.
(4)	Incorporated herein by reference to the exhibits to the Registrant’s Registration Statement on Form S-3, dated May 16, 2007. The number given in parenthesis indicates the corresponding exhibit number in such Form S-3.
(5)	Incorporated herein by reference to the exhibits to the Registrant’s Current Report on Form 8-K, dated June 23, 2005 and filed on June 29, 2005. The number given in parenthesis indicates the corresponding exhibit number in such Form 8-K.
(6)	Incorporated herein by reference to the exhibits to the Registrant’s Current Report on Form 8-K, dated July 15, 2005 and filed on July 21, 2005. The number given in parenthesis indicates the corresponding exhibit number in such Form 8-K.
(7)	Incorporated herein by reference to the exhibits to the Registrant’s Current Report on Form 8-K, dated June 21, 2004 and filed on June 22, 2004. The number given in parenthesis indicates the corresponding exhibit number in such Form 8-K.
(8)	Incorporated herein by reference to the exhibits to the Registrant’s Annual Report on Form 10-K for the period ended December 31, 2005 filed on March 16, 2006. The number given in parenthesis indicates the corresponding exhibit number in such Form 10-K.
(9)	Incorporated herein by reference to the exhibits to the Registrant’s Quarterly Report on Form 10-Q for the period ended April 2, 2005 filed on May 2, 2005. The number given in parenthesis indicates the corresponding exhibit number in such Form 10-Q.
(10)	Incorporated herein by reference to the exhibits to the Registrant’s Current Report on Form 8-K, dated June 5, 2006 and filed on June 9, 2006. The number given in parenthesis indicates the corresponding exhibit number in such Form 8-K.

(11)	Incorporated herein by reference by reference to exhibits to the Registrant’s Quarterly Report on Form 10-Q for the period ended September 30, 2006 filed on November 7, 2006. The number given in parenthesis indicated the corresponding exhibit number in such Form 10-Q.
(12)	Incorporated herein by reference to the exhibits to the Registrant’s Current Report on Form 8-K, dated April 6, 2007 and filed on April 10, 2007. The number given in parenthesis indicates the corresponding exhibit number in such Form 8-K.
(13)	Incorporated herein by reference to the exhibits to the Registrant’s Current Report on Form 8-K, dated April 17, 2007 and filed on April 17, 2007. The number given in parenthesis indicates the corresponding exhibit number in such Form 8-K.
(14)	Incorporated herein by reference to the exhibits to the Registrant’s Current Report on Form 8-K/A, dated April 17, 2007 and filed on April 23, 2007. The number given in parenthesis indicates the corresponding exhibit number in such Form 8-K/A.
(15)	Incorporated herein by reference to the exhibits to the Registrant’s Current Report on Form 8-K, dated April 30, 2007 and filed on May 4, 2007. The number given in parenthesis indicates the corresponding exhibit number in such Form 8-K.
(16)	Incorporated herein by reference to the exhibits to the Registrant’s Current Report on Form 8-K, dated June 14, 2007 and filed on June 20, 2007. The number given in parenthesis indicates the corresponding exhibit number in such Form 8-K.
(17)	Incorporated herein by reference to the exhibits to the Registrant’s Current Report on Form 8-K, dated July 30, 2007 and filed on August 2, 2007. The number given in parenthesis indicates the corresponding exhibit number in such Form 8-K.
(18)	Incorporated herein by reference to the exhibits to the Registrant’s Current Report on Form 8-K, dated January 18, 2008 and filed on January 22, 2008. The number given in parenthesis indicates the corresponding exhibit number in such Form 8-K.
(19)	Incorporated herein by reference to the exhibits to the Registrant’s Current Report on Form 8-K, dated October 23, 2007 and filed on October 29, 2007. The number given in parenthesis indicates the corresponding exhibit number in such Form 8-K.
(20)	Incorporated herein by reference by reference to exhibits to the Registrant’s Quarterly Report on Form 10-Q for the period ended September 30, 2007 filed on November 8, 2007. The number given in parenthesis indicated the corresponding exhibit number in such Form 10-Q.

EX-10.34

Exhibit 10.34

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been omitted pursuant to a request for confidential treatment and, where applicable, have been marked with an asterisk (“[****]”) to denote where omissions have been made. The confidential material has been filed separately with the Securities and Exchange Commission.

SUPPLY AGREEMENT

This Agreement is made as of October 24, 2007 between EVERGREEN SOLAR, INC., a Delaware corporation, having its registered office at 138 Bartlett Street, Marlboro, MA 01752 USA, , represented by Vice President Richard Chleboski (hereinafter “ESLR”) and SOLARICOS TRADING, LTD., a company organized and existing under the laws of Cyprus, having its registered office at 70 JF Kennedy Avenue, Papabasiliou House, 1st floor, Nicosia 1076, Cyprus, represented by Director Khomchenko Evgenia (hereinafter “NITOL”).

Recitals

Whereas, NITOL desires to supply polysilicon to ESLR for its general use beginning in calendar year 2009 for a continuous period of six years from First Shipment Date;

Whereas, in exchange for NITOL’s agreement to allocate the supply of polysilicon, ESLR desires to provide NITOL with a firm order for polysilicon upon the terms and conditions provided herein;

NOW, THEREFORE, in furtherance of the foregoing Recitals and in consideration of the mutual covenants and obligations set forth in this Agreement, the Parties hereby agree as follows:

          1. Definitions.

The following terms used in this Agreement shall have the meanings set forth below:

          1.1. “Affiliate” shall mean, with respect to either party to this Agreement, any entity that is controlled by or under common control with such party.

          1.2. “Agreement” shall mean this Supply Agreement and all appendices annexed to this Agreement as the same may be amended from time to time in accordance with the provisions hereof.

          1.3. “Annual Quantity of Product” in metric tons is specified in Appendix 1 to this Agreement.

          1.4. “Business day” shall mean a day on which banks are open for business in London, New York and Moscow.

          1.5. “Start of Test Production” shall mean the date on which the NITOL delivers by a recorded delivery or pre-paid courier to ESLR’s address specified in Section 12.4 (or other address notified by ESLR to NITOL) not less than [****] kilograms of polysilicon for ESLR’s internal testing.

          1.6. “Deposit” shall mean all deposits or prepayments made by ESLR to NITOL hereunder.

          1.7. “Effective Date” shall mean the date on which the Agreement has been signed by both Parties.

          1.8. “First Shipment Date” shall mean the first day of the calendar month in which NITOL commences deliveries to ESLR of Products pursuant to this Agreement.

          1.9. “Facility” shall mean all buildings and other improvements now or hereafter owned, developed, constructed, or leased by NITOL, located in Usolie-Sibirskoye and used in the development,

manufacture, processing, storage, or distribution of Products, together with all machinery and equipment used or usable in the operation of such buildings and improvements.

          1.10. “Incoterms” shall mean Incoterms 2000, a set of uniform rules for the interpretation of international commercial terms defining the costs, risks, and obligations of buyers and sellers in international transactions adopted by the International Chamber of Commerce in Paris

          1.11. “Product” shall mean the raw, ultra high purity polysilicon produced from the decomposition of trichloro-silane in a chemical vapor deposition process in chunk form manufactured by NITOL in accordance with the Product Specifications and sold to ESLR pursuant to this Agreement.

          1.12. “Product Specifications” shall mean the quality and other specifications set forth on Appendix 2 to this Agreement.

          1.13. “Scheduled Delivery Date” is defined in clause 4.2.

          1.14. “Term” shall mean the period during which this Agreement is in effect, as more specifically set forth in Section 9 of this Agreement.

          1.15. “Year” shall mean each of the six (6) twelve-month periods commencing on the First Shipment Date.

          2. Ordering.

          2.1. Starting on the First Shipment Date and each Year during the term of this Agreement thereafter, ESLR agrees to purchase and accept delivery from NITOL, and NITOL agrees to sell to ESLR, the Annual Quantity of Product at the prices set forth in Appendix 1 to this Agreement (the “Pricing Schedule”) as the same may be adjusted in accordance with section 5.5 below. This Agreement constitutes a firm order from ESLR to purchase and a commitment for NITOL to supply [****] metric tons of Product that cannot be cancelled during the term of this Agreement, except as set forth in Section 9 below.

          3. Supply Obligations.

          3.1. NITOL shall deliver each Year pursuant to this Agreement starting on the First Shipment Date the Annual Quantity of Product in approximately equal monthly shipments; provided however, that if NITOL fails to deliver a monthly shipment, then NITOL may deliver any deficiency within [****] calendar days of the due date without breaching this section or becoming liable to pay liquidated damages.

          3.2. At any time during the term of this Agreement, NITOL may (but shall not be obliged to) ship to ESLR up to the full remaining balance of the Annual Quantity of Product to be shipped in any given Year (an “Excess Shipment”) with ESLR’s written consent. This Excess Shipment will be credited against each subsequently due monthly shipment until the end of the applicable Year and will be invoiced to ESLR and paid for by ESLR in the same way as a monthly shipment. For example, if the Annual Quantity of Product for a given Year is [****] metric tons, and if NITOL delivers 500 metric tons in January, then the next monthly shipment of one twelfth of [****] metric tons is not required until the commencement of the following Year and the full payment in respect of such [****] metric tons delivery shall be the subject of an invoice delivered around the time of delivery and the timing for payments under clause 5.4 shall be determined accordingly.

          3.3. If NITOL does not supply the Products pursuant to Section 3.1 within [****] calendar days of the Scheduled Delivery Date, NITOL will pay liquidated damages to ESLR equal to [****] of the purchase price of the respective delayed Products for each [****] that the Product shipment is delayed beyond the [****] calendar day grace period. Any liquidated damages payments incurred as a result of this Section 3.3 will be paid by NITOL within [****] calendar days. In lieu of making a cash payment to ESLR pursuant to this Section 3.3,

2

NITOL may, at its option, pay such liquidated damages in the form of a credit issued for the next shipments of Products. Notwithstanding anything to the contrary, the maximum amount of such liquidated damages shall not exceed [****]. Failure to supply a monthly shipment including the required quantity of Product, in conformance with the Product Specifications, within [****] calendar days of the Scheduled Delivery Date shall be deemed to constitute a material breach of this Agreement pursuant to Section 9.2.1 below.

          3.4. Save as specified above and ESLR’s right of termination set out at Section 9 below, and without prejudice to ESLR’s rights to the remedies set-out in Section 7 with respect to non-conforming Product, liquidated damages shall be ESLR’s sole remedy for delay in delivery of any Shipment of Product or part thereof and NITOL shall have no further liability whatsoever, whether in contract, tort or otherwise arising out of or in connection with delay in the delivery of a Shipment of Product

          4. Shipping & Delivery.

          4.1. The first shipment is due between [****], 2009 at NITOL’s sole discretion.

          4.2. Except as provided in Section 3.2 and 4.1 above, shipments shall be made from the Facility on a monthly basis on the last day of the month in accordance with a shipment schedule that will be provided by NITOL not later than the date of the first delivery of Product hereunder and each Year thereafter (the “Shipment Schedule” and each date for shipment set out therein a “Scheduled Delivery Date”). The Shipment Schedule shall provide for approximately equal monthly shipments that add up to the Annual Quantity of Products.

          4.3. The Product shall be packed as provided for in packing specifications set out in Appendix 2.

          5. Payments & Advances.

          5.1. The price of the Product (the “Purchase Price”) in each Year per kg shall be as set out in Appendix 1.

          5.2. Within fifteen (15) Business days after the Effective Date, ESLR shall provide NITOL a deposit of Ten Million U.S. Dollars ($10,000,000) with a further deposit payment of US$5,000,000 within 15 days of [****] (together the “Deposit”) as advance payment for Products to be delivered under this Agreement. The total amount of the Deposit shall be divided equally by the number of kilograms of Product to be delivered by NITOL during the term of this Agreement and that amount multiplied by the number of kilograms of Product delivered and accepted shall be allocated as payment for that shipment.

          5.3. NITOL shall invoice ESLR at or after the time of delivery of each shipment of Products to ESLR specifying the quantity of Product delivered in the shipment, the Purchase Price of the Product delivered and the amount of the Deposit applied to the Purchase Price and the amount of any surplus over or any shortfall in the payment of the Purchase Price of the relevant shipment of Product. Taxes, customs and duties, if any, will be identified as separate items on NITOL invoices. All invoices shall be sent to ESLR in accordance with section 12.4.

          5.4. In the case of any shortfall between the Purchase Price payable for the relevant Shipment of Product and the amount of Deposit to be offset against it, ESLR shall make a balancing payment (the “Balancing Payment”) to NITOL by wire transfer equal to the difference between the Purchase Price of the Shipment of Product delivered and the amount of any Deposit applied to the Purchase Price of that Shipment of Product. Any such Balancing Payment shall be made in full in US Dollars [****] calendar days of the date of receipt of NITOL’s invoice. If the Deposit to be offset against a Shipment of Product exceeds the relevant Purchase Price payable, the excess shall be carried forward and applied to reduce the next Balancing Payment payable by ESLR

          5.5. The Purchase Price for the Product does not include any excise, sales, use, import, export or other similar taxes, such taxes will not include income taxes or similar taxes, which taxes will be invoiced to and

3

paid by ESLR, provided that ESLR is legally or contractually obliged to pay such taxes. NITOL and ESLR will work together to eliminate the possibility of taxes, but if there are any assessed, NITOL shall promptly remit to ESLR in full any such taxes paid by ESLR which are refunded to NITOL in whole or in part. ESLR shall pay for all shipping, insurance, duties, export fees, tariffs and similar charges. NITOL will handle administration of customs and export activities, and will be responsible for all activities needed to ensure that the Product are cleared through customs and shall supply all relevant documentation to ESLR. Title to the Product shall pass to ESLR upon clearance of Russian customs. All deliveries shall be [****] (as per INCOTERMS) NITOL’s Facility in Usolje-Sibirskoye (or as otherwise notified by NITOL to ESLR prior to the Scheduled Delivery Date) (in either case being the “Delivery Location”) save that ESLR shall have the sole obligation to arrange for loading of the Product at the Facility by ESLR’s carrier and shall meet all such costs.

          5.6. In the event that ESLR’s carrier fails to take delivery of a shipment of Product or any part thereof within [****] calendar days of the Scheduled Delivery Date, entirely without prejudice to NITOL’s other rights under this Agreement or at law, NITOL shall be entitled to sell the quantity of Product remaining and shall be entitled to claim all costs of sale and storage together with any difference in the price obtained for the Product when compared to the Purchase Price from ESLR.

          5.7. Late payments and outstanding balances shall accrue interest at the lesser of [****]% per annum or the maximum allowed by law.

          5.8. In the event that ESLR fails to make any Balancing Payment or fails to pay any other sum due under this Agreement, without prejudice to any rights NITOL may have under any security provided by ESLR in respect of payments, NITOL may deduct the amount outstanding from ESLR together with interest from the unused portion of the Deposit with a consequent reduction in the amount of the Deposit available for payment in respect of later shipments of Product.

          6. Security

          6.1. NITOL shall provide ESLR with a parent company guarantee in the form agreed between the parties hereto as security for its obligation to repay the Deposit where such obligation arises under this Agreement.

          7. Product Quality and Testing

          7.1. The Product shall comply with the Product Specification set out at Appendix 2. For the avoidance of doubt any polysilicon submitted to ESLR at the Start of Test Production is not a Product as defined in this Agreement. Additionally the Product shall be free of all liens, mortgages, encumbrances, security interests or other claims or rights.

          7.2. NITOL shall randomly test a sample of not more than [****] kilograms of all Products in accordance with the procedure set out in Appendix 3 before they are delivered to ESLR. NITOL shall prepare, sign and issue certificate as to the quality of the Shipment of Product to be delivered to ESLR.

          7.3. Within [****] calendar days of Product’s title transfer to ESLR, ESLR may test a sample of Product in accordance with Appendix 3. If ESLR does not exercise its testing option, NITOL’s quality certificate will be binding as to quality in the absence of fraud, negligence or wilful default. ESLR shall provide NITOL with the results of testing. Should this test indicate the Product does not meet the Product Specifications set out in Appendix 2, then NITOL shall have the right to inspect the Product at ESLR’s facilities within [****] calendar days from the date after NITOL received ESLR’s results of testing. ESLR shall make available for inspection, surveying and sampling by NITOL the entire quantity of the delivered Products in respect of which it has brought a quality complaint and any delivered Products or part thereof for which ESLR intends to lodge a quality claim must be kept intact and unused until such time as the inspection, sampling and assaying procedures mentioned above have been completed. NITOL shall have the right to reject any quantity or quality claims for any delivered Product or part

4

thereof delivered under this Agreement which has already been consumed or processed or incorporated into any other product by ESLR or any third party. Any consequential storage fees caused hereby shall be borne by ESLR unless the claim is justified in accordance with the stipulations of this Agreement.

If the results of NITOL’s inspection establish that the Products meet the Product Specifications set out in Appendix 2, the Parties will request the third party inspector identified in Appendix 3 to conduct control inspection of the delivered Products. The results obtained by the third party inspector identified in Appendix 3 will be binding as to quality in the absence of fraud or manifest error. The costs of such third party inspector will be shared by and borne equally between the parties.

Should the results of the control inspection and evaluation determine Product does not meet Specifications defined in Appendix 2, and there is no indication the problem arose in shipping or storage, then (i) ESLR shall have the right to reject the delivery or nonconforming Product or part of Product and return the delivery or nonconforming Product or part of Product by giving written notice thereof (identifying the amount of nonconforming Product or part of Product) to NITOL and (ii) NITOL shall promptly replace the nonconforming Product with conforming Product. ESLR will only be obliged under this Section to return the Product to the Delivery Location. NITOL will be responsible for the collection of the Product from the port, customs clearance of the Product and will pay the costs of any further storage or transportation of the Product, in relation to such return of Product,.

If the inspection results confirm that the Product meet the Product Specifications set out in Appendix 2 ESLR will have the obligation to accept the delivery of the Product and pay for it.

Any time taken to inspect the Product by the third party inspector identified in Appendix 3 will not count as delay for the purposes of calculating liquidated damages or any grace period.

          7.4. In the event that any shipment of the Product is rejected by ESLR in accordance with section 7.3, NITOL shall promptly replace the off-specification Product. Any delay in delivery of the Product beyond the Scheduled Delivery Date occasioned thereby shall be dealt with in accordance with Section 3.3 with the Scheduled Delivery Date being for this purpose deemed to be the date of receipt by NITOL of the relevant valid rejection notice in respect thereof.

          7.5. Save as set out in 7.1 and 7.6, all other warranties, whether express, implied or statutory, including the warranties of merchantability, and fitness for a particular purpose are expressly excluded. Subject to ESLR’s right to terminate this Agreement for NITOL’s material breach, [****]. In no event shall NITOL’s liability exceed [****]; nor shall NITOL be liable for any claims, losses or damages of any individual or entity or for lost profits or any special, indirect, incidental, consequential, or exemplary damages, howsoever arising, even if NITOL has been advised of the possibility of such damages.

          7.6. NITOL warrants that the product does not infringe or breach any patent, trademark, trade secret, copyright or other intellectual property right.

          8. Quantity Determination

          8.1. The weight of Product recorded in the carrier’s certificate, receipt issued by the carrier or any other transportation document issued by ESLR’s carrier shall, in the absence of manifest error or fraud, be final and irrebuttable evidence of the actual weight of Product delivered for the purposes of calculating the Purchase Price and for calculation of any Balancing Payment. Should the Product delivered by NITOL fall short of the quantity required by this Agreement, NITOL at its sole discretion may deliver the outstanding amount of Product as an additional Shipment of Product or may add the shortfall quantity to the next Shipment of Product due for delivery.

5

          9. Term and Termination.

          9.1. The term of this Agreement shall begin on the Effective Date and unless previously terminated as hereinafter set forth, shall remain in force for a period of six Years beginning with the First Shipment Date.

          9.2. Each Party may, at its discretion, upon written notice to the other Party, and in addition to its rights and remedies provided under this Agreement or any other agreement executed in connection with this Agreement and at law or in equity, terminate this Agreement in the event of any of the following:

               9.2.1. Upon a material breach of the other Party of any material provision in this Agreement, and failure of the other Party to cure such material breach within [****] calendar days after written notice thereof; provided, however, that such cure period shall not (i) apply to any termination pursuant to Section 9.2.2 or 9.2.3; or (ii) modify or extend the [****] calendar day cure period for NITOL’s delivery obligations pursuant to Section 3.3 above; and provided, further that such [****] calendar day cure period shall not apply to ESLR’s failure to make any payment to NITOL pursuant to this Agreement. In the event of ESLR’s failure to make payment on the [****] calendar day payment terms set forth in Section 5.4 hereof, termination by NITOL shall require the issuance of a written notice of default containing the threat of immediate termination if payment is not made within an additional period of not less than [****] calendar days.

               9.2.2. Upon the voluntary or involuntary initiation of bankruptcy or insolvency proceedings against the other Party; provided, that for an involuntary bankruptcy or insolvency proceeding, the party subject to the proceeding shall have [****] Business days within which to dissolve the proceeding or demonstrate to the terminating Party’s satisfaction the lack of grounds for the initiation of such proceeding;

               9.2.3. If the other Party (i) becomes unable, or admits in writing its inability, to pay its debts generally as they mature, (ii) becomes insolvent (as such term may be defined or interpreted under any applicable statute); or

               9.2.4. In accordance with the provisions of Section 11 below.

          9.3. Without limiting the foregoing, ESLR shall have the right to terminate this Agreement, effective upon written notice to NITOL, in the event of the First Shipment Date not occurring on or before [****].

          9.4. NITOL shall have the right to terminate this Agreement if ESLR fails to pay the Deposit or any part thereof to NITOL within [****] Business days after the due date.

          9.5. Upon the expiration or termination of this Agreement howsoever arising the following Sections shall survive such expiration or termination: Sections 1 (Definitions); Section 10 (Liability); Section 11 (Force Majure); and Section 12 (General Provisions).

          9.6. If ESLR terminates this Agreement pursuant to Section 9.2.1, 9.2.2, 9.2.3, or 11 then NITOL shall within [****] Business days of the date of receipt of a valid termination notice issued by ESLR reimburse to ESLR any part of the Deposit that has not been applied against the price of Product delivered to ESLR or any other payment due to NITOL from ESLR; provided however that if ESLR is in breach of this Agreement at the time it terminates this Agreement, [****].

          9.7. In the event that NITOL terminates this Agreement it shall be entitled to hold any Deposit already paid by ESLR and not applied by NITOL to full or part payment of any sum due to NITOL pursuant to the Agreement, until such time as NITOL calculates its reasonable loss arising from ESLR’s breach; such calculation to occur within [****] calendar days. NITOL shall then set-off against the retained Deposit the amount of such loss. To the extent NITOL’s loss is not extinguished by the retained Deposit, any balance may be claimed from ESLR. Any balance of the Deposit remaining after the set off will be repaid to ESLR.

6

          10. Liability.

          10.1. In no event shall either party be liable for indirect, special, incidental or consequential damages or for exemplary or punitive damages, even if ESLR or NITOL has been advised of the possibility of such damages.

          11. Force vMajeure.

          11.1. Neither Party to this Agreement shall be liable for any delay in performing or failure to perform its obligations due to events beyond the reasonable control of the parties including but not limited to war, blockade, revolution, riot, insurrection, strike or lockout, explosion, fire, flood, storm, tempest, earthquake, regulations or orders of government authorities, including but not limited to prohibition of export or import and/or any other cause or causes beyond reasonable control of NITOL or ESLR whether or not similar to the causes enumerated above (“Force Majeure”). For the purposes of this Agreement, any event or occurrence of Force Majeure shall not exclude ESLR’s obligation to pay any sum of money when due for shipments made prior to the Force Majeure event. Failure to deliver or to accept delivery in whole or in part because of the occurrence of an event of Force Majeure shall not constitute a default hereunder or subject either Party to liability for any resulting loss or damage.

          11.2. Upon the occurrence of any event of Force Majeure, the Party affected by the event of Force Majeure shall within [****] Business days of it becoming aware that the occurrence thereof will or is likely to affect the performance by such Party of its obligations hereunder notify the other Party hereto in writing of such event and shall specify in reasonable detail the facts constituting such event of Force Majeure. Where such notice is not given within the time required, Force Majeure shall not justify the non-fulfillment of any obligations under this Agreement.

          11.3. Both Parties agree to use their respective reasonable efforts to cure any event of Force Majeure to the extent that it is reasonably possible to do so, it being understood that the settlement of strikes, lockouts, and any other industrial disputes shall be within the sole discretion of the Party asserting Force Majeure.

          11.4. During the continuation of such force majeure, NITOL shall use [****] efforts to allocate its actual production output to each of its customers, including ESLR, on a pro rata basis based on NITOL’s total contractual obligations to supply each such customer during the respective period. If the Force Majeure applies for a period of more than [****] consecutive calendar months, then the Party that did not declare the force majure shall be entitled to terminate this Agreement by written notice to the other Party. Upon such termination, any remaining Deposit shall be refunded to ESLR.

          12. General Provisions.

          12.1. This Agreement shall be construed under and governed by English Law.

          12.2. Dispute Resolution

12.2.1. Any dispute arising out of or in connection with this Agreement, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the London Court of International Arbitration (LCIA) Rules, which Rules are deemed to be incorporated by reference into this Section.

12.2.2. The number of arbitrators shall be three.

12.2.3. The arbitrators shall have a working knowledge of Russian.

7

12.2.4. The seat, or legal place, of arbitration shall be London, England.

12.2.5. The language to be used in the arbitral proceedings shall be English.

12.2.6. The parties undertake to keep confidential all awards in any arbitration, together with all materials in the proceedings created for the purpose of the arbitration and all other documents produced by another party in the proceedings not otherwise in the public domain - save and to the extent that disclosure may be required of a party by legal duty, to protect or pursue a legal right or to enforce or challenge an award in bona fide legal proceedings before a state court or other judicial authority.

12.2.7. Parties may submit documents in Russian and in English, but in the event of any discrepancy arising between the Russian and English versions of a document, the English version shall prevail.

          12.3. Neither NITOL nor ESLR may assign this Agreement to a third party without the prior written consent of the other party, which consent shall not be unreasonably withheld. Notwithstanding the foregoing, either party may assign this Agreement in connection with a merger, acquisition, or sale of all or substantially all of the assets or capital stock of such party without the consent of the other party. If this Agreement is assigned effectively to a third party, this Agreement shall bind upon successors and assigns of the parties hereto. However, should the successors for any reason fail to fulfill their obligations with respect to this Agreement, the Parties shall remain responsible with respect to any provision within this Agreement.

          12.4. Except as provided elsewhere in this Agreement, a notice is effective only if the Party giving or making the notice has complied with this Section 12.4 and if the addressee has received the notice. A notice is deemed to have been received as follows:

(a)	If a notice is delivered in person, or sent by registered or certified mail, or nationally or internationally recognized overnight courier, upon receipt as indicated by the date on the signed receipt;
(b)	If a notice is sent by facsimile, upon receipt by the Party giving the notice of an acknowledgment or transmission report generated by the machine from which the facsimile was sent indicating that the facsimile was sent in its entirety to the addressee’s facsimile number; or
(c)	If a notice is sent by e-mail, upon receipt by the Party giving the notice of an acknowledgement or transmission report indicating that the e-mail was sent in its entirety to the addressee’s e-mail address.

Each Party giving a notice shall address the notice to the appropriate person at the receiving Party at the address listed below or to a changed address as the Party shall have specified by prior written notice:

ESLR:

EVERGREEN SOLAR, INC.
138 Bartlett Street
Marlborough, MA 01752 USA
Attn: Richard Chleboski, Vice President
E-mail: rchleboski@evergreensolar.com
Facsimile: (508) 463-1361

NITOL:

SOLARICOS TRADING LIMITED

8

70 JF Kennedy Avenue, Papabasiliou House,
1st floor, Nicosia 1076, Cyprus.

FOR THE ATTENTION OF
Director: Khomchenko Evgenia

EMAIL: homchenko@nitol.ru
FAX: +357 22493000

COPY TO:

NITOL GROUP
3A, Krasnokazarmennaya St.,
111250, Moscow, Russia

FOR THE ATTENTION OF
Commercial Director: Zaitsev Vadim
Executive assistant: Kazantseva Larisa

EMAIL: zaitsev@nitol.ru, kazantseva@nitol.ru
Tel: +7 (495) 741-00-00
Fax: +7 (495) 995-56-78

          12.5. The waiver by either Party of the remedy for the other Party’s breach of or its right under this Agreement will not constitute a waiver of the remedy for any other similar or subsequent breach or right.

          12.6. If any provision of this Agreement is or becomes, at any time or for any reason, unenforceable or invalid, no other provision of this Agreement shall be affected thereby, and the remaining provisions of this Agreement shall continue with the same force and effect as if such unenforceable or invalid provisions had not been inserted in this Agreement.

          12.7. No changes, modifications or alterations to this Agreement shall be valid unless reduced to writing and duly signed by respective authorized representatives of the Parties.

          12.8. No employment, agency, trust, partnership or joint venture is created by, or shall be founded upon, this Agreement. Each Party further acknowledges that neither it nor any Party acting on its behalf shall have any right, power or authority, implied or express, to obligate the other Party in any way.

          12.9. Neither Party shall make any announcement or press release regarding this Agreement or any terms thereof without the other Party’s prior written consent; provided, however, that the Parties will work together to issue a joint press release within two (2) Business days after the Effective Date. Notwithstanding the foregoing, either Party may publicly disclose the material terms of this Agreement pursuant to the United States Securities Act of 1933, as amended, the United States Securities Exchange Act of 1934, as amended, or other applicable law; provided, however, that the Party being required to disclose the material terms of this Agreement shall provide reasonable advance notice to the other Party, and shall use commercially reasonable efforts to obtain confidential treatment from the applicable governing entity for all pricing and technical information set forth in this Agreement.

          12.10. This Agreement constitutes the entire agreement between the Parties and supersedes all prior proposal(s) and discussions, relative to the subject matter of this Agreement and neither of the Parties shall be bound by any conditions, definitions, warranties, understandings or representations with respect to such subject matter other than as expressly provided herein. This Section 12.10 shall not apply to any warranty, representation or

9

statement made fraudulently. No oral explanation or oral information by either party hereto shall alter the meaning or interpretation of this Agreement.

          12.11. The headings are inserted for convenience of reference and shall not affect the interpretation and or construction of this Agreement.

          12.12. Words expressed in the singular include the plural and vice-versa.

          12.13. It is the intention of the Parties that no term of this Agreement may be enforced by any person who is not a party to this Agreement (a “third party”) notwithstanding that any such term of this Agreement may purport to confer, or may be construed as conferring, any benefit on such third party and irrespective of whether such third party is identified in this Agreement. The Contracts (Rights of Third Parties) Act 1999 shall not apply to any provisions of this Agreement.

12.14 As a condition precedent to this Agreement, legal counsel for NITOL shall furnish an opinion to ESLR to the satisfaction of ESLR, in the form set forth in Appendix 4.

10

IN WITNESS WHEREOF, the Parties have executed this Supply Agreement as of the date first set forth above.

ESLR:		NITOL:
EVERGREEN SOLAR, INC.		NITOL MATERIALS, INC.
By:	/s/ Richard G. Chleboski	By:	/s/ Khomchenko Evgenia
Name:	Richard G. Chleboski	Name:	Khomchenko Evgenia
Title:	Vice President	Title:	Director
Authorized Signatory		Authorized Signatory

11

Appendix 1

Pricing Schedule

Planned Delivery Period	Quantity	Price / kg
2009	[****] MT	[****]
2010	[****] MT	[****]
2011	[****] MT	[****]
2012	[****] MT	[****]
2013	[****] MT	[****]
2014	[****] MT	[****]
TOTALs	[****] MT	[****] M$

12

Appendix 2

Product Specifications

[****]

Product PACKING Specifications

Weight	[****]
Inner Packing	[****] labelled with indication of manufacturer, net weight, lot number and quality control confirmation.
Outer Packing	Pallets and carton or wooden boxes suitable for long distance transportation; each pallet labelled with pallet number, indication of manufacturer, net and gross weight, lot number(s), delivery number.
Packing List	For each delivery transmitted per Fax or E-mail with delivery number, number of pallets, for each pallet: pallet number, net and gross weight and lot number(s),

13

Appendix 3
Testing Procedures

– Product Specifications shall be tested in accordance with the following procedures: [****]

Third Party Inspector:

Fraunhofer Institute for Solar Energy Systems (ISE), Heidenhofstrasse 2, 79110 Freiburg.

14

Appendix 4

Pursuant to Section 12.14 of the Agreement, legal counsel for NITOL shall furnish an opinion to ESLR to the effect that:

(i)	NITOL is validly existing as a company and in good standing under the laws of the country of its incorporation,
(ii)	NITOL has the corporate power to execute and deliver the Agreement and to perform its obligations hereunder;
(iii)	NITOL has duly authorized, executed and delivered the Agreement, and such Agreement constitutes its valid and binding obligations enforceable against it in accordance with its terms,
(iv)	the execution and delivery by NITOL of the Agreement does not and the performance by it of its obligations thereunder will not (A) violate any applicable international, national or local law or any applicable law governing the Agreement, (B) violate any court order, judgment or decree, (C) result in a breach of, or constitute a default under, any contractual obligation or agreement of NITOL, or (D) violate any of its organic documents (charter, by-laws, etc),
(v)	no consent, approval, license or exemption by, order or authorization of, or filing, recording or registration with any applicable governmental authority is required to be obtained or made by NITOL in connection with its execution and authorization of the Agreement or the performance by it of its obligations thereunder,
(vi)	there is no pending litigation or in any litigation that is overtly threatened, that challenges the validity or enforceability of, or seeks to enjoin the performance of, the Agreement,
(vii)	Neither NITOL or any of its assets is entitled to immunity from suit, execution, attachment or other legal process,
(viii)	no deduction or withholding (whether on account of tax or otherwise) will be required from any payment by NITOL under this Agreement,
(ix)	this Agreement is in proper legal form for enforcement against NITOL in the country of its incorporation and contains no provision which is contrary to law or public policy in such country or which would for any reason not be upheld by the courts in such country,
(x)	the choice of English Law to govern this Agreement is valid and would be recognised and given effect to by the courts in the country of incorporation of NITOL, and
(xi)	the agreement to refer all disputes arising out of or in connection with this Agreement to arbitration under the London Court of International Arbitration in London is valid and irrevocable. Any determination or judgment obtained against NITOL through such arbitration in respect of any sum payable by NITOL or other dispute would be recognized and enforced by the courts in the country of incorporation of NITOL without re-examination of the issues

15

EX-10.35

Exhibit 10.35

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been omitted pursuant to a request for confidential treatment and, where applicable, have been marked with an asterisk (“[****]”) to denote where omissions have been made. The confidential material has been filed separately with the Securities and Exchange Commission.

FINAL October 25, 2007

MEMORANDUM OF UNDERSTANDING

     THIS MEMORANDUM OF UNDERSTANDING (the “MOU”) is entered into as of October 25, 2007 by and among Evergreen Solar, Inc., a corporation organized under the laws of Delaware, USA (“ESLR”), Q-Cells AG, a stock corporation organized under the laws of Germany (“QC”), Renewable Energy Corporation ASA, a stock corporation organized under the laws of Norway (“REC”, and together with ESLR and QC, the “Parents”), and EverQ GmbH, a limited liability company organized under the laws of Germany (“EQ”). Each of the Parents respectively and EverQ may individually hereinafter sometimes be referred to as “a Party” and collectively as “the Parties”). Capitalized terms used herein shall have the definitions set forth in Section A of this MOU.

R E C I T A L S:

     WHEREAS, EQ was organized by the Parents to manufacture solar wafers, cells and panels for commercial and residential solar electric systems utilizing ESLR’s String Ribbon Technology;

     WHEREAS, in accordance with the business plan developed and approved by the Parties the “Business Plan”), the Parents desire that EQ become a stand-alone company, focused on low-cost manufacturing, with its own personnel to perform the marketing, sales, production, engineering, research and design and general and administrative functions of the business, and an enhanced expanded management team;

     WHEREAS, in approving the Business Plan, the Parents and the management of EQ have determined that EQ should complete an IPO as soon as practicable and thereafter endeavor to expand its production capacity to 600 MW;

     WHEREAS, EQ will need to secure a supply of polysilicon for its continued production of solar panels and for the expansion of its production capacity, and REC desires to grant EQ an option to enter into a polysilicon supply agreement;

     WHEREAS, certain rights and obligations under the existing licensing agreement between ESLR and EQ related to the String Ribbon Technology, including both the Gemini String Ribbon Technology and the Quad/COF Technology will need to be amended and modified to enable EQ’s operation as a stand-alone business;

     WHEREAS, other amendments and modifications to existing agreements among the Parties will need to be made in connection with the proposed strategic changes in EQ’s business operations; and

FINAL 2 October 25, 2007

     WHEREAS, EQ will need additional financial resources and other assistance to rapidly position EQ as a worldwide leader in the manufacture of low cost solar panels;

     NOW, THEREFORE, in consideration of the foregoing premises and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows:

     A. Definitions. For purposes of this Agreement, the following terms have the meaning set forth below:

     “Actual Base Rate” shall have the meaning as set forth in Section F.II.3.

     “Actual Quad Cost” shall have the meaning as set forth in Section F.II.3.

     “Added Value” shall have the meaning as defined in the LTTA.

     “Additional SR Technology” shall have the meaning as set forth in Section G.I.

     “Banks” shall have the meaning as set forth in Section J.II.

     “Base Rate” shall have the meaning as set forth in Section F.II.1.

     “Business Plan” shall have the meaning as set forth in the Recitals to this MOU.

     “Commercial Improvements” shall mean any patentable improvement or patentable development arising from the String Ribbon Technology that reduces the production costs or increases the output, effectiveness, utility or value of the Licensed Products.

     “Cost Savings” shall have the meaning as defined in the LTTA, however, taking into account the specifics in the MOU.

     “Declining Factor” shall have mean the factor multiplied by the Base Rate in the 2^nd through 8^th years of production pursuant to Section 4.1(f)(i) of the LTTA.

     “End of First Year” shall have the meaning as set forth in Section F.II.1.

     “EQ 2 Cost Base” shall have the meaning as set forth in Section F.II.1.

     “EQ 2” shall mean the existing production facilities of EQ as of the date of this Agreement using the string ribbon technology licensed from ESLR.

     “EQ 3” shall mean the planned expansion of EQ with a capacity of further 75 MW based on the Quad/COF Technology.

     “First Year” shall have the meaning as set forth in Section F.II.1.

     “Full Production” shall have the meaning as set forth in Section F.II.1.

FINAL 3 October 25, 2007

     “Gemini Compensation Value” shall have the meaning as set forth in Section E.IV.

     “Gemini Right” shall have the meaning as set forth in Section E.I.

     “Gemini String Ribbon Technology” shall mean the String Ribbon Technology as used in EQ 2 as of the date of this MOU.

     “Improved Gemini String Ribbon Technology” is the Gemini String Ribbon Technology and all Commercial Improvements made to Gemini String Ribbon Technology by ESLR that are available as of the IPO.

     “IPO” shall have the meaning as set forth in Section J.I.

     “Licensed Products” shall have the meaning as defined in the LTTA, however, taking into account the specifics in the MOU.

     “LTTA” is the Amended and Restated License & Technology Transfer Agreement By and Between ESLR and EQ as of September 29, 2006.

     “MNIP” shall have the meaning as defined in the LTTA, however, taking into account the specifics in the MOU.

     “MOU” shall mean this Memorandum of Understanding.

     “Nominal Output” shall have the meaning as set forth in Section F.II.1.

     “Nominal Savings” shall have the meaning as set forth in Section F.II.2.

     “Parties” are ESLR, QC, REC and EQ.

     “Quad/COF License” shall have the meaning as set forth in Section F.I.

     “Quad/COF Technology” meaning the Quad ribbon process of ESLR for producing silicon wafers including Cut on the Fly as such technology exists at the time the final Quad/COF License agreement between EQ and ESLR is entered into pursuant to this MOU.

     “Quad Cost Savings” shall have the meaning as set forth in Section F.II.1.

     “Ramp Up Period” shall have the meaning as set forth in Section F.II.1.

     “Royalty Rate Quad” shall have the meaning as set forth in provision Section F.II.1.

     “Silicon Offer” shall have the meaning as set forth in Section D.I.

     “Spreadsheet” shall have the meaning as set forth in Section F.II.3.

FINAL 4 October 25, 2007

     “Start of Full Production” shall have the meaning as set forth in Section F.II.1.

     “String Ribbon Technology” shall have the meaning as defined in the LTTA as “String Ribbon” and “Technology”.

     B. General.

     I. Announcement. EQ will, concurrently with signing this MOU, announce that the construction of EQ 3 has been approved by the Supervisory Board of EQ and that completion of an IPO of EQ is an objective of the Parents.

     II. Name Change. EQ will shortly thereafter change its name to a name not associated with the names of any of the Parents. With announcement of a new name of EQ, the re-branding of EQ shall commence. Initially the re-branding of its products will be achieved by labeling the existing products with the new EQ name to the extent such products will not be used to satisfy orders outstanding under sales agreements entered into by ESLR prior to the date of this MOU.

     III. License Concerns. One or more definitive license agreement(s) regarding the licenses contemplated by this MOU (or an amendment and restatement of the LTTA) shall be negotiated in good faith by the parties following the date of this MOU. In the case of the license of the Quad/COF Technology granted effective on the date of this MOU, until such time as (a) definitive agreement(s) has been entered into (or amendment and restatement of the LTTA has been effected), the terms of the LTTA, to the extent they are not inconsistent with the terms of the Quad/COF Technology license set forth in this MOU shall apply to the license of such technology. All licenses granted in accordance with this MOU shall include all associated Technical Deliverables as defined in the LTTA.

     IV. Access to Suppliers. For one year after the IPO, except for standard purchase agreements with suppliers, neither ESLR nor EQ will enter into exclusive supply agreements with suppliers of string ribbon related wafer furnaces and string if such suppliers could otherwise provide such furnaces and string to the other party. EQ and ESLR will cooperate to negotiate in good faith a capacity plan with their string manufacturer to secure supply for the expansion plans for both companies.

     C. Governance Changes. By 30 June 2008, if the Parents have not unanimously agreed to have EQ abandon its efforts to complete an IPO, the Supervisory Board shall consist of three representatives of the employees of EQ, one representative of each Parent and 3 independent directors who shall be individuals (i) who are not affiliated with any of the Parents or EQ, (ii) with relevant industry experience and (iii) who are capable of serving as directors of a publicly-traded company. Each Parent will nominate one independent director and the other Parents agree to elect each independent director so nominated. Should the IPO be cancelled/abandoned, the Parents agree to return to a Supervisory Board that consists of 3 employee representatives and 2 directors elected by each Parent.

FINAL 5 October 25, 2007

     D. Silicon Supply.

     I. REC hereby offers EQ a further take or pay polysilicon supply agreement to provide EQ with sufficient polysilicon through 2015 to meet the production needs for expanding EQ up to annual production capacity of at least 600 MW by 2012 (the “Silicon Offer”).

     II. The commercial key parameters of the Silicon Offer shall be as follows:

     1. Volume:

	2010	2011	2012	2013	2014	2015
New Contract Volume	[****]t	[****]t	[****]t	[****]t	[****]t	[****]t

     2. Pricing (New contract Volume):

	2010		2011		2012		2013		2014		2015
Pricing for New Volume (USD/kg)		[****]		[****]		[****]		[****]		[****]		[****]

     3. Prepayment:

EQ shall provide REC with a prepayment of USD [****] Million, this amount is equivalent to the last 12 months payable under the contract, based upon take or pay delivery of [****] MT at [****] USD/kg. The prepayment will be paid from the proceeds of the IPO. In recognition of this pre-payment, REC will discount the purchase price of polysilicon in the following fashion:

	2010		2011			2012			2013			2014			2015
Discount		—		[****]	%		[****]	%		[****]	%		[****]	%		[****]	%

     III. EQ has the right to accept the Silicon Offer during a period of six months commencing on the date of this MOU. Acceptance shall be effected by providing written notice to REC. If EQ does not accept the Silicon Offer during this six-month period, the Silicon Offer shall automatically be deemed withdrawn, and no subsequent acceptance by EQ shall have any binding effect on REC. Neither QC nor ESLR have the right to claim the benefits of the Silicon Offer.

     IV. Upon acceptance, EQ and REC will prepare, negotiate and execute in good faith the full silicon contract according to the terms laid out in this MOU. The full silicon contract between EQ and REC shall be in substantially in the same form as the Second REC Supply Agreement dated as of September 29, 2006, except for the volume, pricing and prepayment terms described above.

FINAL 6 October 25, 2007

     V. The Silicon Offer, although it may be accepted prior to an IPO, is not valid and will not be executed upon unless and until an IPO or any other exit, mutually agreed between the Parents and allowing the Parents to sell shares, has taken place. For the avoidance of doubt, no shipment of polysilicon from REC to EQ shall take place under any supply agreement resulting from EQ’s acceptance of the Silicon Offer until the occurrence of an IPO or another exit, mutually agreed between the Parents and allowing the Parents to sell shares. In no event shall the Silicon Offer be valid if an IPO or another exit, mutually agreed between the Parents and allowing the Parents to sell shares, does not take place before December 31, 2009. Regardless of whether the IPO or another exit takes place before December 31, 2009, the current agreements between the Parties regarding the supply of polysilicon to EQ by REC shall remain in place in accordance with their terms.

     E. Gemini String Ribbon License.

     I. At the IPO, or at any other exit, mutually agreed between the Parents and allowing the Parents to sell shares, ESLR will grant to EQ an irrevocable, non-exclusive, perpetual, world-wide, non-transferable, royalty-free, without the right to sublicense (except as set forth below), license to make, but not have made, Licensed Products based on the Gemini String Ribbon Technology and all Commercial Improvements made to Gemini String Ribbon Technology by ESLR that are available as of the IPO (such license rights related to the Gemini String Ribbon Technology, the “Gemini Right”).

     II. EQ is only entitled to sublicense the Gemini String Ribbon Technology as well as the Commercial Improvements made by ESLR to the Gemini String Ribbon Technology, without the right to sublicense further, to its future wholly owned affiliates as well as future affiliates in which EQ holds [****]. EQ shall continue to hold [****] of the equity in such affiliate for at least five years after commencement of the sublicensing agreement with such affiliate. EQ can only sublicense the Gemini String Ribbon Technology to its affiliates for use in countries where enforceable patent protection exists in favor of ESLR or in which there are pending patent application for the String Ribbon Technology. Further sublicensing by EQ to other territories or other affiliates will be considered by ESLR on a case-by-case basis with full discretion to permit or forbid such sublicensing if ESLR determines that there is an unreasonable risk of violation of the intellectual property rights related to the String Ribbon Technology. In any case of sublicensing of the Gemini String Ribbon Technology, ESLR will not receive any additional royalty.

     III. EQ is entitled to improve the Gemini String Ribbon Technology as well as the Improved Gemini String Ribbon Technology and shall provide ESLR with a world-wide, non-exclusive, perpetual, irrevocable, sublicenseable royalty bearing right to make and have made license to any Commercial Improvements to the Gemini String Ribbon Technology as well as to the Improved Gemini String Ribbon Technology. The calculation of the royalty rate shall be made according to Section G.III.2. ESLR will pay EQ royalties from first sublicensing or further sublicensing by the first sublicensee (or stipulate that sublicensors pay such royalties directly to EQ) based on the same terms as

FINAL 7 October 25, 2007

if the volume manufactured and sold by the first sublicensee or any further sublicensee of the first sublicensee had been manufactured and sold by ESLR. The amount of the royalties or other consideration received by ESLR from its sublicensees for the Gemini String Ribbon Technology and/or Improved Gemini String Ribbon Technology shall not affect the royalty payment made by ESLR to EQ for such sublicenses.

     IV. ESLR shall be compensated by EQ for granting EQ the Gemini Right. The value of this compensation (the “Gemini Compensation Value”) shall be [****] million USD and shall be paid by EQ in cash to ESLR once EQ has received the proceeds of the IPO, or after any other exit, mutually agreed between the Parents and allowing the Parents to sell shares, has taken place,

     V. All royalty payments for Gemini String Ribbon Technology paid under the LTTA from EQ to ESLR from January 1, 2008 until the IPO shall be credited against the Gemini Compensation Value, reducing the Gemini Compensation Value respectively. After full payment according to Sections E.IV. and E.V., EQ is not obliged to pay any further royalties for the Gemini Right.

     VI. During the five-year period following the IPO, or following any other exit, mutually agreed between the Parents and allowing the Parents to sell shares, under no circumstances shall the technology developments and improvements by EQ or ESRL and any of their respective affiliates and/or first and further sub-licensees of the Gemini String Ribbon Technology (including any Commercial Improvements thereto) block or prevent further technology development of the Gemini String Ribbon Technology (including any Commercial Improvements thereto) by EQ or ESLR. In no event shall this provision require EQ or ESLR or any of its their respective affiliates and/or sub-licensees to disclose or share technology developments or improvements of the Gemini String Ribbon Technology (including any Commercial Improvements thereto) unless such technology developments and improvements are Commercial Improvements which are subject to the cross-license requirements provided for in this MOU.

     F. Quad/COF License.

     I. Effective as of the date of this MOU, EQ is entitled to an irrevocable, non-exclusive, perpetual, world-wide, non-transferable, royalty-bearing, without the right to sublicense (except as defined below), license to make, but not have made, Licensed Products based on the Quad/COF Technology from ESLR as well as all Commercial Improvements ESLR makes to the Quad/COF Technology at any time after the date of this MOU until five years after the IPO, or until five years after any other exit, mutually agreed between the Parents and allowing the Parents to sell shares (the “Quad/COF License”).

     II. The royalty payable by EQ to ESLR for the Quad/COF License shall be based on Royalty Rate Quad and the royalty rate for Commercial Improvements to the Quad/COF Technology (see Section F.II.5 below) which shall be determined by the

FINAL 8 October 25, 2007

principles stated in Section 4.1(f) of the LTTA unless determined otherwise in this Section F.

     1. The following shall apply:

• Quad/COF Technology is accepted as MNIP by all Parties.

• EQ shall pay ESLR a royalty equal to the respective Royalty Rate Quad multiplied by units (one unit being one Wp) manufactured and sold by EQ for the relevant calculation period.

• “Royalty Rate Quad” = Base Rate x Declining Factor.

• The “Base Rate” as defined in Section 4.1(f)(i) of the LTTA shall be set at [****] as in the LTTA) of the Quad Cost Savings (as defined below) without giving any additional consideration to the Added Value component stated in the LTTA (i.e. 0% of the Added Value).

• The Cost Savings generated by Quad/COF Technology (the “Quad Cost Savings”) will be equal to the difference between actual costs at EQ 2 (the “EQ 2 Cost Base”) and the Actual Quad Cost (as defined below) for the same time period. The Parties agree that the EQ 2 Cost Base shall be calculated based on the spreadsheet attached hereto as Exhibit A (the “Spreadsheet”), which shall be used as a modifiable model for the calculation of the EQ 2 Cost Base, taking into account that the Parties will improve the Spreadsheet if its economic assumptions or methodology are incorrect or in conflict with the actual costs related to EQ 2 and any other relevant factors that need to be considered in order to determine the cost of operations at EQ 2 (as reviewed below in connection with the Actual Quad Cost calculation under Section F.II.3.). The calculation of Quad Cost Savings is not intended to take into account circumstances other than the cost savings generated by the implementation Quad/COF Technology and such other circumstances therefore should not be factored into the Spreadsheet used to calculate the EQ 2 Cost Base or otherwise result in an increased Quad Costs Savings amount. There will be no further changes in the EQ 2 Cost Base once calculated.

• In accordance with Section 4.1(f)(i) of the LTTA the Royalty Rate Quad during the First Year equals the Base Rate, the Royalty Rate Quad for the 2^nd year equals [****] x Base Rate and so forth based on the Declining Factor. However, the Royalty Rate Quad for the time starting once ESLR has provided EQ with the Quad/COF

FINAL 9 October 25, 2007

Technology until commencement of the First Year (“Ramp Up Period”), shall also equal the Base Rate.

•

The “First Year” shall be the twelve-month period commencing at the first day of the Start of Full Production (as defined below) . EQ shall be at full production when the average of the running production over the period of three calendar months exceeds [****] % of the Nominal Output (“Nominal Output”) for the first time (“Full Production”). The Nominal Output shall mean [****]. The first of the [****] calendar months shall be the “Start of Full Production”. Twelve months after the first day of the Start of Full Production shall mark the end of the first year of Full Production (“End of First Year”).

     2. The royalty paid by EQ to ESLR for the Quad/COF License during the Ramp Up Period and the First Year shall be an agreed nominal royalty. The Parties agree that the nominal cost savings value due to Quad/COF Technology compared to Gemini String Ribbon Technology (“Nominal Savings”) shall be [****] €/Wp resulting in a Base Rate of [****] €/Wp based on the formula stated above in Section F.II.1.

     3. In the last 3 months prior to the End of First Year using Quad/COF Technology the “Actual Quad Cost” will be calculated by taking the average performance of the Quad/COF Technology in EQ 3 during this time period as the inputs to the Spreadsheet, which shall be used as a modifiable model for the calculation of the Actual Quad Cost (as stated above for the EQ 2 Base Cost calculation under Section F.II.1.) and shall take into account the following key cost drivers:

1. [****]

The Quad Cost Savings times [****]% shall be the “Actual Base Rate”. On the basis of the Actual Base Rate the actual royalty for the Ramp Up Period and the First Year shall be recalculated and the difference between nominal royalty and actual royalty shall be either reimbursed by ESLR or paid to ESLR. The Base Rate going forward shall be the Actual Base Rate times the Declining Factor starting from 2^nd year of full scale production. To ensure the efficacy of the Quad Cost Savings amount used to determine the Actual Base Rate, the production costs of EQ 3 using Quad/COF Technology for the last [****] months of the First Year will be compared to the production costs of ESLR using Quad/COF Technology during the same period and the performance immediately prior to the and immediately after the such [****]-month period.

As a possible secondary data point for determination of the Quad Cost Savings and to facilitate the comparison of the Gemini String Ribbon Technology and

FINAL 10 October 25, 2007

Quad/COF Technology, EQ shall run wafers produced on the basis of the Gemini String Ribbon Technology through the EQ factory using Quad/COF Technology.

4. The Royalty Rate Quad is subject to the following adjustments only:

• If at the time the Quad Cost Savings is calculated the Quad/COF Technology implemented at EQ performs noticeably worse compared to Quad/COF Technology implemented at ESLR during the same period, which ESLR can reasonably document, and the Actual Quad Cost realized at EQ is significantly lower, than the Actual Quad Cost that could have been realized if the Quad/COF Technology implemented at EQ had performed as well as the Quad/COF Technology implemented at ESLR (such performance at ESLR, the “Potential Quad Cost”), ESLR can request once that the Actual Quad Cost be set equal to the Potential Quad Cost. The difference between (a) the Potential Quad Cost and (b) the EQ 2 Base Cost shall be multiplied times [****] % to determine the Base Rate, which Base Rate shall subsequently be reduced based on the Declining Factor.

• The Parties agree that, when introduced to EQ by ESLR, additional improvements to the Quad/COF Technology which are expected to result in (a) additional reductions in wafer thickness and (b) improved after heater performance, will be considered MNIP when such improvements are implemented at EQ, and the Cost Savings generated at EQ by the applicable improvement calculated according to Section F.II.3. shall result in an increase in the royalty paid by EQ to ESLR for the Quad/COF Technology. The Declining Factor for the calculation of the Royalty Rate Quad shall be equal to the Declining Factor used for the calculation of Royalty Rate Quad in the same time period, e.g. if advancements resulting in additional wafer thickness reductions of after heater functionality is in use by EQ in the year after the End of First Year, the Declining Factor shall be [****] and will be reduced by [****] % in each further year.

• Provided that the sum of (1) the actual production costs of EQ using Quad/COF Technology and (2) the royalty paid to ESLR exceeds in any given calendar year the actual average production costs of REC or QC for conventional sliced crystalline silicon, then the royalty can be reduced in accordance with Article 4.1f (vii) of the LTTA. If this sum exceeds the actual average production costs, EQ can request, and ESLR is obliged to accept, a reduction of the Royalty Rate Quad to a level such that the sum of EQ’s production costs and the Royalty Rate Quad are equal to the average

FINAL 11 October 25, 2007

production costs of conventional sliced crystalline silicon of REC or QC, but the level of the Royalty Rate Quad shall never go below zero. The request can be made once every calendar year by EQ supported either by REC or QC provided that the supporting party must own [****]% or more of the outstanding shares of EQ at the time the request is made. The actual average production costs used to evaluate such request shall include the average production costs of each of REC or QC only if the applicable party owns 10% or more of the outstanding shares of EQ at the time the request is made. To prove the actual average production costs of REC or QC, as applicable, a statement of an independent auditor has to be presented showing the respective average productions costs evaluated by the auditor. The auditor has to treat all information confidentially and shall not disclose any figures or other type of information except the evaluated result.

•

The adjustments to the Royalty Rate Quad set forth in this Section F.II.4. first and second bullet point shall be determined following from a recalculating of the Actual Quad Cost. In no event will the EQ 2 Base Cost be recalculated.

5. The calculation of the royalty rate for any Commercial Improvements to the Quad/COF Technology developed after the date of this MOU shall be made according to Section G.III.2.

     III. Effective following the IPO, or following any other exit, mutually agreed between the Parents and allowing the Parents to sell shares, EQ is only entitled to sublicense the Quad/COF Technology as well as the Commercial Improvements made to the Quad/COF Technology by ESLR within five years after the IPO, without the right to sublicense further, to its future wholly owned affiliates as well as future affiliates in which it holds [****]. EQ shall continue to hold [****] of the equity in such affiliate for at least five years after commencement of the sublicensing agreement with such affiliate. EQ can only sublicense the Quad/COF Technology to its affiliates for use in countries where enforceable patent protection exists in favor of ESLR or in which there are pending patent application for the String Ribbon Technology. Further sublicensing by EQ to other territories or other affiliates will be considered by ESLR on a case-by-case basis with full discretion to permit or forbid such sublicensing if ESLR determines that there is an unreasonable risk of violation of the intellectual property rights related to the String Ribbon Technology. As long as EQ holds [****] interest in the applicable sublicensee affiliate, EQ will pay ESLR royalties from sublicensing (or stipulate that sublicensors pay such royalties directly to ESLR) based on the same terms as if the volume manufactured and sold by the sublicensee had been manufactured and sold by EQ. In such case, the amount of the royalties or other consideration received by EQ from its sublicensees for the Quad/COF Technology (with or without any Commercial Improvements thereto) shall not affect the royalty payment made by EQ to ESLR for such sublicenses. If EQ’s ownership of the applicable sublicensee affiliate falls below [****]% at any time before

FINAL 12 October 25, 2007

the end of the applicable five-year period, the right for the respective affiliate regarding the Quad/COF Technology and any Commercial Improvements thereto shall terminate. If EQ’s ownership of the applicable sublicensee affiliate falls below [****]% at any time after the five-year period during which EQ is required to maintain such ownership percentage, all royalties (together with any other payments and the value of other consideration received by EQ in lieu of royalties) in exchange for the right to use the Quad/COF Technology shall be paid to ESLR; provided that in no event shall the royalty paid to ESLR for sublicensed Quad/COF Technology (with or without any Commercial Improvements thereto) be less than the royalty that would have been payable to ESLR by EQ if the same volume of Licensed Products manufactured and sold by the sublicensee had been manufactured and sold by EQ.

     IV. EQ is entitled to improve Quad/COF Technology and shall during the five years after the IPO, or the five years after any other exit, mutually agreed between the Parents and allowing the Parents to sell shares, provide ESLR with a world-wide, non-exclusive, perpetual, irrevocable, royalty bearing (the calculation of the royalty rate shall be made according to the provisions set forth in Section G.III.2) license to any Commercial Improvements. ESLR is entitled to sublicense, without the right to sublicense further, the Commercial Improvements made by EQ to the Quad/COF Technology to its affiliates or third parties in line with, and not worse than, the terms of the license between EQ and ESLR. ESLR will pay EQ royalties from sublicensing (or stipulate that sublicensors pay such royalties directly to EQ) based on the same terms as if the volume manufactured and sold by the sublicensee had been manufactured and sold by ESLR. The amount of the royalties or other consideration received by ESLR from its sublicensees for the Quad/COF Technology (with or without any Commercial Improvements thereto) shall not affect the royalty payment made by ESLR to EQ for such sublicenses.

     V. During the five-year period following the IPO, or following any other exit, mutually agreed between the Parents and allowing the Parents to sell shares, under no circumstances shall the technology developments and improvements by EQ or ESRL and any of its affiliates and/or sub-licensees of the Quad/COF Technology (including any Commercial Improvements thereto) block or prevent further technology development of the String Ribbon Technology (including any Commercial Improvements thereto) by EQ or ESLR. In no event shall this provision require EQ or ESLR or any of its their respective affiliates and/or sub-licensees to disclose or share technology developments or improvements of the Quad/COF Technology (including any Commercial Improvements thereto) unless such technology developments and improvements are Commercial Improvements which are subject to the cross-license requirements provided for in this MOU.

     G. Additional String Ribbon Technology License.

     I. For a period of five years beginning with the IPO, or beginning with any other exit, mutually agreed between the Parents and allowing the Parents to sell shares, ESLR and EQ are obliged to offer to license to each other any Commercial

FINAL 13 October 25, 2007

Improvements to the String Ribbon Technology which are not already subject to Section E or Section F that leads to MNIP, as defined in the LTTA, improvements on the wafer, cell or module manufacturing step or wafer, cell or module performance (“Additional SR Technology”). For clarification purposes, such obligation does not exist for technology that is not related to the String Ribbon Technology for manufacturing string ribbon wafers (i.e. improvements of cell or module manufacturing are excluded from Commercial Improvements which must be offered by either ESLR or EQ to the other Party).

     II. If any license offer required pursuant to Section G.I. is accepted by the other Party, the license from one party to the other shall be world-wide, non-exclusive, perpetual, irrevocable and royalty bearing.

     III. The royalty fee for these individual licenses shall be negotiated at market terms, however the following requirements shall also apply:

     1. [****]

     2. If one party has not granted a license (or is not allowed to sublicense) for a particular Additional SR Technology to any third party, the royalty fee shall be negotiated at arm’s length in line with rates of similar licensing arrangements. The royalty rate shall be initially set at [****]. If the Parties cannot agree on the amount of the [****], EQ and ESLR shall agree on an independent expert who shall determine the [****] according to the provisions mentioned above. If one Party does not accept the result or the Parties cannot agree on the independent expert an arbitration proceeding in accordance with Section 9.8 of the LTTA shall take place.

     3. If one party has not granted a license for a particular Additional SR Technology to any third party at the time of the offer of such particular Additional SR Technology to the other party but grants a license for such a particular Additional SR Technology to any third party afterwards within the five-year period following the IPO, the conditions of the license to the other party shall be amended accordingly if the conditions of the license to such third party are more favorable per the directions under Section G.III.1. above. This amendment shall be on a going forward basis only and in no case will any paid royalties be refunded provided that the one party informs the other party about the conditions of the license to the third party promptly.

     IV. EQ is entitled to sublicense any Additional SR Technology developed by ESLR within five years after the IPO, or within five years after any other exit, mutually agreed between the Parents and allowing the Parents to sell shares, without the right to sublicense further, to its future wholly owned affiliates as well as and future affiliates in which it holds [****]. EQ shall continue to hold [****] of the equity in such affiliate for at least five years after commencement of the sublicensing agreement with such affiliate. EQ can only sublicense the Additional SR Technology developed by ESLR to its

FINAL 14 October 25, 2007

affiliates for use in countries where enforceable patent protection exists in favor of ESLR or in which there are pending patent application for the Additional SR Technology. Further sublicensing by EQ to other territories or other affiliates will be considered by ESLR on a case-by-case basis with full discretion to permit or forbid such sublicensing if ESLR determines that there is an unreasonable risk of violation of the intellectual property rights related to the String Ribbon Technology. As long as EQ holds [****] interest in the applicable sublicensee affiliate, EQ will pay ESLR royalties from sublicensing (or stipulate that sublicensors pay such royalties directly to ESLR) based on the same terms as if the volume manufactured and sold by the sublicensee had been manufactured and sold by EQ. In such case, the amount of the royalties or other consideration received by EQ from its sublicensees for the Additional SR Technology (with or without any Commercial Improvements thereto) shall not affect the royalty payment made by EQ to ESLR for such sublicenses. If EQ’s ownership of the applicable sublicensee affiliate falls below [****]% at any time before the end of the applicable five-year period, the right for the respective affiliate regarding the Additional SR Technology and any Commercial Improvements thereto shall terminate. If EQ’s ownership of the applicable sublicensee affiliate falls below [****]% at any time after the five-year period during which EQ is required to maintain such ownership percentage, all royalties (together with any other payments and the value of other consideration received by EQ in lieu of royalties) in exchange for the right to use the Additional SR Technology shall be paid to ESLR; provided that in no event shall the royalty paid to ESLR for sublicensed Additional SR Technology (with or without any Commercial Improvements thereto) be less than the royalty that would have been payable to ESLR by EQ if the same volume of product manufactured and sold by the sublicensee had been manufactured and sold by EQ.

     V. ESLR is entitled to sublicense any Additional SR Technology developed by EQ, without the right to sublicense further, to its affiliates or third parties. ESLR will pay EQ royalties from sublicensing (or stipulate that sublicensors pay such royalties directly to EQ) based on the same terms as if the volume manufactured and sold by the sublicensee had been manufactured and sold by ESLR. The amount of the royalties or other consideration received by ESLR from its sublicensees for the Additional SR Technology (with or without any Commercial Improvements thereto) shall not affect the royalty payment made by ESLR to EQ for such sublicenses.

     VI. Within the five-year period following the IPO, or following any other exit, mutually agreed between the Parents and allowing the Parents to sell shares, EQ and ESLR are both entitled to improve any Additional SR Technology licensed from each other and must offer each other with a world-wide, non-exclusive, perpetual, irrevocable, royalty bearing license, to any such improvements that constitute Commercial Improvements. Any such Commercial Improvements shall be deemed to be Additional SR Technology and this Section G shall apply to such Commercial Improvements accordingly.

     VI. During the five-year period following the IPO, or following any other exit, mutually agreed between the Parents and allowing the Parents to sell shares, under no

FINAL 15 October 25, 2007

circumstances shall the technology developments and improvements by EQ or ESLR and/or any of its affiliates and/or sub-licensees of the String Ribbon Technology (including any Commercial Improvements thereto) block or prevent further technology development of the string ribbon technology (including any Commercial Improvements thereto) by EQ or ESLR. In no event shall this provision require EQ or ESLR or any of its their respective affiliates and/or sub-licensees to disclose or share technology developments or improvements of the String Ribbon Technology (including any Commercial Improvements thereto) unless such technology developments and improvements are Commercial Improvements which are subject to the cross-license requirements provided for in this MOU.

     I. Sales.

     I. The current sales representative agreement between ESLR and EQ will remain in force until EQ decides it has built up its own reasonably complete sales and marketing force. A transition agreement to deal with existing and future customers of Evergreen and EQ shall be negotiated by the Parties in good faith as soon as practicable.

     II. Under the sales representative agreement, EQ will provide a sufficient quantity of product to ESLR (branded as Evergreen Solar product) so that ESLR will be able to honor all sales contracts and other customer commitments already entered into by the time of signing this MOU. However, the following activities shall commence immediately after signing this MOU:

     1. The transfer of the sales function from ESLR to EQ should take place as early as possible. As the product produced by EQ today is branded and sold by ESLR, a thoughtful customer and product transition plan needs to be created early. Therefore new sales contracts and other customer commitments and volumes committing more of EQ’s future volumes must carefully be evaluated by the Supervisory Board.

     2. EQ will be renamed and as such a new brand will be developed for EQ. Any sales contracts entered into by EQ should be based on products to be sold under EQ’s new brand.

     3. ESLR will continue to receive a sales fee according to the Sales Representative Agreement dated September 29, 2006 for all sales or sales agreements made by the ESLR sales team at the time of signing this MOU and further sales agreements approved by the Supervisory Board of EQ. According to the contract, this fee will be reviewed and renegotiated during autumn 2007 for 2008. ESLR shall support EQ in building its own sales capabilities in terms of customer contacts, sales contract structure etc. and will be reimbursed at a rate determined as part of the customer and product transition plan.

FINAL 16 October 25, 2007

     J. IPO.

     I. All Parties desire to pursue a listing of the shares in EQ on a stock exchange of recognized international standing or on an authorized marketplace of recognized international standing (an “IPO”).

     II. Subject to applicable fiduciary duties and applicable law, all Parties hereby undertake to co-operate and approve such IPO, including the taking of all steps necessary to facilitate such IPO, including but not limited to, (i) retaining one or more internationally renowned investment banks (the “Banks”); and (ii) subject to the Banks’ advice in favor of proceeding with the preparations for an IPO, conducting a due diligence regarding EQ, amending the Articles of Association and the legal form of EQ as reasonably required to complete the IPO, and retaining legal counsel for the purposes of, inter alia, preparing the necessary prospectus; and (iii) voting in favor of an increase of EQ’s share capital to the effect that the free-float after the IPO, resulting from the shares sold in the IPO plus the new shares, correspond to at least [****].

     III. The Parties shall have the right to sell part of their shares in EQ in the IPO only if and to the extent that (i) the financing needs of EQ are met by the IPO; and (ii) such sale is not deemed, by the Banks, to jeopardize the success of the IPO. The Parties expect to be able to sell up to [****] % of their shares in EQ at the IPO. Unless the Parties agree otherwise, the Parties shall be entitled to sell their shares in the IPO on a pro-rata basis.

     IV. The Parties shall not sell, transfer, assign or otherwise dispose of any shares in EQ during a lock-up period of up to 180 days after the IPO, to the extent required by the Banks.

     V. The Parties agree to negotiate in good faith a stockholders’ agreement related to customary additional rights and obligations of principal stockholders related to an IPO, which rights and obligations the Parties acknowledge may vary depending on the stock exchange or authorized marketplace that is selected by the Parties for the IPO.

     K. Confidentiality. Subject to any required disclosure of this MOU required by United States securities laws or otherwise, this MOU and its contents are confidential and all Parties hereby agree to keep confidential and not to disseminate this MOU or any of its contents except (i) to legal, technical and financial advisors who have agreed to be bound by the confidentiality obligations in this paragraph, (ii) if agreed by the Parents in advance or (iii) if required by law or court or administrative order. The Parties acknowledge that United States securities laws may require this MOU to be filed with the Securities and Exchange Commission by ESLR, at which time it may become publicly available, provided that ESLR shall, upon the request by the other Parties, use its best efforts to limit the extent to which the MOU and/or its content is made publicly available. Any costs arising out of activities undertaken by ESLR as part of such best effort, shall be borne equally by the Parents.

FINAL 17 October 25, 2007

     L. Jurisdiction.  Insofar as permissible, exclusive jurisdiction for all disputes arising from and in connection with this MOU shall be Berlin, Germany. The laws of Germany shall apply exclusively, excluding its provisions concerning private international law and excluding the UN Sales Convention.

     M. Existing Agreements.  Where this MOU deviates from the existing agreements between the Parties in relation to EQ, including the agreements as of September 29, 2006, the MOU shall prevail. In all other respects the existing agreements remain in full force until they are amended or cancelled accordingly and new agreements are entered into.

     N. Severability.  If individual parts of this MOU are wholly or in part invalid, the other sections shall retain their validity unless the severed portion was essential to the purpose of this MOU.

     O. Binding nature.  

     I. This MOU shall be legally binding and may only be amended or terminated by the unanimous written agreement of the Parties. No modification or amendment to this MOU will be valid or binding except if stated in writing and executed by duly authorized representatives of each Party.

     II. The agreements to be entered into in regards to implementation of the IPO shall be negotiated in good faith having the mutual aim of the IPO in mind.

     P. Validity.  

     This MOU (or the agreements entered into pursuant to this MOU) shall remain valid after an IPO as contemplated in the terms of this MOU (e.g., Commercial Improvements are required to be licensed during the five-year period following an IPO, the license rights contemplated are perpetual, the silicon supply agreement calls for the supply of silicon through 2015 etc.) or after any other exit mutually agreed to among the Parents which allows the Parents to sell shares, if an IPO or any other mutually agreeable exit has taken place by December 31, 2009. Alternatively, if no IPO or no other mutually agreeable exit has taken place by December 31, 2009 the MOU (or the agreements entered into pursuant to this MOU) shall terminate.

     Q. Process and timetable.  The process will be to prepare, negotiate and enter into amended and/or new definitive legal agreements to the extent required to give effect to the terms and conditions set forth in this MOU.

     An expected non-binding timetable for moving forward is as follows:

Date	Action
End October, 2007	Make public announcement
November/December, 2007	Negotiation of agreements
December, 2007	Finalize agreements

FINAL 18 October 25, 2007

     IN WITNESS WHEREOF, the undersigned duly authorized representatives of the Parties have executed this MOU as of the date first referenced above.

Evergreen Solar, Inc.		Q-Cells AG
By:	/s/ Michael El-Hillow	By:	/s/ F. Holzapfel — /s/ H. Schüning
Print name:	Michael El-Hillow	Print name:	F. Holzapfel — H. Schüning
Title:	Chief Financial Officer	Title:	CTO — CFO
Date:	October 25, 2007	Date:	25/10/07
Renewable Energy Corporation		EverQ GmbH
By:	/s/ Erik Thorsen	By:	/s/ R. Mohr — /s/ G. Marhan
Print name:	Erik Thorsen	Print name:	R. Mohr — G. Marhan
Title:	President & CEO	Title:	CFO — COO
Date:	25-10-2007	Date:	25/10/07

FINAL October 25, 2007

Exhibit A

[****]

EX-10.36

Exhibit 10.36

EXECUTION

GROUND LEASE

MASSACHUSETTS DEVELOPMENT FINANCE AGENCY

as Landlord

and

EVERGREEN SOLAR, INC.

as Tenant

Dated as of November 20, 2007

TABLE OF CONTENTS

ARTICLE 1
Land and Term	1
1.1. The Land	1
1.2. Condition of the Land	2
1.3. Initial Term	3
1.4. Delivery and Acceptance of Possession	3
1.5. Extension of the Initial Term	3
1.6. The Project/The Land	3
ARTICLE 2
Permitted Uses; Compliance with Laws	3
2.1. Permitted Uses; Continuous Operation upon Completion of Initial Improvements	3
2.2. Compliance with Laws	3
ARTICLE 3
Base Rent and Additional Rent	5
3.1. Base Rent	5
3.2. Payment of Base Rent	6
3.3. Method of Payment	6
3.4. Base Rent Net to Landlord	6
3.5. Additional Rent	6
3.6. No Release of Obligations	7
ARTICLE 4
Real Estate Taxes	7
4.1. Impositions	7
4.2. Impositions Assessed Against the Landlord	8
4.3. Tenant’s Failure to Promptly Pay Impositions	8
4.4. Validity of Impositions	8
ARTICLE 5
Insurance	8
5.1. Liability, Hazard and Other Insurance	8
5.2. Indemnity	10
5.3. Waiver of Subrogation	11
5.4. Landlord’s Insurance	11
ARTICLE 6
Utilities and Services	11
ARTICLE 7
Repairs and Maintenance	11

ARTICLE 8
Environmental Indemnity; Reservation of Rights Under the Federal Facilities Agreement	12
8.1. Definitions Related to Hazardous Materials	12
8.2. Release of Hazardous Materials	12
8.3. Indemnity	12
8.4. Landlord’s Right to Inspect	13
8.5. Reservation of Rights Under the Federal Facilities Agreement	13
8.6. Monitoring Wells and Access Thereto	14
8.7. Landlord to Exercise Its Rights under the Army Deed	15
8.8. Receipt of Documents	15
ARTICLE 9
Mortgages of Tenant’s Interest	15
9.1. Permitted Mortgages	15
9.2. Notice of Mortgage	15
9.3. Status Report	16
9.4. Protection of Leasehold Mortgagee	16
9.5. Lending Institutions	18
ARTICLE 10
Assignment and Subletting	18
10.1. Subletting	18
10.2. Assignment	19
10.3. Expenses of Landlord	20
ARTICLE 11
Casualty Damage	20
11.1. Restoration	20
11.2. Conditions of Work	20
ARTICLE 12
Eminent Domain and Public Dedication	20
12.1. Total, Partial Taking; Termination of Lease	20
12.2. Partial Taking — Lease Continues	22
12.3. Intentionally Deleted	22
12.4. Restoration of the Land	22
12.5. Intentionally Deleted	22
12.6. Intentionally Deleted	22
12.7. Abatement of Base Rent	22
12.8. Temporary Taking	22
12.9. Rights of Participation	22
12.10. Notice of Proceeding	23
ARTICLE 13
Intentionally Omitted	23

ARTICLE 14
No Broker Representation	23
ARTICLE 15
Quiet Enjoyment	23
ARTICLE 16
End of Term	23
ARTICLE 17
Default
17.1. Events of Default	24
17.2. Indemnity and Hold Harmless Provision	24
17.3. Landlord’s Right to Repossess	25
ARTICLE 18
As Is Delivery Of The Land	25
ARTICLE 19
Design and Construction of Initial Improvements	25
19.1. Compliance with Permits, Etc.; Soil Management Plan; Definition of “Initial Improvements”	25
19.2. Permits; Due Diligence	26
19.3. Contracts for Construction of Initial Improvements	26
19.4. General Provisions Governing Construction of Initial Improvements	26
19.5. Time for Commencement and Completion of Initial Improvements; Conditions Precedent to Commencement of Construction	27
19.6. Force Majeure	28
19.7. Substantial Completion	28
19.8. Signage	28
ARTICLE 20
Alterations and Optional Improvements; No Landlord Obligations to Make Initial Improvements or Optional Improvements	28
20.1. Conditions for Making Tenant Alterations and Optional Improvements	28
ARTICLE 21
Ownership of Improvements	29
ARTICLE 22
Miscellaneous Provisions	29
22.1. Nondiscrimination	29
22.2. Intentionally Deleted	30
22.3. The Landlord’s Liability; The Tenant’s Liability	30
22.4. Status Report	30

22.5. Provisions Binding	30
22.6. Invalidity of Particular Provisions	31
22.7. Filing of a Memorandum of Lease	31
22.8. Waiver	31
22.9. Landlord’s Right of Self-Help	31
22.10. Interest	32
22.11. Amendments	32
22.12. Governing Law	32
22.13. Notices	32
22.14. Intentionally Deleted	33
22.15. Force Majeure	33
22.16. Survival of Certain Provisions	33
22.17. “Legal Costs” Defined	33
ARTICLE 23
Tenant’s Option to Purchase	33
23.1. Grant of Option; Option Period	33
23.2. Purchase Notice and Deposit	34
23.3. Purchase Price	34
23.4. Negative Covenant in Deed to the Land	34

GLOSSARY OF DEFINED TERMS

EXHIBIT A	Legal Description of the Land
EXHIBIT B	Evergreen Solar Unified Permit
EXHIBIT C	Utility Sales Agreement
EXHIBIT D	Sketch Plan Showing Monitoring Wells on the Land
EXHIBIT E	Project Grant Agreement
EXHIBIT F	Memorandum of Lease
EXHIBIT G	Form of Purchase and Sale Agreement
SCHEDULE 1.1	Permitted Encumbrances
SCHEDULE 9.4(d)	Determination of Fair Market Rent
SCHEDULE 23	Determination of Fair Market Value

SUMMARY OF LEASE

LANDLORD:	Massachusetts Development Finance Agency
TENANT:	Evergreen Solar, Inc., a Delaware corporation
LAND:	The land known as Lot 2, Barnum Road, Town of Harvard, Worcester County, Massachusetts, containing approximately 23.11 acres of land, as more particularly described in Exhibit A to this Lease
IMPROVEMENTS:	All buildings, structures and other improvements now or hereafter existing on the Land.
PREMISES	The Land, together with the Improvements located thereon.
COMMENCEMENT DATE:	As provided in Section 1.3 hereof
TERM:	Commencing on the Commencement Date and expiring at midnight on the day immediately prior to the thirtieth (30th) anniversary date of the Commencement Date (the “Term”)
PERMITTED USES:	Uses of the Land permitted in accordance with the provisions of Article 2 hereof
RENT:	Base Rent and Additional Rent as provided in Article 3 hereof

GROUND LEASE

          THIS GROUND LEASE (this “Lease”), is made as of this 20th day of November, 2007 by and between MASSACHUSETTS DEVELOPMENT FINANCE AGENCY, a Massachusetts body politic and corporate established under Chapter 23G of the Massachusetts General Laws, successor-in-interest to the Government Land Bank under Chapter 289 of the Acts of 1998, having an address at 160 Federal Street, Boston, Massachusetts 02110 (the “Landlord”) and EVERGREEN SOLAR, INC., a Delaware corporation, having its principal office at 138 Bartlett Street, Marlborough, MA 01752 (the “Tenant”).

RECITALS:

          WHEREAS, the Landlord is the owner of the Land (as hereinafter defined) and desires to lease the Land to the Tenant and Tenant desires to lease the Land from Landlord, all on the terms and conditions set forth herein; and

          WHEREAS, the Tenant’s intended use of the Land is for the construction and operation of a facility for the design, manufacture and assembly of products for renewable energy technologies and all related functions including research and development, warehousing and administration as well as associated parking, driveways, storage areas, loading bays and site utilities (the “Project”).

AGREEMENTS:

          NOW, THEREFORE, the Landlord and the Tenant hereby agree as follows:

RULES OF CONSTRUCTION; DEFINITIONS:

          This Lease supersedes all other agreements concerning the Land, whether oral or in writing, between the Tenant and the Landlord.

          All exhibits and schedules to this Lease are incorporated herein. The use of the singular of terms which are defined herein (in the plural or the singular) shall mean and refer to any one of them, or a particular one of them, as the context permits or requires; the use of the plural of terms which are defined herein (in the singular or the plural) shall mean and refer to all or any combination of them, as the context permits or requires; and pronouns used herein shall be deemed to include the singular and the plural and all genders.

          Use of the connective “or” is not intended to be exclusive unless used with the word “either”; the term “may not” is intended to be prohibitive and not permissive; use of “includes” and “including” is intended to be interpreted as expansive and amplifying and not as limiting in any way.

          Terms defined elsewhere in this Lease shall have the respective meanings ascribed to them where so defined. A Glossary of Defined Terms may be found directly after the signature page of this Lease.

TERMS OF THIS LEASE:

ARTICLE 1
Land and Term

          1.1. The Land. The Landlord, for and in consideration of the rent, terms, covenants and conditions herein reserved and contained on the part of Tenant to be paid, kept and performed, hereby leases to the Tenant, and the Tenant hereby leases from Landlord, upon and subject to the terms, covenants and conditions herein set forth, the parcel of land known as Lot 2, Barnum Road (“Lot 2”) h

located in the Town of Harvard, Worcester County, Massachusetts, Lot 2 containing approximately 23.11 acres of land, located in the Rail, Industrial and Trade-Related Zoning District at the Devens Regional Enterprise Zone and more particularly described in Exhibit A attached hereto, and all easements, privileges, hereditaments and appurtenances in, on, under or affecting Lot 2 (but excluding any public streets, ways and alleys abutting or adjoining Lot 2, which public streets, ways or alleys, the Parties agree, may be used by the Tenant in common with others entitled thereto, for all uses and purposes for which public streets, ways and alleys may be used in the Devens Regional Enterprise Zone) (the “Appurtenant Easements”), and any strips, gores, trees, shrubs and plants thereon (all of the foregoing, together with Lot 2, are hereinafter collectively referred to as the “Land”), and together with, except as otherwise herein provided, all buildings, structures and other improvements now or hereafter constructed thereon in compliance with this Lease (the “Improvements”; the Land and the Improvements are hereinafter collectively referred to as the “Premises”), free of all tenants occupying the Land pursuant to rights granted by the Landlord, subject, however, to the following: (a) any facts that an accurate survey or personal inspection of the Land would show; (b) easements, covenants and restrictions of record as of the date hereof, to the extent that the same are in force or effect; including without limitation those listed on Schedule 1.1 Permitted Encumbrances attached hereto; (c) easement rights reserved hereby in favor of Landlord (the “Reserved Easements”) if needed for purposes of installing, maintaining, replacing or upgrading underground utilities and reconnecting driveways in connection therewith by the Landlord, which Reserved Easements shall be located only within twenty-five feet of the perimeter lot line of Lot 2 and shall not materially adversely affect Tenant’s use of the Premises for the Permitted Uses (as defined in Section 2.1 hereof); (d) present and future Laws (as defined in Article 2), of all boards, bureaus, commissions and bodies of any municipal, county, state, federal or other governmental body now or hereafter having or acquiring jurisdiction over the Land and/or the use or improvement thereof, including the Devens Enterprise Commission (the “DEC”) (each a “Governmental Authority”); (e) violations of Laws, whether or not recorded or noted, of a Governmental Authority, against or affecting the Land as the same may exist on the Commencement Date (as defined below); (f) all taxes, duties, assessments, special assessments, water charges and sewer rents and any other impositions by a Governmental Authority, fixed or not fixed, accrued from and after the Commencement Date; and (g) the condition and state of repair of the Land as the same may be on the Commencement Date.

          1.2. Condition of the Land. Tenant acknowledges that it has leased the Land and has agreed to construct the Initial Improvements (hereafter defined in Article 19) after having had a full and complete opportunity to conduct an examination of the Land, including, without limitation, subsurface conditions, the presence of any hazardous waste or materials located on the Land, the legal title to the Land and Laws affecting the same, as the Tenant deems necessary and/or desirable, and accepts the same in the same condition in which they or any part thereof now are, and assumes all risks in connection therewith, without any representation or warranty, express or implied, in fact or by law, on the part of Landlord, and without recourse to Landlord, Tenant hereby waiving any and all claims, now existing or hereafter arising, relating to the condition (known or unknown) of the Land, including without limitation those matters set forth on Schedule 1.2 hereof.

          Notwithstanding the foregoing provisions, the Landlord and Tenant acknowledge that the Tenant shall have a right to terminate this Lease (“Tenant’s Termination Option”) at any time within six (6) months of the date hereof in the event that the Tenant determines that there are any Hazardous Materials located on the Land which prohibit or substantially interfere with the Tenant’s ability to construct the Initial Improvements (as defined in Article 20 hereof) and use the same for the Permitted Uses. In such event, the Tenant shall promptly notify the Landlord of the nature of the materials found and provide the

2

Landlord with copies of all reports related thereto received by Tenant. In no event shall the Landlord have any obligation under this Lease to remedy any such matter. In addition, in such event, the surrender of the Land by the Tenant shall be subject to the provisions of Article 16 hereof.

          1.3. Initial Term. TO HAVE AND TO HOLD the Land for an initial term (the “Initial Term”) commencing on November 20, 2007 (the “Commencement Date”); and expiring at midnight on the day immediately prior to the thirtieth (30^th) anniversary date of the Commencement Date (the “Expiration Date”), unless this Lease shall sooner terminate as hereinafter provided. The Initial Term, as the same may be extended pursuant to Section 1.5 hereof, is called the “Term”.

          1.4. Delivery and Acceptance of Possession. The Landlord will deliver possession of the Land to the Tenant on the Commencement Date; the Tenant shall accept, subject to the terms hereof, possession of the Land on the Commencement Date.

          1.5. Extension of the Initial Term. Subject to the terms and provisions hereof and provided that there is no Event of Default existing at the time of the exercise of the applicable option term extension, the Tenant may extend the Initial Term of this Lease for two (2) additional terms of ten (10) years each (the “First Option Term” and the “Second Option Term”; the exercise of the Second Option Term being subject to the timely exercise of the First Option Term). The Tenant shall exercise such option by giving written notice to the Landlord on or before twelve (12) months prior to the expiration of the Initial Term for the exercise of the First Option Term and on or before twelve (12) months prior to the expiration of the First Option Term for the exercise of the Second Option Term, of its intent to exercise its option to extend this Lease for the applicable Option Term. The timely giving of such written notice by Tenant shall automatically extend the Term of this Lease for the respective Option Term at the end of the Initial Term or the First Option Term, as the case may be.

          1.6. The Project/The Land. The term “Project” shall include the Land upon construction of the Project upon the Land.

ARTICLE 2
Permitted Uses; Compliance with Laws

          2.1. Permitted Uses; Continuous Operation upon Completion of Initial Improvements. The Land shall be used and occupied only for the construction and operation of a facility for the design, manufacture and assembly of products for renewable energy technologies and all related functions including research and development, warehousing and administration as well as associated parking, driveways, storage areas, loading bays and site utilities (the “Permitted Uses”) and for no other uses, subject to and in compliance with the Evergreen Solar Unified Permit dated August 14, 2007 as amended, and attached hereto as Exhibit B (the “Unified Permit”). The Tenant acknowledges that the Landlord has entered into this Lease in reliance upon the Tenant’s covenant to use the Land for the Permitted Uses, and therefore expressly agrees that use of the Land, other than for Permitted Uses, without the express written consent of the Landlord, which may be withheld in the Landlord’s sole discretion, shall be a default hereunder with respect to which the Landlord, in addition to all of the rights available at law, shall have all rights available in equity, including the right to enforce this obligation by injunctive relief and specific performance.

          2.2. Compliance with Laws.

3

          (a) The Tenant shall, at all times during the Term, at the Tenant’s own cost and expense, perform and comply with, and shall cause all subtenants, licensees and operators to promptly comply with, all laws, rules, orders, ordinances, regulations, and requirements now or hereafter enacted or promulgated, of every Governmental Authority, including without limitation the Landlord acting in its capacity as a Governmental Authority, and of any agency thereof, relating to the Land and the Project, or the facilities or equipment therein, or the streets, sidewalks, curbs, and gutters on the Land and forming a part of the Land, or the appurtenances to the Land, or the franchises and privileges connected therewith, or any condition or use of the Land, including land-use, environmental and operational laws, rules, orders, ordinances, regulations and requirements (collectively, the “Laws”) whether or not such Laws so involved shall necessitate structural changes, improvements, interference with use and enjoyment of the Land or the Project, replacements, or repairs, extraordinary as well as ordinary, and the Tenant shall so perform and comply, whether or not such Laws shall now exist or shall hereafter be enacted or promulgated, and whether or not such Laws can be said to be within the present contemplation of the parties hereto. In addition, if prior to commencement of the Term, the Tenant or its agents or contractors goes onto the Land to perform any acts, such acts shall be performed in compliance with Laws and otherwise in compliance with the terms of the Non Exclusive License/Access Agreement to Enter onto Land for Limited Site Assessment and Pre-Development Activity Purposes dated as of June 15, 2007, as amended by First Amendment to License/Access Agreement dated as of July 10, 2007, Second Amendment to License/Access Agreement dated as of August 3, 2007, Third Amendment to License/Access Agreement dated as of August 16, 2007, Fourth Amendment to License/Access Agreement dated as of September 14, 2007, Fifth Amendment to License/Access Agreement dated as of September 28, 2007, Sixth Amendment to License/Access Agreement dated as of October 10, 2007, Seventh Amendment to License/Access Agreement dated as of October 17, 2007, Eighth Amendment to License/Access Agreement dated as of October 24, 2007, Ninth Amendment to License/Access Agreement dated as of October 31, 2007, Tenth Amendment to License/Access Agreement dated as of November 7, 2007, Eleventh Amendment to License/Access Agreement dated as of November 9, 2007 and Twelfth Amendment to License/Access Agreement dated as of November 14, 2007, as the same may be further amended, which Right of Entry Agreement shall terminate upon the Commencement Date of this Lease. Except as otherwise provided in Section 2.2(b) below, no provision of this Lease shall be construed so as to permit the Tenant to postpone compliance with such Laws if any Governmental Authority shall threaten to carry out any work to comply with the same or to foreclose or sell any lien affecting all or any part of the Land. Tenant shall, in the event of any violation or any attempted violation of this Section by any subtenant, licensee or operator, take steps, immediately upon knowledge of such violation, as Tenant determines to be reasonably necessary to remedy or prevent the same as the case may be.

          (b) The Tenant shall have the right, provided it does so with due diligence and dispatch, to contest by appropriate legal proceedings, without cost or expense to the Landlord, the validity of any Laws of the nature hereinabove referred to in this Section 2.2. The Tenant may postpone compliance with such Laws until the final determination of such proceedings but only so long as such postponement of compliance will not subject the Landlord to any criminal prosecution or civil action or liability, or any costs or other liability or loss of any kind against the Landlord or the interest of the Landlord in the Land or the Improvements thereon which may arise by reason of postponement or failure of compliance with such Laws and only so long as such postponement of compliance will not have an adverse effect on the public health or safety as reasonably determined by the Landlord, and the Tenant shall indemnify and hold the Landlord harmless from all costs, claims, losses and liabilities in any way relating to the same, including “Legal Costs” as hereinafter defined in Section 22.17.

4

          (c) Tenant shall be responsible for securing all permits or licenses necessary for the construction and operation of the Initial Improvements as soon as such applications can appropriately be made if same cannot be secured prior to the commencement of construction of the Initial Improvements, and agrees to diligently and in good faith pursue such applications and to coordinate with Landlord in such pursuit. The cost of obtaining any such licenses and permits shall be borne solely by the Tenant.

          (d) Upon Substantial Completion of the Initial Improvements, the Tenant shall Use and Occupy (as hereinafter defined) the Project consistent with the normal hours of operation for the Permitted Uses, subject to the cessation of such uses as shall be reasonably required for (i) maintenance and repair or alterations to the Project and/or the Land; (ii) as shall be reasonably required in connection with restoration resulting from any Casualty or Taking of the Land or the Project; or (iii) a cessation of the Permitted Uses for more than a three (3) month consecutive period which conduct of the Permitted Uses is not restored within three (3) months of notice from the Landlord. “Use and Occupy” shall mean the conduct of the Tenant’s business for the Permitted Uses consistent with the days and hours of operation of similar businesses.

          (e) Tenant shall not, directly or indirectly, create or permit to be created or to remain, and shall discharge, any mechanic’s or other lien placed on the estate of Landlord in the ordinary course of business or with respect to any work performed by or on behalf of Tenant on or about the Land. Tenant shall pay promptly all persons furnishing labor or materials with respect to any work performed by Tenant. Notwithstanding the foregoing, Tenant shall have the right to contest by appropriate legal proceedings diligently conducted in good faith, in the name of Tenant, or Landlord, or both without cost, expense, liability or damage to Landlord, the validity or application of any lien. Tenant and any Subtenants shall procure unconditional waivers and releases of lien claims (and/or notices of completion) in form reasonably acceptable to Landlord from all persons furnishing labor or materials with respect to any work performed on behalf of Tenant on the Land, at the time each progress payment and/or final payment is made. In the event any mechanic’s or other lien shall at any time be filed against the Land by reason of work, labor, services or materials performed or furnished, or alleged to be performed or furnished, to Tenant or to any one holding the Land through or under the Tenant, Tenant shall, within thirty (30) days of notice of its recordation, cause the same to be discharged of record or bonded to the satisfaction of Landlord. If Tenant fails to cause such lien forthwith to be so discharged or bonded after being notified of the filing thereof, then, in addition to any other right or remedy of Landlord, Landlord may discharge the same by paying the amount claimed to be due or may cause the same to be bonded, and the amount so paid by Landlord, including reasonable attorney’s fees incurred by Landlord in either defending against such lien or procuring the discharge or bonding of such lien, together with interest thereon at the annual rate provided in Section 22.10 hereof, shall constitute Additional Rent and shall be payable by Tenant to Landlord on demand.

ARTICLE 3
Base Rent and Additional Rent

          3.1. Base Rent. The Tenant shall pay to the Landlord, in accordance with the terms of this Lease, base rent (“Base Rent”) in the amount of One Dollar ($1.00) per annum for the period commencing on the Base Rent Commencement Date (defined to mean the date on which the Tenant commences occupancy of the Land for the conduct of its business following completion of the Initial Improvements) and continuing throughout the Term.

5

          3.2. Payment of Base Rent. Commencing on the Commencement Date and continuing for the remainder of the Term, Tenant shall pay the Base Rent to Landlord in advance in one annual installment on or before the Commencement Date and each successive anniversary of the Commencement Date, respectively.

          3.3. Method of Payment. All payments of Base Rent, Additional Rent (as hereinafter defined) (Base Rent and Additional Rent are together referred to herein as “Rent”) and other sums due Landlord shall be paid in current U.S. exchange by check drawn on a Boston Clearinghouse Bank without intervening endorsement at the Landlord’s address set forth at the beginning of this Lease or such other place as Landlord may from time to time direct by written notice (or if requested by Landlord, following reasonable advance notice accompanied by appropriate instructions, by electronic fund transfer) without notice, demand, set-off, counterclaim or other deduction. Rent not paid within five (5) days of when due shall bear interest at an annual rate as provided in Section 22.10 hereof. Tenant shall make ratable payments of Rent for any period of less than a month, as and when Rent is adjusted hereunder. Each payment of Additional Rent shall be paid by the Tenant directly to the party entitled to such payment.

          For purposes of this Lease, all monetary amounts to be paid by Tenant pursuant to the terms of this Lease, and whether characterized as Base Rent or Additional Rent, shall be deemed to constitute Rent hereunder, it being the intention of the parties hereto that Landlord shall have the right to exercise all rights and remedies for the non-payment of Additional Rent when due that Landlord has hereunder for the non-payment of Base Rent.

          Without limiting the foregoing, except as and to the extent expressly otherwise provided in this Lease, Tenant’s obligation so to pay Rent shall not be discharged or otherwise affected by any applicable Law now or hereafter applicable to the Land, or any other restriction on or interference with the Permitted Uses, or any damage or destruction of the Land or any Improvements thereon, or any Taking, or any other interruption or occurrence whatsoever.

          3.4. Base Rent Net to Landlord. Base Rent shall be absolutely net to the Landlord so that this Lease shall yield to the Landlord the full amount of Base Rent without deduction and free of any charges, assessments, Impositions (as hereinafter defined in Article 4) or deductions of any kind charged, assessed, or imposed on or against the Land or its use, and without abatement, deduction or set-off by the Tenant, and the Landlord shall not be expected or required to pay any such charge, assessment or Imposition, or be under any obligation or liability hereunder except as herein expressly set forth, and all costs, expenses and obligations of any kind relating to the maintenance and operation of the Land, including all alterations, repairs, reconstruction and replacements as provided in this Lease, that may arise or become due during the Term hereof shall be paid by the Tenant, and the Landlord shall be indemnified and saved harmless by the Tenant from and against such costs, expenses and obligations.

          3.5. Additional Rent. From and after the Commencement Date, the Tenant shall also pay without abatement, deduction or set-off as additional rent (“Additional Rent”), all sums, Impositions (as defined in subsection 4.1), costs, expenses and other payments which the Tenant in any of the provisions of this Lease assumes or agrees to pay and in the event of any non-payment of Additional Rent, the Landlord shall have (in addition to all other rights and remedies) all the rights and remedies provided for herein or by law or in equity. Additional Rent for any partial month at the beginning or

6

end of the Term shall be prorated and Tenant shall only be liable for the portion of such Additional Rent attributable to the Term hereunder.

          3.6. No Release of Obligations. (a) No happening, event, occurrence or situation during the Term hereof, whether foreseen or unforeseen, and however extraordinary (including without limitation, the Tenant’s failure, refusal or inability for any reason to construct the Initial Improvements) shall permit the Tenant to quit or surrender the Land or this Lease or shall relieve the Tenant from its liability to pay the Base Rent and Additional Rent and other charges due under this Lease, or shall entitle the Tenant to any abatement or refund of any Base Rent, or shall relieve the Tenant from any of its other obligations under this Lease, and (b) the Tenant waives any rights now or hereafter conferred upon, to the extent permitted by law, to quit or surrender the Land leased hereunder, or any part thereof, or to any abatement, set-off, reduction or suspension of Base Rent or Additional Rent on account of any such act, happening, occurrence or situation, except as otherwise provided herein.

ARTICLE 4
Real Estate Taxes

          4.1. Impositions. Tenant covenants to pay throughout the Term, directly to the appropriate Governmental Authority or to the appropriate party, before any fine, penalty, interest or cost may be added thereto for the nonpayment thereof, any and all taxes and amounts payable under a certain Tax Increment Financing Agreement by and between the Landlord and the Tenant dated November 20, 2007 (the “TIF Agreement”), and payments in lieu of taxes required to be paid under any agreement with the Landlord, assessments (including, but not limited to, all assessments for public improvements or benefits, payable during the term of this Lease), water, sewer and other rents, rates and charges, charges for public utilities, excises, levies, licenses and permit and inspection fees and other charges (imposed by a Governmental Authority or otherwise), general and special, ordinary and extraordinary, foreseen and unforeseen, of any kind and nature whatsoever, which at any time during the Term are assessed, levied, confirmed, imposed upon, or grow or become due or payable out of or in respect of, or become a lien on (a) the Land, or (b) any payments reserved or payable hereunder or any other sums payable by the Tenant hereunder, or (c) this Lease or the leasehold estate hereby created, or which arise in respect of the operation, possession, occupancy or use of the Land (all of which taxes, payments in lieu of taxes, assessments, charges, interest, penalties or like charges are sometimes hereinafter referred to collectively as “Impositions” and individually as an “Imposition”); provided, however, that:

          (i) If, by law, any Imposition is or may be payable, at the option of the taxpayer, in installments, the Tenant may pay such Imposition in installments (with any accrued interest due and payable on the unpaid balance of the Imposition) and shall pay each such installment as the same respectively becomes due and before any fine, penalty, further interest or cost may be added thereto.

          (ii) Impositions, whether or not a lien upon the Land, shall be apportioned between the Landlord and the Tenant at the beginning and at the end of the Term, and the Tenant shall pay only such Impositions which are assessed against the Land with respect to any tax year which falls within the Term. The Tenant hereby waives any claim that it is or may become exempt from obligations relating to Impositions based upon the Landlord’s status as a Governmental Authority.

7

          4.2. Impositions Assessed Against the Landlord. Nothing herein contained shall require the Tenant to pay income taxes assessed against the Landlord, or any capital levy, corporation franchise, excess profits, estate, succession, inheritance or transfer taxes of the Landlord, unless such taxes are imposed or levied upon or assessed as a total or partial substitute for, or in lieu of, any other Imposition required to be paid by the Tenant pursuant to this Article 4, in which event, the same shall be deemed Impositions and shall be paid by the Tenant; provided, however, that if at any time during the Term, the method of taxation shall be such that there shall be levied, assessed or imposed on the Landlord a capital levy, gross receipts or other tax on the Rent received hereunder and/or a franchise tax or an assessment, levy or charge measured by or based, in whole or in part, upon such Rent, upon the Land or the Project (including but not limited to the acquisition, leasing, use or value thereof), and/or measured in whole or in part by the Landlord’s income from, or use of, the Land, then all such taxes, assessments, levies and charges, or the part thereof so measured or based, shall be deemed to be included within the term “Impositions” for the purposes hereof and the Tenant shall pay and discharge the same as herein provided in respect of the payment of Impositions.

          4.3. Tenant’s Failure to Promptly Pay Impositions. The Tenant shall pay all Impositions before any fine, penalty, interest or cost may be added thereto for the nonpayment thereof, and, with respect to real estate taxes only, shall furnish to the Landlord, within thirty (30) days of a written request by the Landlord, with receipts or other satisfactory proof evidencing payment of such real estate taxes.

          4.4. Validity of Impositions. The Tenant shall have the right to contest the amount or validity, in whole or in part, of any Imposition by appropriate proceedings diligently conducted in good faith, but only after payment of such Imposition, unless such payment would operate as a bar to such contest or interfere materially with the prosecution thereof, in which event, notwithstanding the provisions hereof, the Tenant may postpone or defer payment of such Imposition if, but only if (i) neither the Land or Project nor any part thereof would by reason of such postponement or deferment be in danger of being forfeited or lost, and (ii) the Tenant shall have provided the Landlord with evidence that the amount so contested and unpaid, together with all interest and penalties in connection therewith and all charges that may or might be assessed against or become a charge on the Land or the Project or any part thereof, in such proceedings has been set aside in a separate bank account and earmarked for such purposes upon such arrangements as are reasonably satisfactory to the Landlord. The Tenant will save the Landlord harmless from any and all losses, liabilities, claims, judgments, decrees and costs, including Legal Costs, in connection with any such contest and will, promptly after the final settlement, compromise or determination of such contest, fully apply and discharge the amounts which shall be levied, assessed, be payable thereon or in connection therewith, together with all penalties, fines, interest, costs and expenses thereof or in connection therewith.

ARTICLE 5
Insurance

          5.1. Liability, Hazard and Other Insurance.

          (a) The Tenant will, at all times during the Term, maintain, or cause to be maintained, insurance on the Premises of the following character:

          (i) Insurance against loss or damage by fire, vandalism and malicious mischief, extended coverage perils and all physical loss perils commonly known as “All Risk” (including

8

earthquake coverages if the same is available at commercially reasonable rates), as shall from time to time be customary for similarly situated premises in The Commonwealth of Massachusetts, with a replacement cost coverage endorsement, an agreed amount endorsement waiving all co-insurance provisions of the policy or policies in question, and in an amount not less than one hundred percent of the replacement value of the Improvements (excluding foundation(s)), without any deduction being made for depreciation and with a deductible not to exceed $50,000. Such replacement value shall be determined by the company issuing the insurance policy at the time the policy is initially obtained and shall be evidenced by an agreed amount endorsement.

          (ii) Commercial general liability insurance on an occurrence basis insuring the Tenant against claims for bodily injury, death, or property damage occurring on, in, or about the Land, or in connection with the Tenant’s use and occupancy of the Land and the Improvements, such insurance to be in standard form and with such coverages and in such amounts as the Landlord shall reasonably request pursuant to Section 5.1(a) (vii) (but in any event initially with a general aggregate limit of not less than $5,000,000, a products — completed operations aggregate limit of not less than $5,000,000, a personal and advertising injury limit of not less than $1,000,000, and a per occurrence limit of not less than $5,000,000 for bodily injury, property damage and medical payments, which may be based upon a combination of primary coverage of not less than $1,000,000 plus umbrella coverage, which policy shall include operations and contractual liability coverage which insures performance by the Tenant of the indemnity provisions set forth in Section 5.2 of this Lease. The Landlord shall be named as an additional insured under this policy.

          (iii) Adequate boiler and pressure vessel insurance on all equipment, parts thereof, and appurtenances attached or connected to the Land, which by reason of their use or existence are capable of bursting, erupting, collapsing, or exploding, in such limits as may be reasonably acceptable to the Landlord.

          (iv) During the course of any construction, repair, restoration or replacement of the Improvements, builder’s risk insurance (or such reasonably comparable insurance) on an all-risk basis (including collapse) in an amount equal to 100% of the projected completed value of the Initial Improvements with “increased cost of construction” endorsement and shall insure against the perils of fire and extended coverage and physical loss or damage, including without duplication, coverages with respect to casualties arising due to subsurface work, shoring, blasting, pile driving, caisson work and the like, loss or damage to the equipment, supplies and materials furnished and stored, and owned and non-owned vehicle liability insurance with respect to all vehicles and registered mobile equipment and with respect to any unlicensed mobile equipment, written on a completed value, non-reporting form.

          (v) Broad form flood insurance if any portion of the Improvements is currently or at any time in the future located in an area identified by the Secretary of Housing and Urban Development, or any successor agency, as an area having special flood, mudslide or flood-related erosion hazards and in which flood insurance has been made available under the National Flood Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, as amended from time to time, provided that if broad form flood coverage is not available, such insurance shall be for the lesser of the replacement value of the Improvements or the maximum amount available under the National Flood Insurance Program.

9

          (vi) If required by Laws, worker’s compensation insurance for all persons engaged by the Tenant or any contractor or subcontractor to conduct any activities at the Land, subject to the statutory limits in the Commonwealth of Massachusetts, and employers liability insurance with a limit of at least $1,000,000 per accident and per disease per employee, and $1,000,000 per disease policy limit.

          (vii) Such other insurance reasonably required by the Landlord and customarily carried by tenants of similar property in similar businesses, or increased amounts of the insurance referred to in (i) — (vi) above (based on changed circumstances, including the declining value of the dollar), that the Landlord may reasonably request, but not to exceed the level of coverage for such insurance commonly carried by comparable business similarly situated, as reasonably determined by the Landlord.

          (b) Such insurance shall be written by companies of recognized financial standing which are rated “A” or “A-” by a national rating agency and are legally qualified to issue such insurance in The Commonwealth of Massachusetts, and such insurance shall name the Tenant as the insured party thereunder. Such insurance may be obtained by the Tenant by endorsement on its blanket insurance policies, provided that (i) such blanket policies satisfy the requirements specified herein, and (ii) the Landlord shall be furnished with the certificate of the insurer to the effect that (a) the amount of insurance allocable exclusively to the Premises is not less than the amount required by this Article and (b) the protection afforded the Premises is not less than the protection that would have been afforded under a separate policy or policies relating only to the Premises. All insurance policies to be maintained hereunder shall require thirty (30) days advance written notice to the Landlord prior to cancellation, material modification or expiration of such policies.

          (c) The Tenant has, as of the Commencement Date, delivered to the Landlord certificates of insurance satisfactory to the Landlord evidencing all the insurance which is then required to be maintained by the Tenant hereunder, and the Tenant shall deliver to the Landlord no later than sixty (60) days after the Commencement Date the original or duplicate policies satisfactory to the Landlord evidencing all the insurance which is then required to be maintained by the Tenant hereunder; in addition, the Tenant shall, within thirty (30) days prior to the date of expiration of any such insurance, deliver either original or duplicate policies or certificates of insurance (followed within sixty (60) days thereafter by delivery of the extension of the policies) evidencing the renewal of such insurance. Should the Tenant fail to effect, maintain, or renew any insurance provided for herein, or to pay the premium therefor, or to deliver to the Landlord any of such policies or certificates when required hereunder, the Landlord, at its option, but without obligation so to do, may procure such insurance, and any sums expended by it to procure such insurance shall be Additional Rent hereunder and shall be repaid by the Tenant within thirty (30) days following the date on which demand therefor shall be made by the Landlord. The Tenant’s insurance policy(ies) shall contain a provision that such policy(ies) shall not be canceled, modified or reduced in scope, and shall not expire, without thirty (30) days prior written notice to the Landlord.

          5.2. Indemnity. To the extent such provision is enforceable at law and except to the extent arising as a result of the negligence or willful misconduct of Landlord, the Tenant will indemnify and hold harmless the Landlord (including for purposes of this Section 5.2, the Landlord’s officials, employees, agents, contractors and representatives) from and against any and all liability, loss, damages, expenses (including Legal Costs), costs of action, suits, interest, fines, penalties, claims, and judgments arising from injury, or claim of injury, during the Term of this Lease to person or property of any and every nature, and from any matter or thing, arising from any act or failure to act by the

10

Tenant with respect to the Land or the Improvements to be constructed thereon (including the facilities and equipment thereon), the occupation, possession, use, management, improvement, construction, alteration, repair, maintenance, control or leasing of the Land or the Improvements to be constructed thereon (including the streets, sidewalks, steam tunnels, curbs, and gutters forming a part of the Premises, the appurtenances to the Premises, or the franchises and privileges connected therewith, or arising out of the Tenant’s failure to perform, fully and promptly, or the Tenant’s postponement of compliance with, each and every term, covenant, condition, or agreement herein provided to be performed by the Tenant. The Tenant shall pay the Legal Costs of the Landlord incurred in connection with any and all suits that may be brought and claims which may be made, against the Landlord, or in which the Landlord may be impleaded with others, whether the Landlord shall be liable or not, upon any such above-mentioned liability, loss, damages, expenses, costs of action, suits, interest, fines, penalties, claims, and judgments, and the Tenant, at the Tenant’s own cost and expense, shall satisfy, pay, and discharge any and all judgments, and pay any settlements approved by the Tenant, that may be recovered against the Landlord in any such action or actions in which the Landlord may be a party defendant, or that may be filed against the Land, or any interest therein, and in the event of the failure of the Tenant to pay the sum or sums for which the Tenant shall become liable as aforesaid, then the Landlord may pay such sum or sums, with all interest and charges which may have accrued thereon, and the amount so paid by the Landlord, together with any Legal Costs, shall be Additional Rent payable by the Tenant to the Landlord within thirty (30) days following the date on which demand therefor shall be made by the Landlord. The indemnification provisions set forth in this Section 5.2 shall survive the expiration or earlier termination of this Lease.

          5.3. Waiver of Subrogation. Each insurance policy obtained by the Tenant in connection with this Lease shall include a waiver by the insurer of all rights of subrogation against the Landlord.

          5.4. Landlord’s Insurance. The Tenant acknowledges that the Landlord is not required to procure or maintain insurance of any kind on or with respect to the Land or the Improvements under this Lease.

ARTICLE 6
Utilities and Services

          The Tenant shall provide and pay for, as Additional Rent, directly to the utility provider, all charges by any public authority or public utility for all of Tenant’s requirements for utilities and services, including, but not limited to, gas, steam, heat, water, sewer, electricity, telephone or other telecommunication service and the like at the Land, and service inspections made therefor. The Landlord shall have no obligation to provide the Land with or arrange for the availability of any utilities or services and makes no representations or warranties relating thereto or to the condition of the Land in any respect.

          Simultaneously with the execution of this Lease, the Tenant shall, as a condition of the effectiveness of this Lease, enter into a Utility Sales Agreement in the form of Exhibit C hereto.

ARTICLE 7
Repairs and Maintenance

          The Tenant agrees to be solely responsible, at its sole cost and expense, for maintaining the Premises and each and every part thereof throughout the Term of this Lease, and agrees, without limitation, to: (i) ensure that the Premises are in compliance with Laws; and (ii) maintain the Premises in

11

good order and repair in compliance with the terms of this Lease throughout the Term. All work performed by the Tenant shall be done in a good and workmanlike manner and in compliance with all applicable Laws. The Tenant shall not permit or commit any nuisance or unlawful conduct.

ARTICLE 8
Environmental Indemnity; Reservation of Rights Under the Federal Facilities Agreement

          8.1. Definitions Related to Hazardous Materials.

          (a) For purposes of this Lease, “Hazardous Materials” include and mean substances defined or classified as a “hazardous substance”, “hazardous material”, “hazardous waste”, “pollutant”, or otherwise denominated as a regulated or hazardous substance, waste or material, toxic or pollutant in any of the following: (i) the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980; (ii) the federal Hazardous Materials Transportation Uniform Safety Act of 1990; (iii) the federal Toxic Substances Control Act; (iv) the federal Resource Conservation and Recovery Act; (v) Massachusetts General Laws, Chapter 21D; (vi) Massachusetts General Laws, Chapter 21E; (vii) Massachusetts General Laws, Chapter 21C; (viii) Massachusetts General Laws, Chapter 21I; (ix)-any other federal, state or local law addressing itself to environmental contamination, waste or health and safety; or (x) any regulations promulgated under any of the foregoing, including, without limitation, the regulations promulgated under M.G.L. c. 21E at 310 CMR 40.000 et seq. (the “Massachusetts Contingency Plan” or “MCP”); as any of the foregoing may be promulgated or amended (collectively, the “Environmental Laws”). “Hazardous Materials” shall specifically include, but not be limited to, oil, asbestos, explosives, polychlorinated biphenyls, petroleum and petroleum-based derivatives, and urea formaldehyde.

          (b) “Remedial Work” as used in this Article 8 shall mean investigations, assessments, monitoring, response actions, remedial actions or interim cleanup actions relating to known or suspected Hazardous Materials.

          8.2. Release of Hazardous Materials.

          Tenant, for itself and its subtenants and each of their respective agents, employees, consultants, subconsultants, contractors, subcontractors, affiliates and invitees and anyone claiming by or through any of them (such parties other than Tenant being referred to as “Tenant’s Agents”) covenants and agrees during the Term (i) not to release or dispose of Hazardous Materials, or allow any threat of release of any Hazardous Materials, at, on, under, to or from the Land in violation of any Environmental Laws; (ii) except where incidental to Permitted Uses and managed, generated, used, stored and transported in compliance with the Environmental Laws and so as not to constitute a release or threat of release to the environment of any Hazardous Materials, not to allow the manufacture, treatment, storage or presence of any Hazardous Materials at the Land, or transportation of any Hazardous Materials from or onto the Land; (iii) to comply with the Environmental Laws with respect to the Land, and (iv) to perform and pay for all Remedial Work required under the Environmental Laws or reasonably necessary for the Permitted Uses to address any Hazardous Materials, except as otherwise provided in Section 8.7 hereof with respect to the obligations of the Department of the Army as Grantor under the Army Deed (as hereinafter defined in Section 8.5).

          8.3. Indemnity. The Tenant agrees to indemnify and hold the Landlord and its employees, contractors, representatives and agents harmless from any costs (including Legal Costs), claims,

12

judgments, damages, penalties, fines, liabilities or losses of every nature and kind whether at law or in equity arising, out of or in any way relating to the presence, release, transportation, treatment, migration, storage or disposal of Hazardous Materials on or relating to the Land as a result of Tenant’s activities (including without limitation all such persons claiming by, through or under Tenant) on or operations on the Land or in connection with the Improvements to be constructed thereon during the Term of this Lease (which for purposes of this Lease shall include the work conducted by the Tenant under that certain Non-Exclusive License/Access Agreement dated June 15, 2007, as amended) (“Tenant’s Indemnity”). Tenant’s Indemnity shall specifically cover, without limitation, the following: Remedial Work, consultants’ fees, response costs, potentially responsible party group costs, investigation and defense costs, and experts’ fees; all costs and damages, including natural resource damages, in connection with requirements or claims of any Government Authority or in connection with Third Party Claims, including sums paid in settlement of claims, regardless of whether any of such requirements or claims prove true or warranted; all costs of the enforcement of the Tenant’s obligations hereunder.

          Tenant’s Indemnity shall survive the expiration or termination of this Lease or any transfer of all or any portion of the Land, or of any interest in this Lease.

          8.4. Landlord’s Right to Inspect.

          To the extent required by any Governmental Authority or by any applicable Laws, Landlord and its officers, employees, contractors or agents shall have the right, but not the duty, except as set forth in Section 8.7, following reasonable advance notice of no less than seven (7) business days (except in the case of an emergency), to enter upon the Land from time to time for the purposes of inspections and other actions required in order to comply with applicable Laws. Landlord shall not be liable to Tenant in any manner for any expense, loss or damage occurring by reason of the aforesaid entries, nor shall the exercise of any such right be deemed an eviction or disturbance of Tenant’s use or possession, provided that, subject to the terms and provisions of the matters set forth on Schedule 1.1 hereto, the Landlord shall make all reasonable efforts to coordinate such entry so as to minimize any adverse impact to Tenant’s normal operations at the Land.

          8.5. Reservation of Rights Under the Federal Facilities Agreement. Pursuant to the terms of a certain Quitclaim Deed (the “Army Deed”) dated as of May 9, 1996 from the Department of the Army (the “Army” or the “Grantor”) to Landlord (the “Grantee”) and recorded with the Worcester County (Worcester District) Registry of Deeds (the “Registry”) in Book 17906, Page 1, the following provision that was contained therein must be set forth in future instruments transferring an interest in property conveyed to the Landlord by the Army, including the Land:

          By accepting this Deed, the Grantee acknowledges that the Grantor has provided the Grantee with a copy of the Federal Facilities Agreement (the “FFA”) between the Grantor and the U.S. Environmental Protection Agency (the “EPA”), dated May 11, 1991, and the modification thereto, dated March 26, 1996. The Grantor shall provide the Grantee with a copy of any future amendments to the FFA.

A. The Grantor, EPA, and the Commonwealth of Massachusetts, and their agents, employees, and contractors, shall have access to and over the Property as may be necessary for any investigation, response, or corrective action pursuant to CERCLA or the FFA found to be necessary before or after the date of this Deed on the Property or on other property comprising the Fort Devens National Priorities List (the “NPL”) site. This reservation includes the right to access

13

to and use of, to the extent permitted by law, any available utilities at reasonable cost to the United States.

B. In exercising the rights hereunder, the United States and the Commonwealth shall give the Grantee or its successors or assigns reasonable notice of actions taken on the Property under the FFA and shall, to the extent reasonable, consistent with the FFA, and at no additional cost to the United States, endeavor to minimize the disruption to the Grantee’s, its successors’, or assigns’ use of the Property.

C. The Grantee agrees that notwithstanding any other provision of the Deed, the United States assumes no liability to the Grantee, its successors, or assigns, or any other person, should implementation of the FFA interfere with the use of the Property. The Grantee and its successors and assigns shall have no claim on account of any such interference against the United States or the Commonwealth or any officer, agent, employee, or contractor thereof.

D. Prior to the determination by the United States that all remedial action is complete under CERCLA and the FFA for the Fort Devens NPL site, (i) the Grantee, its successors and assigns, shall not undertake activities on the Property that would interfere with or impede the completion of the CERCLA clean-up at the Fort Devens NPL site and shall give prior written notice to the Grantor, EPA, and the Commonwealth of any construction, alterations, or similar work on the Property that may interfere with or impede said clean-up; and (ii) the Grantee shall comply with any institutional controls established or put in place by the Grantor relating to the Property which are required by any record of decision (“ROD”) or amendments thereto, related to the Property, which ROD was approved by the Grantor and EPA and issued by the Grantor pursuant to CERCLA or the FFA before or after the date of this Deed. Additionally, the Grantee shall ensure that any leasehold it grants in the Property or any fee interest conveyance of any portion for the Property provides for legally-binding compliance with the institutional controls required by any such ROD.

E. For any portion of the Property subject to a response action under CERCLA or the FFA, prior to the conveyance of an interest therein, the Grantee shall include in all conveyances provisions for allowing the continued operation of any monitoring wells, treatment facilities, or other response activities undertaken pursuant to CERCLA or the FFA on said portion of the Property and shall notify the Grantor, EPA, and the Commonwealth by certified mail, at least sixty (60) days prior to any such conveyance of an interest in said property, which notice shall include a description of said provisions allowing for the continued operation of any monitoring wells, treatment facilities, or other response activities undertaken pursuant to CERCLA or the FFA.

F. Prior to the determination by the United States that all remedial action under CERCLA and the FFA is complete under CERCLA and the FFA for the Fort Devens NPL site, the Grantee and all subsequent transferees of an interest in any portion of the Property will provide copies of the instrument evidencing such transaction to the Commonwealth, the EPA, and the Grantor by certified mail, within fourteen (14) days after the effective date of such transaction.

G. The Grantee and all subsequent transferees shall include the provisions of this Section VIII in all subsequent leases, transfer, or conveyance documents relating to the Property or any portion thereof that are entered into prior to a determination by the United States that all remedial action is complete at the Fort Devens NPL site.”

     8.6. Monitoring Wells and Access Thereto. In addition to the Tenant’s obligations under Section 8.5, Landlord hereby notifies Tenant that there are two monitoring wells, 57M-96-09X and G3M-93-09X, located on the Land and shown on a sketch plan prepared by the Landlord and attached hereto as Exhibit D. The Tenant acknowledges its obligations pursuant to Section 8.5 hereof and the Army Deed with respect to the continued operations of such monitoring wells, treatment facilities or other response activities undertaken pursuant to CERCLA or the FFA on any portion of the Land, including a right of access to the Landlord and the Army, and shall notify the Army, the Environmental

14

Protection Agency and the Commonwealth of Massachusetts by certified mail sixty (60) days prior to any conveyance of an interest in the Land, which notice shall include a description of said provisions allowing for the continued operation of any monitoring wells, treatment facilities or other response actions undertaken pursuant to CERCLA or the FFA.

          8.7. Landlord to Exercise Its Rights under the Army Deed. The Landlord shall take all actions reasonably necessary to enforce the obligations of the Grantor under the Army Deed related to Hazardous Materials for which the Landlord is indemnified under the Army Deed.

          8.8. Receipt of Documents. The Tenant acknowledges that it has received a copy of the Army Deed, the FFA and a copy of the Administrative Consent Order and Covenant Not to Sue, ACO-CE-96-3001, and is familiar with the content of said documents.

ARTICLE 9
Mortgages of Tenant’s Interest

          9.1. Permitted Mortgages. The Tenant from time to time during the Term of this Lease may make one or more leasehold mortgages or collateral assignments of this Lease and the leasehold estate in the Land created hereby (each a “Leasehold Mortgage”) provided as a condition thereof such Leasehold Mortgage must comply with the following requirements:

          (a) Each Leasehold Mortgage shall convey no interest in any real property other than the Tenant’s interest in this Lease and the Improvements constructed on the Land during the Term of this Lease. The fee interest of the Landlord in the Land shall never be subordinated to any Leasehold Mortgage, nor will Base Rent or Additional Rent or any other payments hereunder be subordinated to any such Leasehold Mortgage.

          (b) The holder of each Leasehold Mortgage (a “Leasehold Mortgagee”) must be a Lending Institution (as defined in Section 9.5).

          (c) There may be an unlimited number of Leasehold Mortgages of this Lease and the leasehold estate created hereby at any one time provided however that, notwithstanding any provision of this Lease to the contrary, the Landlord shall not be required to give notices, statements or other written communications to any leasehold mortgagee other than the Leasehold Mortgagee (defined below) holding the first priority leasehold mortgage on the Tenant’s leasehold interest hereunder.

          (d) The holder of each leasehold mortgage must agree in writing upon taking possession of the Land to cure all Events of Default of which it has notice in accordance with the provisions of Section 9.4 hereof, and to otherwise comply with any obligations imposed upon Leasehold Mortgagees under Section 9.4.

          9.2. Notice of Mortgage. No Leasehold Mortgagee shall have the rights or benefits mentioned in this Article, nor shall the obligations of the Landlord be binding upon the Leasehold Mortgagee, unless and until a notice of such Leasehold Mortgage and of each assignment thereof, containing the full name and address of such Leasehold Mortgagee, the term of such mortgage, and a representation from the Tenant and the Leasehold Mortgagee that the Leasehold Mortgage is in compliance with the provisions of Section 9.1 (a) — (e), shall have been delivered to and received by the Landlord, notwithstanding any other form of notice, actual or constructive.

15

          9.3. Status Report. The Landlord agrees at any time and from time to time, upon not less than twenty (20) days prior written request by a Leasehold Mortgagee or proposed Leasehold Mortgagee, to execute, acknowledge and deliver to such Leasehold Mortgagee or proposed Leasehold Mortgagee a statement in writing certifying that this Lease is unmodified and in full force and effect (or if there have been modifications, that the same is in full force and effect as modified, and stating the modifications), that either no Event of Default exists and no event has occurred which, with the passage of time or the giving of notice or both, would constitute an Event of Default hereunder or specifying the Event of Default which has occurred, the dates to which the Base Rent and other charges have been paid in advance, if any, and such additional items as a Leasehold Mortgagee or proposed Leasehold Mortgagee may reasonably require, it being intended that any such statement delivered pursuant to this Section 9.3 may be relied upon by any Leasehold Mortgagee or proposed Leasehold Mortgagee or assignee of any Leasehold Mortgagee. In connection therewith, the Landlord may require that the Tenant provide to the Landlord a certification as to the existence of any Event of Default or such other information to be included in the Landlord’s statement hereunder, and if the Landlord so requires, then the Landlord may rely on such certification in its statement and the Landlord shall not be liable for or bound by any material inaccuracy or omission contained in the Landlord’s statement to the extent of any material inaccuracy or omission contained in the Tenant’s certification to the Landlord.

          9.4. Protection of Leasehold Mortgagee. If the Tenant, or the Tenant’s successors or assigns, shall mortgage this Lease in compliance with the provisions of this Article 9, then so long as any such Leasehold Mortgage shall remain unsatisfied of record, the following provisions shall apply:

          (a) Notice of Default. The Landlord, upon serving upon the Tenant any notice of default pursuant to the provisions of Article 17 hereof, or any other notice under the provisions of or with respect to this Lease, shall also serve a copy of such notice upon the Leasehold Mortgagees of which the Landlord has notice pursuant to Section 9.2 hereof holding the first priority mortgage on the leasehold estate hereunder, in accordance with Section 22.14 hereof.

          (b) Right to Remedy Defaults. Any Leasehold Mortgagee, in case the Tenant shall be in default hereunder, shall have the right to remedy such default, or cause the same to be remedied, during the cure time (if any) following notice of default provided in Section 17.1 and any additional time as may be provided in Section 9.4(c), and the Landlord shall accept such performance by or at the instance of such Leasehold Mortgagee as if the same had been made by the Tenant. In addition, any Leasehold Mortgagee shall have the right to remedy such default, or cause the same to be remedied, within ten (10) days of the expiration of the Tenant’s cure period under Section 17.1 if such default is a monetary default, and within thirty (30) days of the expiration of the Tenant’s cure period under Section 17.1 if such default is a non-monetary default.

          (c) Leasehold Mortgagee’s Right to Prevent Termination/Exercise Purchase Option. Anything herein contained to the contrary notwithstanding, upon the occurrence of any Event of Default, the Landlord shall take no action to effect a termination of this Lease without first giving to the Leasehold Mortgagee written notice thereof and a reasonable time thereafter, such reasonable time to be determined by the Landlord in its reasonable discretion, and in any event such reasonable time not to exceed six (6) months (such reasonable time being referred to in this Lease as the “Forbearance Period”), within which either (i) to obtain possession of the Premises (including possession by a receiver) or (ii) to institute, prosecute and complete foreclosure proceedings or otherwise acquire the Tenant’s interest under this Lease with diligence and, subject to the Leasehold Mortgagee’s obligation to perform all obligations

16

arising from time to time as they become due during the Forbearance Period as provided below, to assume all of the Tenant’s obligations under this Lease. Notwithstanding anything contained in this Lease to the contrary, a Leasehold Mortgagee shall be required to comply with the obligations of the Tenant to maintain the Premises in compliance with Laws and to make and keep the Premises safe and buildable, and with respect to the Leasehold Mortgagee’s obligation to make and keep the Premises safe and buildable, the Leasehold Mortgagee shall be required to take all reasonable measures to make the Premises safe within sixty (60) days of receipt of notice from the Landlord that an Event of Default has occurred.

          (d) Exercise of Remedies. In the event that the Leasehold Mortgagee holding the Exclusive Leasehold Mortgagee Rights (as defined in Section 9.4(f)) seeks to exercise its available remedies under its leasehold mortgage, then the commencement of such exercise shall be an automatic exercise by said Leasehold Mortgagee of the Tenant’s option to purchase the Land, and shall be subject to the provisions of Article 23 hereof, including without limitation the execution and delivery of the Purchase Agreement as defined in Section 23.1 hereof. In the event that said Leasehold Mortgagee commences such exercise but fails to acquire the Land on the scheduled closing date established under the Purchase Agreement and such failure is not solely and directly due to the inability of the Landlord to close due to a default or otherwise, then the provision of Article 10.2.1(c) hereof shall be applicable and annual Base Rent hereunder shall increase to fair market rent for the Property, determined in accordance with the procedures set forth in Schedule 9.4(d) hereof, taking into consideration the Permitted Uses as such Permitted Uses may be modified as provided below, and effective as of the scheduled closing date under the Purchase Agreement. Furthermore, in such event, neither said Leasehold Mortgagee nor any assignee of said Leasehold Mortgagee shall have the benefit of any First Option Term nor Second Option Term if not previously exercised by the Tenant pursuant to the provisions of Section 1.5 hereof. However, in such event, said Leasehold Mortgagee may seek the consent of the Landlord, such consent not to be unreasonably withheld, conditioned or delayed, to change the use of the Land from the Permitted Uses under Section 2.1 to another use, so long as such other use is in compliance with Laws.

          (e) Insurance. The Landlord agrees that the name of any Leasehold Mortgagee may be added to the “Loss Payable Endorsement” of any and all insurance policies required to be carried by the Tenant hereunder.

          (f) Benefit of Provisions. The provisions of this Article 9 are for the benefit of, and are to be enforceable by, each Leasehold Mortgagee to the extent more than one Leasehold Mortgage is permitted to be granted hereunder. If there is more than one Leasehold Mortgagee, the senior Leasehold Mortgagee shall be entitled to exercise the remedies of a Leasehold Mortgagee which are by their nature impossible or impractical to be exercised by more than one Leasehold Mortgagee (collectively, “Exclusive Leasehold Mortgagee Rights”). Unless a Leasehold Mortgagee provides the Landlord with written evidence to the contrary in the form of a subordination or intercreditor agreement executed by the relevant Leasehold Mortgagees, the Leasehold Mortgagee who is the first Leasehold Mortgagee of record shall be deemed to be the senior Leasehold Mortgagee and the holder of the Exclusive Leasehold Mortgagee Rights. The Landlord may rely on a current certification or commitment of the title insurance company providing title insurance to the Tenant (or if none, a title insurance company chosen by the Landlord) with respect to the Premises as to which Leasehold Mortgagee is the first Leasehold Mortgagee of record. All reasonable costs, including Legal Costs, incurred by the Landlord in connection with such certification or commitment shall be paid by the Tenant as Additional Rent. To the extent that there is more than one Leasehold Mortgagee at any time, all references to “Leasehold Mortgagee” contained in this Lease shall be read in the context of and subject to the terms of this Section 9.4(f).

17

          (g) Modification. No agreement between the Landlord and the Tenant modifying, canceling or surrendering this Lease shall be effective without the prior written consent of the Leasehold Mortgagee.

          (h) Merger. No union of the interests of the Landlord and the Tenant herein shall result in a merger of this Lease with the fee interest.

          9.5. Lending Institutions. A “Lending Institution” shall mean a national bank, commercial bank, savings bank, savings and loan institution, trust or insurance company, real estate investment trust, pension, welfare or retirement fund, conduit lender or investment banking firm or any combination of the foregoing, or any other institutional, or the like, lender who traditionally makes loans secured by real estate interests and is authorized to lend money in the Commonwealth of Massachusetts under Laws, or any other lender approved by the Landlord, such approval not to be unreasonably withheld.

ARTICLE 10
Assignment and Subletting

          10.1. Subletting. The Tenant may not sublet all or any portion of the Land without the prior written consent of the Landlord which consent shall not be unreasonably withheld, conditioned or delayed. If consent to a subletting is granted, such subletting conditions would include at a minimum, the proviso that (i) such subletting complies with all of the provisions of this Article 10; (ii) the sublease with the permitted subtenant is in all respects consistent with, and in accordance with, this Lease, including without limitation Section 2.1 hereof and (iii) the following information and documentation is provided to the Landlord at least thirty (30) days prior to the effective date of such subletting:

A.	The name of the proposed subtenant and a copy of the proposed form of sublease (with a duly executed copy of such sublease to promptly follow upon execution thereof);
B.	Evidence that the proposed subtenant’s business is in compliance with the Permitted Uses of the Land;
C.	Certificates of Good Standing (or certificates of qualification to do business in the Commonwealth of Massachusetts if such subtenant is a foreign entity) of the proposed subtenant issued by the Secretary of the Commonwealth of Massachusetts;

          In the event of any subletting of all or any portion of the Premises, it shall be a condition of any such sublease that the subtenant agree in writing with the Landlord that the subtenant will not breach, nor cause the Tenant to breach, any of the provisions of this Lease. Furthermore, any such subletting shall not relieve the Tenant of its obligations under this Lease. Finally, it shall be a condition of any such subletting that: (i) each sublease shall be subject and subordinate to this Lease and the rights of the Landlord hereunder; (ii) any violation of any provision of this Lease, whether by act or omission by any subtenant shall be deemed a violation of such provision by the Tenant, it being the intention and meaning of the parties that the Tenant shall assume and be liable to the Landlord for any and all acts and omissions of any and all subtenants with respect to this Lease, provided, that this Lease shall not be terminated due to default of any subtenant so long as such default does not constitute or result in an Event of Default under this Lease; (iii) each such sublease shall provide that in the event this Lease is terminated prior to

18

the expiration of such sublease, then at Landlord’s option, the subtenant thereunder will either attorn to the Landlord and waive any right the subtenant may have to terminate the sublease, or surrender possession thereunder as a result of the termination of this Lease, and the sublease shall terminate simultaneously with the termination or expiration of the Lease; and (iv) subject to the rights of any Leasehold Mortgagee hereunder, each sublease shall provide that in the event the subtenant receives a written notice from the Landlord stating that an Event of Default has occurred under this Lease, the subtenant shall thereafter be obligated to pay all rentals accruing under such sublease directly to the Landlord or as the Landlord may direct. No sublease shall affect the Permitted Uses. Any attempted sublease in violation of the terms of this Article 10 shall be void. Tenant shall not directly or indirectly collect or accept any payment of rent under any sublease for any period in excess of thirty (30) days in advance.

          10.2. Assignment.

          10.2.1 Except as otherwise provided in Article 9 hereof, the Tenant shall not, directly or indirectly, assign or otherwise transfer its interest under this Lease without the Landlord’s prior written consent, which may be withheld or granted in Landlord’s sole and absolute discretion, except as provided in subsection 10.2.1(c) below.

          (a) In the event that the Tenant obtains Landlord’s consent, it shall be a condition of any such assignment that: (i) each assignment shall be subject and subordinate to this Lease and the rights of the Landlord hereunder; and (ii) any violation of any provision of this Lease, whether by act or omission by any assignee shall be deemed a violation of such provision by the Tenant, it being the intention and meaning of the parties that the Tenant shall be liable to the Landlord jointly with such assignee for any and all acts and omissions of any and all assignees with respect to this Lease.

          (b) Notwithstanding the foregoing, however, Tenant may assign, transfer or otherwise alienate its entire interest under this Lease to an entity which is not a Prohibited Person (as defined in a certain Project Grant Agreement between the Landlord and the Tenant dated as of November 20, 2007, attached to this Lease as Exhibit E (the “Project Grant Agreement”)) and (a) is controlling, controlled by, or under common control with Tenant, (b) is the assignee under a so-called sale/leaseback transaction pursuant to which the assignee shall assume all obligations of Tenant hereunder and will remain jointly and severally liable with the assignee for Tenant’s obligations under this Lease and whereby Tenant shall be the sole tenant under this Lease, or (c) acquires, or to which there is transferred, whether by merger or otherwise, substantially all of the assets of Tenant or to an entity from which, whether by merger or otherwise, Tenant acquires all or substantially all of the assets of such entity (each, a “Merger or Acquisition Event”); provided, further, that promptly after such a Merger or Acquisition Event, Tenant shall notify Landlord of such event and provide Landlord with sufficient financial information to enable Landlord to determine that the new entity has the financial capability to fulfill Tenant’s obligations under this Lease. Within ten (10) days of such assignment under this Section 10.2.2(c), the Tenant shall execute and deliver to Landlord an assignment and assumption agreement whereby the successor tenant assume all obligations of Tenant under this Lease, and agrees with Landlord to be bound by all of the terms and provisions hereof.

          (c) In the event that the Leasehold Mortgagee holding the Exclusive Leasehold Mortgagee Rights (as defined in Section 9.4(f)) seeks to exercise its available remedies under its leasehold mortgage, then, as provided in Section 9.4(d) hereof, the commencement of such exercise shall be an automatic exercise by said Leasehold Mortgagee of the Tenant’s option to purchase the Land, and shall be subject to

19

the provisions of Article 23 hereof, including without limitation the execution and delivery of the Purchase and Sale Agreement as contemplated by Section 23.1. However, in the event that said Leasehold Mortgagee commences such exercise, including without limitation the execution and delivery of the Purchase and Sale Agreement as contemplated by Section 23.1 hereof, but fails to acquire the Property on the closing date established under the Purchase and Sale Agreement, and such failure is soley and directly a result of a default by the Seller beyond any applicable notice and cure period, then annual Base Rent hereunder shall automatically increase to fair market rent for the Land, determined as provided in Schedule 9.4(d) hereof, and in such instance the subsequent assignment to a third party by said Leasehold Mortgagee hereunder shall be subject to Landlord’s prior written consent, such consent not to be unreasonably withheld as opposed to a sole discretion standard.

          10.3. Expenses of Landlord. Tenant shall pay all expenses incurred by the Landlord, including reasonable attorneys’ fees and disbursements, in connection with any request by the Tenant for consent by the Landlord to subletting or assignment of this Lease.

ARTICLE 11
Casualty Damage

          11.1. Restoration. In the event of a casualty to the Project, if the Tenant elects to restore the Project, then Tenant, at Tenant’s sole cost and expense, and with all due diligence, and without regard to the coverage, amount or availability of proceeds of any insurance, shall restore, repair, replace or rebuild the Project to the extent as Tenant shall determine necessary for the Permitted Uses, subject to receipt of any approvals required to effectuate such restoration and compliance with the requirements of this Lease. Prior to the commencement of any such reconstruction, Tenant shall provide the Landlord with documentation to substantiate funds available to return the Land to a safe and buildable condition with all structures and other improvements removed from the Land, unless otherwise elected by the Landlord.

          11.2. Conditions of Work. Except as otherwise provided in this Article 11, the conditions under which any Work is to be performed and the method of proceeding with and performing the same shall be governed by all of the provisions of Article 19.

ARTICLE 12
Eminent Domain and Public Dedication

          12.1. Total, Partial Taking; Termination of Lease. If, during the Term, there is any taking of all or any part of the Land and the Improvements or any interest in this Lease by (i) the taking or condemnation by any public or quasi-public authority, or private corporation or individual having the power of condemnation (“Condemnor”) of the title to or the possession or use of all or part of the Land by virtue of eminent domain or for any public or quasi-public use and (ii) a voluntary sale or transfer by the Landlord to any Condemnor, either under threat of condemnation or while legal proceedings for condemnation are pending (“Condemnation”), the rights and obligations of the Landlord and the Tenant shall be as follows:

          12.1.1 Total Taking.

          If title to the whole or substantially all of the Land and Improvements shall be taken by Condemnation, this Lease shall terminate and expire on the date of such Condemnation and the

20

Additional Rent reserved shall be apportioned and paid to the date of such Condemnation, except that, if not reduced or eliminated due to the Tenant seeking a real estate tax abatement proceeding in accordance with applicable Laws, the Tenant shall pay the Impositions due as of the date of the Condemnation, including without limitation any amounts due under the TIF Agreement up to the date of such Condemnation. There shall be no adjustment or reapportionment of Base Rent.

          12.1.2 Partial Taking.

          If title to less than the whole or substantially all of the Land and Improvements shall be taken by Condemnation and the portion of the Land and Improvements remaining is not of a size to permit the Premises to be used for the Permitted Uses with the amount of the total compensation, sums or anything of value awarded, paid or received in a total or a partial Condemnation Award (an “Award”) available therefor so as to constitute the same economic value and usefulness as immediately before such Condemnation, the Tenant or the Landlord may, at their option, terminate this Lease within ninety (90) days after such condemnation by serving upon the other party at any time within said ninety (90) day period, a thirty (30) day written notice of such party’s election to so terminate accompanied by a certificate of such party showing, in detail, that the remaining portion of the Land and Improvements are not of a size to permit the Land and Improvements to be used for the Permitted Uses so as to constitute the same usefulness as immediately before such Condemnation. Upon such termination, the Tenant shall not be entitled to any abatement or reduction of Base Rent under this Lease.

          12.1.3 Distribution of Award.

          In the event of a Condemnation and the termination of this Lease, the Award shall be distributed according to the following priority:

          (a) First, to the Leasehold Mortgagee in the amount of the outstanding amount under, and all other sums secured by, its Leasehold Mortgage, but only to the extent that such sums do not exceed the value of the Tenant’s interest in the Improvements, determined at the time of such condemnation was granted;

          (b) Second, to the Tenant in the amount of its interest in the Improvements, less any amounts in respect thereof distributed to any leasehold mortgagee under (a) above;

          (c) Third, to the Landlord and the Tenant in the proportion which the value of Landlord’s reversionary interest in the Land, and the value of the Tenant’s leasehold estate hereunder, respectively, bears to the total of the two, until an amount equal to the value of the Tenant’s leasehold estate less the amount distributed to its Leasehold Mortgagee under clause (a) above has been distributed to the Tenant; and

          (d) the balance (if any) of the Award to the Landlord.

          Any payments to be made to the Tenant under the provisions of this Section 12.1.3 are subject to the condition that no Event of Default, and no condition or circumstance which with the giving of notice or the passage of time would constitute an Event of Default hereunder, exists on the Termination Date and if any such Event of Default or condition or circumstance should then exist, the amount of said payments due to the Tenant shall be reduced by such amount as may be reasonably required to remedy any such Event of Default or condition or circumstance.

21

          12.2. Partial Taking — Lease Continues. In the event of a Condemnation that does not result in a termination of this Lease, the Term of this Lease shall not be reduced or affected in any way. The Tenant shall, after any such Partial Taking, and at its sole cost and expense, repair or cause the repair of any damage caused by such Partial Taking in conformity with the requirements contained or referred to in Section 11 hereof as to restoration after a casualty, or at Tenant’s option make the Land safe and buildable, so that the Land will be in compliance with the standards contained in said Section 11. (Such repairs or restoration, including any changes and alterations and including temporary repairs, are referred to in this Section 12.2 as the “Work”.) Upon completion of such restoration, any remaining portion of the Award will be paid (i) first, to the Landlord to the extent of the value of the Landlord’s interest in the Award (based upon the value of the Landlord’s reversionary interest in the Land as encumbered by this Lease) and (ii) thereafter to the Tenant. If the cost of the Work exceeds the amount of the Award, the deficiency shall be paid by the Tenant.

          12.3. Intentionally Deleted.

          12.4. Restoration of the Land. In the event of a Condemnation which does not result in a termination of this Lease and this Lease is otherwise in full force and effect, the Tenant, at its sole cost and expense shall proceed with reasonable diligence and continuously to repair and restore the remaining part of the Premises to a condition sufficient for the Permitted Uses and so as to be in compliance with all Laws.

          12.5. Intentionally Deleted.

          12.6. Intentionally Deleted

          12.7. Abatement of Base Rent. There shall be no adjustment or abatement of Base Rent as a result of a Condemnation.

          12.8. Temporary Taking. If the whole or any part of the Land or of the Tenant’s interest in this Lease shall be taken by Condemnation for a temporary use or occupancy, the Term shall not be reduced or affected in any way and the Tenant shall be liable for all obligations under this Lease, including the payment of the Base Rent and Additional Rent, without reduction or abatement, in the manner and at the times herein specified and, except only to the extent that the Tenant is prevented from so doing pursuant to the terms of the order of the Condemnation, the Tenant shall continue to perform and observe all of the other covenants and agreements hereof as though such Condemnation had not occurred. In the event of any such Condemnation for a temporary use or occupancy, the Tenant shall be entitled to receive the entire amount of any Award whether such Award is paid by way of damages, rent or otherwise, unless such period of temporary use or occupancy shall extend beyond the Term in which case such Award, after payment to the Landlord therefrom of the estimated cost of restoration of the Land to the extent that the Award is intended to compensate for damages to the Land (unless the Tenant restores the Land in which event such portion of the Award attributable to the cost of restoration shall be the property of the Tenant), shall be apportioned by the Landlord and the Tenant as of the termination date in the same ratio that the part of the entire period for which such compensation is made falling before the termination date and that part falling after, bear to such entire period.

          12.9. Rights of Participation. Each party shall have the right, at its own expense, to appear in a Condemnation proceeding and to participate in any and all hearings and trials.

22

          12.10. Notice of Proceeding. In the event Landlord or Tenant shall receive notice of any proposed or pending Condemnation affecting the Land, the party receiving such notice shall promptly notify the other party of the receipt and contents thereof.

ARTICLE 13
Intentionally Omitted

ARTICLE 14
No Broker Representation

          The Tenant represents and warrants to the Landlord that the Tenant has not dealt with any broker or other person who might be entitled to a commission or similar fee in connection with this Lease or any transaction contemplated hereby or referred to herein. The Tenant hereby agrees to indemnify the Landlord and to hold it harmless from and against any and all loss, liability, claim, cost or expense (including Legal Costs) arising from a breach of the aforesaid representation of the Tenant.

          The Landlord represents and warrants to the Tenant that the Landlord has not dealt with any broker or other person who might be entitled to a commission or similar fee in connection with this Lease or any transaction contemplated hereby or referred to herein. The Landlord hereby agrees to indemnify the Tenant and to hold it harmless from and against any and all loss, liability, claim, cost or expense (including Legal Costs) arising from a breach of the aforesaid representation of the Landlord.

ARTICLE 15
Quiet Enjoyment

          The Landlord agrees that if Tenant shall pay the Base Rent and Additional Rent and perform, fulfill and observe the other obligations and liabilities of Tenant herein, subject to Tenant’s available notice and cure rights hereunder, Tenant shall peacefully and quietly have, hold and enjoy the Land without any manner of hindrance or molestation by the Landlord or anyone lawfully claiming by, through or under the Landlord, subject to all of the provisions of this Lease.

ARTICLE 16
End of Term

          Upon the expiration or other termination of this Lease, including without limitation pursuant to the Tenant’s Termination Option (as defined in Article 1.2 hereof), Tenant shall quit and surrender to the Landlord the Land, and Tenant shall demolish all buildings, structures and fixtures on the Land and shall return the Land free of all buildings, structures and other improvements and in a safe and buildable condition; provided however that the Landlord shall have the option of requiring, within ninety (90) days prior to the end of the term of this Lease or within fifteen (15) days prior to any unscheduled termination of this Lease, that the Tenant surrender the Land with all buildings, structures and other improvements thereon, broom clean, in good order and condition, and Tenant shall remove all of its movable personal property therefrom, including all equipment specific to the Permitted Uses by the Tenant. Notwithstanding anything to the contrary in this Article, the Tenant shall be required to remove all tanks located on the Land.

23

ARTICLE 17

Default

          17.1. Events of Default. An “Event of Default” shall occur: (a) if the Tenant shall neglect or fail to perform any of the monetary covenants, terms and provisions contained in this Lease on Tenant’s part to be performed or observed as of the due date therefor; provided however that an Event of Default shall not be deemed to have occurred until thirty (30) days after the Tenant shall have received notice from the Landlord that such monetary covenant, term or provision has not been complied with and continues uncured after the expiration of such thirty (30) day period, or (b) if a default be made by Tenant in the performance or observance of any of the covenants, terms or provisions contained in Sections 10.1 or 10.2 and such default is not cured within thirty (30) days after the Tenant shall have received notice from the Landlord that such covenant, term or condition has not been complied with, or (c) if the Tenant shall neglect or fail to perform its obligations under Article 5 to effect, maintain or renew any insurance coverages provided for in Article 5 within three (3) business days after receipt of notice of default from the Landlord, or (d) if the Tenant shall neglect or fail to perform any of the other non-monetary covenants, terms or provisions contained in this Lease on the Tenant’s part to be performed or observed within thirty (30) days after receipt of notice of default from the Landlord, or such additional time beyond said 30-day period after receipt of notice of default from the Landlord, as may be reasonably required to correct any non-monetary default, provided, in connection with any cure period exceeding thirty (30) days, that the Tenant is diligently and continuously pursuing a timely cure for such non-monetary default and such non-monetary default is of a nature which is susceptible of cure and is not of a nature which could result in criminal sanctions or a forfeiture of the Landlord’s interest in the Land and does not constitute a threat to public health or safety as reasonably determined by the Landlord which has not been addressed by the Tenant securing the Land and making the Land safe such that, in the Landlord’s judgment reasonably exercised, no such threat exists, provided however that in the event that the Landlord has determined that such threat to public health or safety exists at the Land and the Tenant claims that such threat cannot be addressed and rectified by the Tenant because of the existence of an event constituting Force Majeure affecting only the Tenant, then the Tenant shall notify the Landlord of same and the Landlord shall then have the right, but not the obligation, to address and rectify such threat, with the costs thereof, including Legal Costs, to be paid by the Tenant in advance or (e) if Tenant’s estate shall be sold upon execution or if Tenant shall be adjudicated bankrupt or insolvent, or if a receiver, trustee, or liquidating officer shall be appointed with respect to the Land and is not discharged within ninety (90) days after appointment, or if Tenant shall make an assignment for the benefit of its creditors by trust mortgage, or otherwise, or if Tenant shall file a voluntary petition in bankruptcy or insolvency under any bankruptcy or insolvency law now in force or hereafter enacted (Federal, State, or otherwise), or if any such petition shall be filed involuntarily against Tenant and if such petition shall not be discharged within ninety (90) days after its filing.

          17.2. Indemnity and Hold Harmless Provision. If an Event of Default shall occur, without limiting any other rights or remedies the Landlord may have at law or in equity (the Landlord expressly reserving the right to injunctive relief and/or specific performance) or under this Lease, the Tenant shall indemnify and hold the Landlord harmless from all loss of Base Rent, Additional Rent, damages, costs (including Legal Costs), and expenses which the Landlord may incur from time to time by reason of the occurrence of the Event of Default, together with interest on any unpaid rent at an annual rate which shall be as provided in Section 22.10 hereof from the date on which the same shall be first due and payable, upon demand of the Landlord until the date paid.

24

          17.3. Landlord’s Right to Repossess. Subject to the rights of any Leasehold Mortgagee specified in Sections 9.4 (a) and (c) hereof (provided that such Leasehold Mortgagee has complied with all of its obligations under this Lease), should any Event of Default occur, then, notwithstanding any former breach of covenant or waiver of the benefit hereof or consent in a former instance, the Landlord lawfully may, in addition to any and all rights and remedies otherwise available to the Landlord at law, in equity, and under this Lease, all of which are cumulative, and which the Landlord expressly reserves, and which may be exercised by Landlord sequentially or concurrently in any order, immediately or at any time thereafter, and without demand or notice, enter into and upon the Land or any part thereof in the name of the whole and repossess the same as of the Landlord’s former estate, and expel the Tenant and those claiming through or under it and remove its or their effects (forcibly if necessary) without being deemed guilty of any manner of trespass, and without prejudice to any rights or remedies which might otherwise be used for arrears of Additional Rent or preceding breach of covenant and/or the Landlord may send written notice to Tenant terminating the Term of this Lease; and upon the first of such notice of termination, the Term of this Lease shall terminate. The Tenant covenants and agrees, notwithstanding any termination of this Lease as aforesaid or any entry or reentry by the Landlord, whether by summary proceedings, termination or otherwise, that the Tenant shall be and remain liable for Base Rent paid to the Landlord under this Lease (and there shall be no abatement or refund of any portion of the Base Rent) and the Additional Rent and other charges reserved as they would, under the terms of this Lease, become due if this Lease had not been terminated or if Landlord had not entered or re-entered as aforesaid, and whether the Land be re-let or remain vacant, in whole or in part, or for a period less than the remainder of the Term, and for the whole thereof. The Landlord shall have no obligation to re-let the Land and shall have no obligation to mitigate damages upon the occurrence of an Event of Default hereunder. Any such re-letting of the Land by the Landlord shall be for the benefit of the Landlord.

ARTICLE 18
As Is Delivery Of The Land

The Tenant acknowledges that Tenant is accepting the Land in its AS IS condition, without warranty or representation of any kind by the Landlord.

ARTICLE 19
Design and Construction of Initial Improvements

          19.1. Compliance with Permits, Etc.; Soil Management Plan; Definition of “Initial Improvements”. All Initial Improvements and any Optional Improvements (as hereinafter defined in Section 20) to the Land and any future changes thereto shall be in conformity with this Lease, including all applicable Laws, and in conformity with all of the schematic plans and approvals of the DEC, including without limitation the Unified Permit, and any other relevant permitting authority, and the design approval requirements under the Barnum Road Master Plan dated October 25, 2001. Under no circumstances shall soil be removed from the Land without the prior approval of the Landlord, such approval not to be to be unreasonably withheld or delayed. Any soil to be removed from the Land must be characterized in accordance with the General Excavated Soil Management Plans, Devens, Massachusetts, prepared by Haley & Aldrich, Inc. (November 1996), as amended in March 2000, prior to removal, as well as any applicable Environmental Law, and Landlord’s policies and procedures of general applicability regarding UXO screening, prior to removal. The Tenant shall first offer any clean soil to Landlord, for no consideration. Landlord shall be responsible for removing the stock piled clean

25

soil at Landlord’s sole cost and expense, within a reasonable amount of time after receipt of notice from Tenant of the availability of the stock piled soil and verification that the soil is in fact clean under the Massachusetts Contingency Plan (310 CMR 40.000). In the event that the Landlord does not desire the clean soil, Tenant shall remove the soil at its sole cost and expense. Clean soils shall be defined for purposes of this paragraph as soils that do not contain Oil or Hazardous Materials (as that term is defined in the MCP) at or above Method 1, S-1 standards. Without limiting the effect of any other provision of this Lease, Tenant shall and hereby does agree to indemnify, defend and hold harmless Landlord against any and all damage, cost, expense, claim, action or liability arising from or relating to the removal any soil from the Land and any contamination caused by Tenant’s contractors or agents, removal, transportation and/or disposal of the soils. “Initial Improvements” shall mean the construction of the first phase of a facility for the design, manufacture and assembly of products for renewable energy technologies and related functions including research and development, warehousing and administration as well as associated parking, driveways, storage areas, loading bays and site utilities, subject to and in compliance with the Unified Permit, but not including improvements to be constructed or installed on the Land which shall be Optional Improvements under Article 20 hereof.

          19.2. Permits; Due Diligence. It shall be the Tenant’s responsibility to obtain and pay for any and all permits, inspections, and local approvals (including the construction permits and the building permit) necessary to construct the Initial Improvements in accordance with applicable Laws, and any other alterations or improvements permitted by this Lease and necessary to use the Land and the Initial Improvements. If requested by the Tenant, the Landlord shall cooperate with the Tenant in all reasonable respects at no cost to the Landlord necessary to authorize the Tenant to apply for such permits, inspections and local approvals, and the Landlord shall not be required to incur any costs or any other liability in connection therewith.

          19.3. Contracts for Construction of Initial Improvements. As used in this Article, the term “contractor” shall mean any person or entity who provides labor and/or materials for the construction, repair, restoration or rehabilitation of any portion of the Land or Initial Improvements, whether or not paid by the Tenant, but excluding third-party materials suppliers.

          The Tenant shall select one or more qualified contractors to construct the Initial Improvements, which contractor shall be subject to the approval of the Landlord, such approval not to be unreasonably withheld, delayed or conditioned, at least ten (10) business days prior to the commencement of any construction in the Land. The Landlord approves Turner Construction Company. The Tenant shall provide the Landlord with such documentation as is reasonably satisfactory confirming that the Tenant has the funds available to construct any such Initial Improvements and a copy of the construction contract for the Initial Improvements reflecting the relevant terms thereof, including the costs to construct the Initial Improvements.

          19.4. General Provisions Governing Construction of Initial Improvements.

          (a) No contractor shall commence construction of any Initial Improvement until the building permit and all other permits, certificates, and approvals required by Laws for the commencement of such construction have been issued and remain in effect.

          (b) Once commenced, the construction of each of the Initial Improvements shall be prosecuted continuously and with diligence, subject to the provisions of Section 19.8 with

26

respect to Force Majeure to the extent that the Tenant is prevented by circumstances beyond its control from exercising its rights of self-help with respect thereto.

          (c) When any construction of Initial Improvements is in progress, the Tenant shall require its contractors to maintain (i) worker’s compensation insurance in the amounts required by Laws (or reasonably comparable insurance if such insurance is no longer available), (ii) builder’s risk (or such reasonably comparable insurance) insurance on an “all risk” basis (including collapse) insuring against casualty to such construction for full replacement value of the work performed and the equipment, supplies and materials furnished and stored, unless such insurance coverage is provided under policies carried by the Tenant, (iii) automobile liability in the minimum amounts required by Laws, and (iv) public liability insurance within limits in an amount reasonably satisfactory to the Landlord as indicated by the Landlord from time to time in writing, but in no event less than $2,000,000, and including personal property, fire and extended risk. All such insurance in (iii) and (iv) shall name the Landlord as an Additional Insured thereunder.

          (d) During any construction of Initial Improvements, the Tenant shall comply at all times with the provisions of Schedule 1.2 hereof.

          19.5. Time for Commencement and Completion of Initial Improvements; Conditions Precedent to Commencement of Construction. Notwithstanding any provision of this Lease, including any applicable cure period for a default or Force Majeure, construction of the Initial Improvements shall be completed in accordance with applicable Laws, including the State Building Code and a Certificate of Occupancy issued by the appropriate Governmental Authority upon final completion thereof. The Tenant shall commence construction of the Initial Improvements within sixty (60) days of the Commencement Date and shall complete construction of the Initial Improvements with all reasonable diligence by within twenty-four (24) months of the date hereof. Upon the request of the Landlord, the Tenant shall keep the Landlord apprised of the progress of the Initial Improvements from time to time. Notwithstanding the foregoing, the Tenant shall not commence construction of the Initial Improvements until the following conditions have been met, to the satisfaction of the Landlord:

          (a) No Event of Default by the Tenant then exists hereunder;

          (b) The Tenant shall have complied in all material respects with all applicable Laws, and in conformity with all of the schematic plans and approvals of the DEC, including without limitation the Unified Permit, and the design approval all as more fully detailed on Schedule 19 and shall have obtained all other permits and approvals necessary for the commencement of construction and all appeal periods with respect thereto shall have expired without appeal (collectively, the “Phase I Permits”);

          (c) The Tenant shall have delivered to the Landlord, as assurance that the construction of the Initial Improvements will be fully completed and paid for in accordance with the Phase I Permits the following: (i) copies of a fully-executed guaranteed maximum price contract for the construction of the Initial Improvements; (ii) a sources and uses schedule (or such other evidence as may be satisfactory to the Landlord in its sole and absolute discretion) demonstrating the availability of sufficient funds to construct the Initial Improvements; and (iii) payment and performance bonds of the general contractor (or such other evidence as may be acceptable to the Landlord in its sole and absolute discretion

27

assuring the full payment for and completion of the construction of the Initial Improvements; and

          (d) All other documents, agreements, affidavits and certifications required to be executed and delivered by the Landlord, the tenant, any governmental agency or any third party, in connection with this Lease, the Project Grant Agreement, the TIF Agreement and the transaction contemplated thereby shall have been fully executed in a form satisfactory to the Landlord and delivered.

     19.6. Force Majeure. “Force Majeure” as used herein shall have the meaning given to such term in Section 22.15 hereof.

     19.7. Substantial Completion. “Substantial Completion” shall be deemed to have occurred when construction of the building and site improvements as provided for under the Unified Permit for the first phase of the Project or other applicable approvals has been completed such that all buildings and related infrastructure and site work have been completed (except to the extent of landscaping and similar items that are subject to seasonal conditions and excluding all interior fixtures and equipment), and all completion certificates or similar documentation required under any approval have been issued by the appropriate Governmental Authority.

19.8. Signage. The Tenant shall seek and receive the prior written approval of the Landlord and the DEC prior to erecting any signs of any size on the exterior of any Improvements on the Land. Upon the Expiration Date or earlier termination of the Lease, the Tenant shall remove, at its sole expense, any signs erected by the Tenant. The Tenant shall, in addition, be required to comply with all other applicable Laws relating to the erection and approval of signs.

ARTICLE 20
Alterations and Optional Improvements; No Landlord Obligations to Make Initial Improvements or Optional Improvements

     20.1. Conditions for Making Tenant Alterations and Optional Improvements. The Tenant shall have the right to make alterations, additions and changes to the Land, provided that same are consistent with the Tenant’s ability to operate the Land for the Permitted Uses (collectively “Optional Improvements”), on the following terms and conditions:

          (a) Except for Optional Improvements which (i) cost less than $100,000 (subject to adjustment as provided in Section 11.1 hereof), or (ii) do not involve significant structural, mechanical or electrical alterations or alterations that would be subject to Design Review as set forth in Schedule 19, whether or not such threshold cost is exceeded, such as the re-arrangement of internal walls of the Initial Improvements, the Tenant shall not undertake construction of any Optional Improvement, including the demolition, erection, addition or material alteration of any building or structure, roadway, walkway, utility, sewer or drain main, exterior sign, parking area, or landscaped area, without furnishing to the Landlord any construction plans prepared by or on behalf of the Tenant in connection with such Optional Improvements, together with a project certificate reasonably acceptable to the Landlord from an architect or engineer overseeing the construction of such improvements (the “Project Certificate”) that such Optional Improvements are in full compliance with Laws, including the then applicable zoning laws of the DEC.

28

          (b) The provisions of Sections 19.1, 19.2, 19.3, 19.4 19.5 (except only for the specific time limits provided therein with respect to commencement and completion of construction of the Optional Improvements), 19.6 and 19.8 of this Lease shall apply with full force and effect to the design and construction of any Optional Improvement undertaken pursuant to this Article 20.

          (c) The Landlord shall have no obligations, responsibilities, liabilities or duties whatsoever with respect to the design, construction, maintenance, repair, management, insurance, safety, alteration or care or compliance with Laws of any of the Initial Improvements or Optional Improvements or the Land generally, including without limitation the building and other improvements located on the Land as of the date hereof, the responsibility for which the Tenant hereby expressly assumes.

          (d) To the extent that the Tenant decides to design and construct Optional Improvements on Lot 2 consisting of a so-called “Tank Farm” and related infrastructure (collectively, the “Tank Farm Improvements”), in addition to all of the permitting requirements imposed under Articles 19 and 20 and otherwise hereunder, the Tenant acknowledges and agrees that Tenant shall relocate and reconstruct the access road and trail system lying south of the Land to a location approved in advance by the Landlord, and shall comply with all requirements of the applicable unified permit, including without limitation design review and screening requirements.

          (e) The Landlord acknowledges it has approved the so-called second phase of the Project as identified in the Unified Permit.

ARTICLE 21
Ownership of Improvements

          At all times during the Term, (i) the Landlord shall continue to have title to the Land and (ii) the Tenant shall have title to all improvements constructed by the Tenant upon the Land, subject to the provisions of this Lease upon termination thereof. Upon the Expiration Date or earlier termination of this Lease, the Tenant shall execute and deliver to the Landlord, unless the Landlord has requested and the Tenant has completed demolition of the Improvements, or Tenant is otherwise required to demolish the Improvements in accordance with Article 16 hereof, a bill of sale for all the Improvements and fixtures then existing on the Land and owned by the Tenant, in form for filing with the Registry. Upon the Expiration Date or a termination of this Lease prior to the Expiration Date, the Landlord shall have the right to file a certificate with the Registry to the effect that this Lease has expired or terminated in accordance with its terms and such Certificate shall forever estop the Tenant under this Lease or at law or in equity from asserting any rights of the Tenant hereunder and upon the filing of such Certificate, full title to the Improvements then existing on the Land shall automatically, without more, vest in the Landlord.

ARTICLE 22
Miscellaneous Provisions

          22.1. Nondiscrimination.

29

          (a) Tenant shall not discriminate against any qualified employee, applicant for employment, subcontractor or any person or firm seeking to provide goods or services to the Tenant, nor shall Tenant deny any person access to the Premises or to any activities or programs carried out pursuant to this Lease because of the race, color, national origin, ancestry, age, sex, religion, physical or mental handicap, or sexual orientation. The Tenant shall comply with all applicable federal and state statutes, rules and regulations prohibiting discrimination in employment.

          (b) Tenant shall give consideration to the extent practicable to encouraging recruitment of minorities, women, disabled persons and Vietnam-era veterans for the Project.

          (c) Tenant shall give consideration to the extent practicable to contacting, encouraging and utilizing minority- and women-owned business enterprises in the procurement of materials and equipment for the Project.

          22.2. Intentionally Deleted.

          22.3. The Landlord’s Liability; The Tenant’s Liability. No official, employee or consultant of the Landlord shall be personally liable to the Tenant or to any successor in interest or person claiming through or under the Tenant in the event of any default or breach of this Lease, or for any amount which may become due or on any claim, cause or obligations whatsoever under the terms of this Lease. All claims against the Landlord shall be governed by the provisions of this Lease. No officer, director, or employee of the Tenant shall be personally liable to the Landlord or to any successor Landlord in the event of any default or breach of this Lease, or for any amount which may become due or on any claim, cause or obligations whatsoever under the terms of this Lease.

          22.4. Status Report. The Landlord and the Tenant agree at any time and from time to time, upon not less than fifteen (15) business days prior written request by the other, to execute, acknowledge and deliver to the other a statement in writing certifying that this Lease is unmodified and in full force and effect (or if there have been modifications, that the same is in full force and effect as modified, and stating the modifications), that either under the Lease there is no default and no event has occurred which, with the passage of time or the giving of notice or both, would constitute a default, or that a default exists under this Lease and specifying the nature thereof, the dates to which the Base Rent and other charges have been paid in advance, and such additional items as a prospective subtenant or leasehold mortgagee or any prospective assignee of the Tenant or of any subtenant, subleasehold mortgagee or leasehold mortgagee may reasonably require. It is intended that any such statement delivered pursuant to this Section 22.4 may be relied upon by any prospective subtenant or leasehold mortgagee or any prospective assignee of the Tenant or any subtenant or leasehold mortgagee.

          22.5. Provisions Binding. The term “Landlord” wherever used in this Lease shall be deemed to mean the body politic, or the corporation, persons or other legal entity holding the rights of the Landlord under this Lease at the time in question, and it is understood and agreed that the covenants and agreements contained herein shall be binding upon the Landlord and its successors only with respect to breaches occurring during the Landlord’s and the Landlord’s successors’ respective ownership of the entire interest of the Landlord hereunder. The term “Tenant” wherever used in this Lease shall be deemed to mean the limited liability company, corporation, persons or other legal entity holding the rights of the Tenant under this Lease at the time in question.

30

          The Tenant specifically agrees that any recovery to it under this Lease shall be limited to a maximum amount equal to the value of the Landlord’s interest in the Land. In any event it is specifically agreed that neither the Landlord nor its constituent agencies or other divisions shall ever be liable to the Tenant for any such judgment in excess of such maximum amount, and in no event shall the Landlord or its constituent agencies or other divisions ever be liable to the Tenant for indirect or consequential damages.

          Except as set forth above, all of the covenants, agreements, stipulations, provisions, conditions, options and obligations herein expressed and set forth shall be considered as running with the Land and shall (unless herein otherwise specifically provided) extend to, bind and inure to the benefit of, as the case may require, the successors and assigns of the Landlord and the Tenant, respectively, or their successors in interest, as fully as if such words were written whenever reference to the Landlord and the Tenant occur in this Lease. The reference contained to successors and assigns of Tenant is not intended to include subtenants or to constitute a consent to an assignment by Tenant not otherwise permitted hereunder. In no event shall the Landlord or the Tenant be liable to the other for indirect or consequential damages under this Lease.

          22.6. Invalidity of Particular Provisions. If any term or provision of this Lease or the application thereof to any person or circumstance shall be invalid or unenforceable, the remainder of this Lease, or the application of such term or provision to persons or circumstances other than those as to which it is invalid or unenforceable, shall not be affected thereby, and each term and provision of this Lease shall be valid and shall be enforceable to the fullest extent permitted by law.

          22.7. Filing of a Memorandum of Lease . Both the Landlord and the Tenant consent to the filing of a Memorandum of Lease with respect to this Lease with the Registry of Deeds, substantially in the form of Exhibit F (the “Memorandum of Lease”).

          22.8. Waiver. No failure by Landlord or Tenant to insist upon the strict performance of any provisions, condition or agreement contained in this Lease, to be performed by the other, shall ever be deemed to be a waiver of such provisions as to any subsequent event constituting nonperformance or observance by such party. All waivers shall be in writing, contain the word “waiver”, and specifically identify the obligation or other provision of this Lease being waived in order to be effective.

          22.9. Landlord’s Right of Self-Help. As an additional alternative remedy to the other remedies provided for in this Lease, the Landlord shall have the right (but not the obligation) to cure any Event of Default for and on behalf of the Tenant (a) relating to the Tenant’s obligations regarding insurance, maintenance, repair and use of the Land, or (b) relating to the obligations of the Tenant to comply with Laws, including, without limitation, such Laws as are applicable to Hazardous Materials, or (c) relating to the obligations of the Tenant to discharge liens (or bond off such liens or otherwise remove them of record), if such default, if not promptly cured, results, or can reasonably be anticipated to result, in a dangerous, unhealthy or unsafe condition at the Land, or in a forfeiture, condemnation or loss of the interest of the Landlord in the Land, provided however that the Landlord’s right of self-help shall not be exercised by the Landlord prior to providing the Tenant with an additional notice of the Landlord’s intention to exercise its right of self-help and, so long as the Landlord has determined that there is no imminent threat to public health or safety, providing the Tenant with an additional cure period, not to exceed seven (7) days. Expenses of the Landlord incurred in exercising its rights under this Section 22.9, shall be Additional Rent hereunder. The Landlord shall not incur any liability as a result of any exercise of the rights under this Section 22.9, and the Tenant shall indemnify and hold the Landlord

31

harmless from all costs, claims, losses and liabilities in any way relating to the same, including “Legal Costs” as hereinafter defined in Section 22.17. Any amount payable by the Tenant to the Landlord pursuant to the provisions of this Section 22.9 shall be paid within thirty (30) days of receipt of a bill for such amount from Landlord.

          22.10. Interest. All payments becoming due under this Lease and not paid when due shall bear interest from the applicable due date until received by Landlord at the lesser of: (i) four percent (4%) per annum above the base rate announced from time to time by Bank of America (or in the event that such bank ceases to exist to issue such a rate, a comparable rate of a comparable financial institution); or (ii) the maximum annual amount permitted by applicable Law.

          22.11. Amendments. All negotiations, considerations, representations and understandings among the Landlord and the Tenant are incorporated herein and may be modified or altered only by agreement in writing between the Landlord and the Tenant.

          22.12. Governing Law. This Lease shall be governed exclusively by the provisions hereof and by the substantive laws of The Commonwealth of Massachusetts, without reference to its conflict of laws provisions.

          22.13. Notices. Any notice or other communication required or permitted hereunder, shall be given in writing and delivered by hand, by overnight courier (including Federal Express and similar recognized overnight delivery services) or by express mail or certified mail-return receipt requested, and shall be deemed given or made upon the earlier of (i) actual receipt or actual refusal of the addressee to accept delivery of such notice or communication (ii) the date of deposit with any such overnight courier, all charges prepaid, or (iii) the day same is deposited in the mails, all charges prepaid, addressed as set forth below, or at any other address that such party may hereafter specify from time to time in writing.

If to the Landlord:	Massachusetts Development Finance Agency
	160 Federal Street
	Boston, MA 02110
	Attn.: General Counsel
With a copy to:	Diane M. McDermott, Esq.
	McCarter & English, LLP
	265 Franklin Street
	Boston, MA 02110
If to the Tenant:	Evergreen Solar, Inc.
	138 Bartlett Street
	Marlborough, MA 01752
	Attn: Richard Chleboski, Vice President
With a copy to:	Goodwin Procter, LLP
	53 State Street
	Exchange Place

32

Boston, MA 02109

Attn: R.J. Lyman, Esquire

          Eric Labbe, Esquire

          Wherever in this Lease notice or requests to Landlord must be given in accordance with Section 22.13 and a response is required with a specified period of the envelopes containing the notice or request shall bear on the outside thereof, and the first page of such notice at the top of such page, the following legend, printed in bold-face type in a font of at least 14 points in size:

NOTICE
THIS NOTICE REQUIRES REPLY.

WITHIN [ ] DAYS with the blank in such legend filled in with the number of days for notice or request referred to in the applicable Section of this Lease, as appropriate.

          22.14. Intentionally Deleted.

          22.15. Force Majeure. In any case where the Tenant is required to do any act other than the payment of money, delays caused by or resulting from Acts of God, war, civil commotion, fire, flood or other casualty, strikes, unavailability of materials or equipment, unusually severe weather or other causes beyond the reasonable control of the Tenant shall not be counted in determining the time when the performance of such act must be completed.

          22.16. Survival of Certain Provisions. Notwithstanding any provision herein to the contrary, the provisions of Section 5.4, Section 9.4(d); Article 3 and Article 8 herein shall survive the expiration or earlier termination of this Lease.

          22.17. “Legal Costs” Defined. In the event that the Landlord chooses to be represented by counsel in its sole discretion, the Tenant’s indemnification and reimbursement responsibilities under any provision of this Lease, whether incurred in connection with a litigation matter or any other legal matter, shall include all court and litigation costs and alternative dispute resolution costs borne by the Landlord and reasonable legal fees, court and litigation costs and alternative dispute resolution costs and expenses charged by private counsel employed by the Landlord, all of which costs and expenses shall be defined herein collectively as “Legal Costs”.

ARTICLE 23
Tenant’s Option to Purchase

          23.1. Grant of Option; Option Period.

          (a) Landlord hereby grants to Tenant the option to purchase the Land upon the terms and conditions set forth herein (the “Option”):

          (b) The Term of this Option is for a period commencing upon execution hereof and terminating upon the expiration of the Initial Term of the Lease (the “Option Period”), as same may be sooner terminated in accordance with the express provisions of this Article 23 or by agreement of the parties. The last day of the Option Period is hereby defined to be the “Option Expiration Date”. If Tenant does not exercise the Option during the Option Period, this Option Agreement shall terminate upon the

33

expiration of the Initial Term. Provided that the Tenant has timely exercised the Option during the Option Period, the Tenant shall have the right to remain in possession of the Land upon the expiration of the Initial Term subject to the terms and provisions of this Lease as then in effect and subject to compliance with the provisions of the Purchase and Sale Agreement attached hereto as Exhibit G (the “Purchase Agreement”).

          23.2. Purchase Notice and Deposit. Tenant may, subject to the terms and conditions hereof, exercise the Option in respect of the Land by delivering notice (the “Purchase Notice”), in writing to Landlord at the address set forth above, or at such other address as Landlord has provided to Tenant by written notice, at anytime during the Option Period. The Purchase Notice shall set forth the closing date, such date to be not later than ninety (90) days nor earlier than sixty (60) days after the date of such Purchase Notice, subject to extensions and/or earlier dates of closing as provided in the Purchase Agreement. Within thirty (30) days after delivery of the Purchase Notice, Landlord and Tenant shall work with each other in good faith to finalize the terms of and execute the Purchase Agreement, substantially in the form of Exhibit G hereto, modified to complete the relevant portions of such Purchase Agreement to reflect the specific terms of the Option exercise, and shall simultaneously with the execution of said Purchase Agreement deposit the amount of five percent (5%) of the then established Purchase Price (hereinafter defined) for the Land to be purchased, said deposit to be made in cash, by wire transfer or certified or cashier’s check (the “Purchase Deposit”) in escrow with the Boston, Massachusetts office of Tenant’s nationally recognized title insurance company (the “Escrow Agent”), all subject to the provisions of this Article 23 and in accordance with the terms of the Purchase Agreement (and all references in this Option Agreement to the Purchase Deposit shall include any interest earned thereon) and an escrow agreement reasonably acceptable to Landlord and Tenant.

          23.3. Purchase Price.

          The purchase price (the “Purchase Price”) for the Land if the Option is exercised shall be determined as follows:

          (a) The Purchase Price for the Tenant’s purchase of the Land in effect from the Commencement Date of this Lease through and including the fifth (5^th) anniversary of the Commencement Date shall be $2,760,000.

          (b) From and after the fifth (5^th) anniversary of the Commencement Date, the Purchase Price shall be the Purchase Price determined in accordance with the procedures noted in Schedule 23.3 hereof, PROVIDED, HOWEVER, the Purchase Price shall never be lower than the sum set forth in Section 23.3(a).

          23.4. Negative Covenant in Deed to the Land. In the event that the Tenant exercises the Option, then the Deed to the Land shall contain a negative covenant to the effect that if the Tenant sells the Land, the Tenant shall be required to repay to Landlord the proceeds then due under the grant issued by it pursuant to the Project Grant Agreement. The Deed shall also include appurtenant easement rights necessary for the Tenant to comply with its ongoing obligations under Article 20 regarding the Tank Farm Improvements to the extent that Tenant constructed or intends to construct the Tank Farm Improvements.

[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY. — SIGNATURES APPEAR ON FOLLOWING PAGE.]

34

     WITNESS the execution hereof, under seal, in any number of counterpart copies, each of which counterpart copies shall be deemed an original for all purposes, as of the day and year first above written.

		MASSACHUSETTS DEVELOPMENT FINANCE AGENCY
Witness:	/s/ Richard W. Holtz	By:	/s/ Robert L. Culver Robert L. Culver, President and C.E.O. Executive Officer
		EVERGREEN SOLAR, INC.
Witness:	/s/ Satvinder K. Dhami	By:	/s/ Richard Chleboski Richard Chleboski, Vice President
APPROVED AS TO FORM:
MASSACHUSETTS DEVELOPMENT FINANCE AGENCY
By:	/s/ Richard W. Holtz
	Richard W. Holtz, General Counsel

35

GLOSSARY OF DEFINED TERMS

“Additional Rent” is defined in Section 3.5

“Advance Notice of Assignment” is defined in Section 10.2

“Appurtenant Easements” is defined in Section 1.1

“Army” is defined in Section 8.5

“Army Deed” is defined in Section 8.5

“Assignment and Assumption Agreement” is defined in Section 10.2

“Award” is defined in subsection 12.1.2

“Base Rent” is defined in Section 3.1

“Commencement Date” is defined in Section 1.3

“Condemnation” is defined in Section 12.1

“Condemnor” is defined in Section 12.1

“Contractor” is defined in Section 19.3

“DEC” is defined in Section 1.1

“Environmental Laws” is defined in Section 8.1

“EPA” is defined in Section 8.5

“Escrow Agent” is defined in Section 23.2

“Event of Default” is defined in Section 17.1

“Exclusive Leasehold Mortgagee Rights” is defined in Section 9.4

“Expiration Date” is defined in Section 1.3

“FFA” is defined in Section 8.5

“First Option Term” is defined in Section 1.5

“Forbearance Period” is defined in Section 9.4

“Force Majeure” is defined in Section 22.15

“Governmental Authority” is defined in Section 1.1

“Grantee” is defined in Section 8.5

“Hazardous Materials” is defined in Section 8.1

“Impositions” or “Imposition” is defined in Section 4.1

“Improvements” is defined in Section 1.1

“Initial Improvements” is defined in Section 19.1

“Initial Term” is defined in Section 1.3

“Insurance Proceeds” is defined in Section 5.2

“Land” is defined in Section 1.1

“Landlord” is defined in the first paragraph of the Lease

“Laws” is defined in Section 2.2(a)

“Leasehold Mortgage” is defined in Section 9.1

“Leasehold Mortgagee” is defined in Section 9.1

“Legal Costs” is defined in Section 22.17

“Lending Institution” is defined in Section 9.5

“Level One Plan” is defined in Exhibit A to this Lease

“Lot 2” is defined in Section 1.1

“Massachusetts Contingency Plan” or “MCP” are defined in Section 8.1

“Memorandum of Lease” is defined in Section 22.7

“Merger or Acquisition Event” is defined in Section 10.2.1(b)

“Net Insurance Proceeds” is defined in Section 11.3

“NPL” is defined in Section 8.5A.

“Option” is defined in Section 23.1(a)

“Option Expiration Date” is defined in Section 23.1(b)

“Option Period” is defined in Section 23.1(b)

“Optional Improvements” is defined in Section 20.1

“Permitted Encumbrances” is defined in Section 1.1

“Permitted Uses” is defined in Section 2.1

- 2 -

“Premises” is defined in Section 1.1

“Project” is defined in the Recitals of this Lease, beginning on page 1

“Project Certificate” is defined in Section 20.2

“Project Grant Agreement” is defined in Section 10.2.1(b)

“Purchase Agreement” is defined in Section 23.1(b)

“Purchase Deposit” is defined in Section 23.2

“Purchase Notice” is defined in Section 23.2

“Purchase Price” is defined in Section 23.3

“Registry” is defined in Section 8.5

“Remedial Work” is defined in Section 8.1

“Rent” is defined in Section 3.3

“Reserved Easements” is defined in Section 1.2

“ROD” is defined in Section 8.5D

“Second Option Term” is defined in Section 1.5

“Substantial Completion” is defined in Section 19.7

“Tank Farm Improvements” is defined in Section 20.1(d)

“Tenant” is defined in the first paragraph of the Lease

“Tenant’s Agents” is defined in Section 8.2(a)

“Tenant’s Indemnity” is defined in Section 8.3

“Tenant’s Termination Option” is defined in Section 1.2

“Term” or “Term of this Lease” is defined in Section 1.3

“TIF Agreement” is defined in Section 4.1

“Unified Permit” is defined in Section 2.1

“UXO Documents” is defined in Schedule 1.2

“UXO Protocol” is defined in Schedule 1.2

“Work” is defined in Section 11.2 and 12.2

- 3 -

SCHEDULE 1.1

PERMITTED ENCUMBRANCES

     1. Terms and provisions of the Quitclaim Deed from the United States of America acting by and through the Secretary of the Army to the Government Land Bank, predecessor-in-interest to MassDevelopment dated May 9, 1996 and recorded in the Worcester County Registry of Deeds (the “Registry”) in Book 17907, Page 1.

     2. Matters shown on plan entitled “Plan of Land Conveyed to the Government Land Bank by the Secretary of the Army, Ayer, Harvard & Shirley, MA.” dated May 9, 1996 and recorded with the Registry in Plan Book 703, Page 112.

     3. Terms and provisions of the Notice of Lease between the United States of America acting by and through the Department of the Army to the Government Land Bank dated May 9, 1996 and recorded with the Registry in Book 17922, Page 223.

     4. Terms and provision of the Quitclaim Deed of Parcel A.6 from the United States of America acting by and through the Department of the Army to Massachusetts Development Finance Agency dated June 18, 2002 and recorded with the Registry in Book 26844 Page 212.

     5. Federal Facility Agreement under CERCLA Section 120, along with Modification No. 1 dated March 27, 1996.

     6. Administrative Consent Order and Covenant Not to Sue, dated May 20, 1996.

     7. General Public Way Declaration Plan recorded with the Registry in Plan Book 822, Plan 22.

     8. Subdivision Regulations dated February 22, 1996 and recorded with the Registry in Book 17968, Page 179.

     9. Landlord’s Reserved Rights. The Tenant acknowledges that the Landlord and its successors will be developing the Devens Regional Enterprise Zone on an ongoing basis and that such development may involve the relocation from time to time of utility systems, roadways and other infrastructure (“Infrastructure”). The Tenant accepts the Land under this Lease subject to the provision that if any relocation or future development activities at Devens should require the location of additional Infrastructure provided such placement does not unreasonably interfere with the Tenant’s use of the Land.

     10. The provisions of the Barnum Road Master Plan dated October 25, 2001.

SCHEDULE 1.2

Notice of UXO, Asbestos, Underground Storage Tanks, Radon, Lead Based Paint, and
Wetlands Provisions

          Unexploded Ordinance. Tenant acknowledges that Devens is the site of a former active military installation, and that there is a possibility that unexploded ordnance (UXO) may be encountered during Tenant’s use and occupancy of the Land. Tenant also acknowledges the notices and provisions relating to UXO contained in the Army Deed pursuant to which the United States Army conveyed Devens to the Landlord, a copy of which has been provided to Tenant.

          Tenant’s due diligence with respect to UXO may include a review of all available records supplied by the Army to the Landlord or its agents relating to the presence or removal of UXO on the Land (the “UXO Documents”), which UXO Documents shall be made available to Tenant at reasonable times upon reasonable notice. Landlord makes no representation or warranty of any kind, nature or description whatsoever with respect to (a) the completeness or accuracy of the information contained in the UXO Documents, or (b) the presence or absence of UXO at the Land. Tenant acknowledges that Landlord has provided the UXO Documents as a convenience to Tenant, and that Tenant is not entitled to rely upon the UXO Documents. It is expressly agreed that nothing herein shall be deemed to preclude Tenant from making its own assessment of the Land for the presence of UXO as provided herein, provided, however, that any such assessment must be conducted in accordance with the terms of the Right of Entry Agreement and in accordance with the ACO as well as any and all applicable laws, rules, regulations, and requirements.

          Seller and Buyer hereby acknowledge that they have agreed on a UXO protocol governing the treatment and disposition of UXO on the Land (the “UXO Protocol”), a copy of which protocol is attached hereto as Exhibit A. Each of the Parties agrees to comply with its respective obligations under the UXO Protocol and to reasonably cooperate with the other in its implementation.

          Notice of Asbestos, Underground Storage Tanks, Radon, Lead Based Paint, and Wetlands.

     (i) Tenant is hereby informed and does acknowledge that friable and non-friable asbestos or asbestos containing materials (“ACM”) may be found on the Land;

     (ii) Tenant is hereby informed and does acknowledge that Underground Storage Tanks (“USTs”) have been located on the Land, but that known USTs have been removed;

     (iii) Tenant is hereby informed and does acknowledge that the Land may be affected by radon. Available and relevant radon assessment data pertaining to the Land is available from Tenant upon request;

     (iv) Tenant is hereby informed and does acknowledge that all buildings that are or had been located on the Land, all of which are believed to have been constructed or rehabilitated prior to 1978, are presumed to contain or have contained lead based paint;

     (v) The Land may contain wetlands which are protected under federal, state and local laws and regulations, including but not limited to, Article VII.C of the Devens By-laws, dated November 18, 1994. Upon execution of the Lease, the Tenant and its successors and assigns shall comply with such laws and shall comply with Article XII.C of the Devens By-Laws in its forms as of May 9, 1996, and as amended thereafter.

SCHEDULE 9.4(d)

DETERMINATION OF FAIR MARKET RENT

     Within ten (10) days after the Leasehold Mortgagee having the Exclusive Leasehold Mortgagee Rights fails to perform on the closing date established under the Purchase Agreement (as defined in Section 23.1), Landlord and Leasehold Mortgagee shall each choose an appraiser. Each party shall notify the other of the name and date of engagement of its appraiser. If either party fails to choose an appraiser within such time, the monthly Fair Market Rent will be determined by the appraiser chosen by the other party. All appraisers shall be impartial individuals having at least five (5) years’ experience in appraising commercial real estate in the vicinity of the Land. Each appraiser shall prepare an appraisal report and submit it to the party which hired it within thirty (30) days of its engagement. Each party shall promptly deliver a copy of its appraiser’s report to the other party.

     If the two appraisals of Fair Market Rent are within fifteen (15%) of each other, then the average of the two appraisals shall be the Fair Market Rent for the Land. If the two appraisals are not within fifteen (15%) percent of each other, then within fourteen (14) days after receipt by Landlord and Leasehold Mortgagee of both appraisal reports, the appraisers selected by Landlord and Leasehold Mortgagee shall agree on a third appraiser. If the appraisers are unable to agree on the third appraiser within such time, then the third appraiser shall be chosen by the Executive Director of the Greater Boston Real Estate Board, whose qualifications shall be consistent with those set forth above. The third appraiser shall perform an independent third appraisal and shall provide a copy of the appraisal to Landlord and Leasehold Mortgagee and their respective appraisers. The average of the two appraisals which are closest in value shall be the Fair Market Rent for the Land.

     Each party shall pay the costs of its appraiser and one-half of the costs of the third appraiser.

- 2 -

SCHEDULE 23.2

DETERMINATION OF FAIR MARKET VALUE

     Within ten (10) days after Landlord receives Tenant’s notice of the exercise of its election to exercise its Option, Landlord and Tenant shall each choose an appraiser. Each party shall notify the other of the name and date of engagement of its appraiser. If either party fails to choose an appraiser within such time, the Fair Market Value will be determined by the appraiser chosen by the other party. All appraisers shall be impartial individuals having at least five (5) years’ experience in appraising commercial real estate in the vicinity of the Land. Each appraiser shall prepare an appraisal report and submit it to the party which hired it within forty-five (45) days of its engagement. Each party shall promptly deliver a copy of its appraiser’s report to the other party.

     If the two appraisals of Fair Market Value are within fifteen (15%) of each other, then the average of the two appraisals shall be the Fair Market Value for the Land. If the two appraisals are not within fifteen (15%) percent of each other, then within fourteen (14) days after receipt by Landlord and Tenant of both appraisal reports, the appraisers selected by Landlord and Tenant shall agree on a third appraiser. If the appraisers are unable to agree on the third appraiser within such time, then the third appraiser shall be chosen by the Executive Director of the Greater Boston Real Estate Board, whose qualifications shall be consistent with those set forth above. The third appraiser shall perform an independent third appraisal and shall provide a copy of the appraisal to Landlord and Tenant and their respective appraisers. The average of the two appraisals which are closest in value shall be the Fair Market Value for the Land.

     Each party shall pay the costs of its appraiser and one-half of the costs of the third appraiser.

EXHIBIT A

Legal Description

     A certain parcel of land shown as Lot 2, containing approximately 23.11 acres of land, on a plan prepared by Chas. H. Sells, Inc. dated November 9, 2007, to be recorded with the Registry of Deeds with the Memorandum of Lease. The plan is entitled “Level I Subdivision Lot 2 Barnum Road” (the “Level One Plan”).

EX-10.37

Exhibit 10.37

EXECUTION

MASSACHUSETTS DEVELOPMENT FINANCE AGENCY

PROJECT GRANT AGREEMENT

     This Project Grant Agreement (the “Agreement”) dated as of November 20, 2007, is entered into between the Massachusetts Development Finance Agency (“MDFA”), a Massachusetts body politic and corporate and a public instrumentality of The Commonwealth of Massachusetts (the “Commonwealth”) established under Chapter 23G of the Massachusetts General Laws as amended (the “Act”) , having its principal office and place of business at 160 Federal Street, Boston, Massachusetts 02110, and Evergreen Solar, Inc., a Delaware corporation, with a principal place of business at 138 Bartlett Street, Marlborough, Massachusetts 01752 (“Grantee”) (MDFA and Grantee are together referred to as the “Parties”).

     Whereas, MDFA is offering financial assistance to Grantee in the form of the Grant (as hereinafter defined) to help defray the costs incurred by Grantee in the design and construction of a facility to be located on certain Land (the “Premises”) owned by MassDevelopment to be leased to Grantee, for the design, manufacture and assembly of products for renewable energy technologies and all related functions, including research and development and warehousing and administration (the “Project”, which term shall exclude the cost of any equipment or fixtures specific to the manufacturing or other activities of Grantee to be conducted by Grantee on the Land);

     Whereas, MDFA’s provision of such grant funds for use on the Project is consistent with the statutory goals set forth in the Act and is expected to lead to substantial economic development activity in the Commonwealth, including without limitation the retention and creation of employment, as more fully set forth in this Agreement;

     Whereas, MDFA’s Board of Directors approved the commitment of funds to Grantee for the Project on August 22, 2007; and

     Now therefore, pursuant to the terms and conditions of the Agreement, MDFA and Grantee agree as follows:

1. Term and Termination

a)	The term of this Agreement shall commence on the date that this Agreement is fully executed by the Parties (the “Effective Date”), and, unless terminated earlier pursuant to the terms of Section 1(b) and Section 6 (Events of Default), shall expire sixty (60) days after the eighth (8th) anniversary of the Effective Date.
b)	MDFA’s obligation to disburse Grant proceeds, however, shall expire in any event on the earlier to occur of (i) the six (6) month anniversary of the date that Grantee has substantially completed the Initial Improvements (as such term is defined in a certain Ground Lease dated on or about the date hereof between MDFA and the Grantee with respect to the Premises and the Project, a copy of which is attached hereto as Exhibit A (the “Ground Lease”)), or (ii) the last day of the twenty-fourth (24th) month after the Effective Date.
c)	This Agreement may be terminated by either MDFA or Grantee if (i) an Event of Default occurs (including the expiration of any applicable cure period) and remains outstanding as of the date of termination and the party seeking to terminate this Agreement hereunder is the Non-Defaulting Party, and (ii) the Non-Defaulting Party has not waived such Event of Default in writing.
d)	The obligations of MDFA to fund any portion of the proceeds under this Grant shall automatically terminate in the event that the Ground Lease is terminated for any reason,

Project Grant Agreement: Evergreen Solar, Inc.

unless termination occurred because the Grantee purchased the Premises pursuant to its option to purchase contained in the Ground Lease.

2.	The Grant; Conditions Precedent to MDFA’s Obligation to Make Grant
	Subject to the provisions of this Agreement, including without limitation the provisions of Section 5 (Payments), Section 8 (Grantee’s Commitments) and Section 9 (Repayment), MDFA shall pay to Grantee a maximum amount of Ten Million Dollars ($10,000,000) (the “Grant”). MDFA shall have no obligation to pay Grantee any amount in excess of the Grant notwithstanding any construction on the Land by Grantee of more than the Project.
	Notwithstanding the foregoing, MDFA shall have no obligation to disburse any of the proceeds of the Grant until such time as it has received (a) Grant funds in the amount of $11,000,000 from the MORE Jobs Program and the Community Development Action Grant through the Executive Office of Housing and Economic Development and (b) Grant funds in the amount of $2,000,000 from the Public Works Economic Development Program through the Executive Office of Environmental Affairs.
3.	Use of Proceeds
	Grantee hereby covenants and agrees that all Grant funds provided by MDFA pursuant to this Agreement shall be used solely to defray the direct hard and soft costs incurred by Grantee in connection with the due diligence, permitting, design and construction of the Project (hereinafter “Project Costs”), and for no other purpose. In no event, however, shall Project Costs include the cost of any equipment or fixtures specific to the manufacturing or other activities of the Grantee to be conducted by Grantee on the Land.
4.	Reporting
	Grantee shall, on a quarterly basis prior to Substantial Completion (as defined in the Ground Lease) and thereafter on an annual basis, provide MDFA with a project status report (the “Progress Reports”), which shall include without limitation (a) a description of completed Project construction milestones, during the period of construction, (b) the stage of the progress of construction of the Project, during the period of construction, and (c) the status of Grantee’s meeting and maintaining the (i) Retained Positions and (ii) new Jobs commitments, as defined and more fully set forth in Section 8; provided that nothing herein shall be deemed to require Grantee to disclose information that is of a proprietary nature. Grantee’s compliance with Grantee’s Commitments (as defined in Section 8) may be subject to continuous assessment by MDFA. In furtherance of the foregoing, Grantee shall provide MDFA with annual reports (the “Annual Reports”), which shall include information setting forth Grantee’s compliance with, and/or variances from, the Grantee’s Commitments. The first Annual Report shall be submitted to MDFA within thirty (30) days of the first anniversary of the Effective Date and each subsequent Annual Report shall be submitted within thirty (30) days of each subsequent anniversary of the Effective Date. In the case of the Grantee’s Commitments set forth in Sections 8(a)-(e), the Annual Report shall include a certification from Grantee’s CEO or CFO concerning Grantee’s compliance with, and/or variances from, the Grantee’s Commitments. Additionally, Grantee shall provide MDFA with such other information, reports, documents and certifications as MDFA may, from time to time, request with respect to the Project and the subject matter of this Agreement within twenty (20) days after such request.
5.	Invoices/Payment Schedule

a) Cost Reimbursement. Grantee shall receive advances of Grant funds on a percentage of completion basis for Project Costs actually incurred for the design and general construction of the Project (collectively the “Total Project Construction Funds”) and upon

Page 2

Project Grant Agreement: Evergreen Solar, Inc.

	the completion of the Project, any Grant funds not yet advanced shall be provided to Grantee subject to the provisions of Sections 1(b) and (c) hereof. The Parties acknowledge that the total amount of MDFA’s funding for the Project’s general construction is Ten Million Dollars ($10,000,000), comprised of the Grant. The Parties acknowledge that the estimated Project Costs for the Initial Improvements and anticipated sources of the Total Project Construction Funds for the Initial Improvements have been provided to MDFA.
b)	Invoices. Grantee may submit invoices for payment using the template provided by MDFA. The invoice shall set forth total Project Costs incurred and paid as of the date of the invoice, the balance of the funds required to complete the Project, and evidence of payment thereof. Grantee shall provide such additional supporting documentation of Project Costs actually incurred as MDFA may request.
c)	Payment Terms. MDFA shall pay disburse Grant funds to Grantee within thirty (30) days after receipt of a properly documented invoice, unless MDFA properly determines that any such payment or any part thereof is otherwise not properly payable pursuant to the terms of this Agreement.

6.

Events of Default

For the purposes of this Agreement, a “Defaulting Party” shall mean any party hereto against which the other party hereto is entitled to assert an Event of Default under this Section 6 and a “Non-Defaulting Party” shall mean with respect to the occurrence of any Event of Default (as defined below), the party to this Agreement that is not the Defaulting Party in connection with such Event of Default. For purposes of this Agreement “Event of Default” shall mean any of the following:

a)	Failure by the Defaulting Party to make, when due, any payment or repayment required under this Agreement if such failure is not remedied within thirty (30) calendar days after written notice of such failure is given by the other party and provided the payment or repayment is not the subject of a continuing good faith dispute;
b)	Material breach of any of the Defaulting Party’s obligations contained in this Agreement, including without limitation the obligations set forth in Section 8(a) or (e), which breaches are not excused by Force Majeure (as defined in Section 16) or cured as provided in the relevant provisions of this Agreement;
c)	Any circumstance: (i) in which the Defaulting Party makes a general assignment for the benefit of creditors (as a symptom of impending bankruptcy), (ii) in which the Defaulting Party files a petition or otherwise commences, authorizes or consents to the commencement of a proceeding or cause of action under any bankruptcy or similar law for the protection of creditors, or where such a petition is filed against Defaulting Party and is not stayed, withdrawn or dismissed within sixty (60) days after such filing, (iii) in which a court of competent jurisdiction shall determine that Defaulting Party is generally not paying its debts as such debts become due, or (iv) which results in the Defaulting Party’s insolvency or its admission that it is unable to pay its debts generally as they become due;
d)	Termination of the Ground Lease as a result of an uncured default by Grantee shall be an Event of Default hereunder; and
e)	A sale or other transaction in the nature thereof of the Premises by Grantee after Grantee’s purchase of the Premises from MDFA and as a result thereof Grantee is no longer operating the Project on the Premises.

Page 3

Project Grant Agreement: Evergreen Solar, Inc.

f) In addition to any other remedy available to it under this Agreement or under applicable law, upon any occurrence of an Event of Default, the Non-Defaulting Party shall be entitled to suspend performance of its obligations under this Agreement until the earlier of such time as (a) such Event of Default has been cured, or (b) the Non-Defaulting Party has elected to terminate this Agreement pursuant to Section 1(c). The Non-Defaulting Party may, in addition to such suspension and/or termination, initiate proceedings for an assessment of damages payable to the Non-Defaulting Party resulting from such Event of Default and/or seek any other remedies available to the Non-Defaulting Party either at law or in equity; provided that MDFA’s remedies (in addition to such suspension and/or termination) upon an Event of Default by Grantee shall be limited to the right to enforce the repayment and forfeiture provisions as specified in Section 9 below. Neither the preceding sentence nor any other provision of this Agreement shall restrict or otherwise limit MDFA’s rights under any other agreements entered into with Grantee, including without limitation, the Ground Lease.

7.	Assignment
	Grantee’s rights and restrictions on the assignment or any form of transfer of any of Grantee’s interest in the Grant or this Agreement (including without limitation by merger, sale of assets or corporate reorganization) shall be governed by the same terms and conditions permitting and/or restricting assignments of Grantee’s leasehold interest as set forth in Article 10 of the Ground Lease.
8.	Grantee’s Commitments
	Grantee acknowledges that the Grant is conditioned on Grantee’s meeting and maintaining the following commitments (collectively the “Grantee’s Commitments”), and Grantee therefore agrees and covenants that it shall:

a)	Maintain a general manufacturing, research and development business for renewable energy technologies at the Premises for a period of five (5) years, commencing on Substantial Completion of the Project as defined in the Ground Lease subject to the provisions of Article 2, Section 2.2(d) of the Ground Lease.
b)	(i) create and maintain (a) 350 new Jobs (as hereinafter defined) as a result of the Project, of which a minimum of 320 shall be located at the Premises and the balance of the new Jobs shall be in Massachusetts, within two (2) years of the Effective Date and for a period of six (6) years thereafter and (ii) retain 310 existing jobs in Massachusetts (the “Retained Positions”) for a seven (7) year period from the Effective Date. For purposes of this Agreement, the term “job” (wherever it may appear in this Agreement, either on its own, in a defined term, or in upper or lower case) means a Massachusetts-based full-time equivalent employee on Grantee’s payroll. Notwithstanding the foregoing or the provisions of Section 9, it is agreed and understood that new Jobs created prior to the end of the second year following the Effective Date, in satisfaction of the foregoing requirements, may be created anywhere in Massachusetts.
	Notwithstanding anything to the contrary herein, in the event that the Grantee does not comply with the provisions of this Section 8(b), the Grantee shall not be deemed to be in default of Grantee’s commitments hereunder but rather shall be obligated to repay to the Grantor those sums that were not earned pursuant to the provisions of Section 9 below.
c)	To the extent feasible, give consideration to utilizing Massachusetts-based contractors in the construction of the Project, but Grantee shall not be required to employ a certain quota or percentage of Massachusetts-based contractors.

Page 4

Project Grant Agreement: Evergreen Solar, Inc.

d)

To the extent feasible, give consideration to using equipment manufactured or assembled by Massachusetts companies, but Grantee shall not be obligated to purchase any quota or percentage of equipment from Massachusetts companies.

e)

Not be or become a Prohibited Person. For the purposes of this Agreement a “Prohibited Person” is any person or entity which is, or in which a direct or indirect owner of 10% or more of the beneficial interest is, (X) in breach or violation of a written contract with the Commonwealth or MDFA as to which more than $5,000,000 is at issue and the entity is not contesting the breach or violation or the Commonwealth or MDFA has obtained at least an initial finding or determination in its favor which has not been overruled as to the principal matter at issue from a court, arbitrator or other tribunal with jurisdiction, (Y) delinquent to the extent of $1,000,000 or more in the payment of any state or local taxes assessed by or in the Commonwealth or (Z) a person or entity as to which it is illegal for MDFA to do business with under state or federal law. Notwithstanding the foregoing, however, the acquisition of 10% or more of the stock of Grantee on a recognized stock exchange or in the open market without the intervention, support or consent of Grantee shall not cause Grantee to be or become a Prohibited Person.

9. Repayment Provisions

a)

Grantee acknowledges and agrees that it shall repay the full amount or relevant portion of the Grant (without interest), excluding any theretofore Earned Amounts (as that term is defined in Section 9(b)(ii) below), if Grantee is the Defaulting Party with respect to an Event of Default or if Grantee fails to comply with the Grantee’s Commitments set forth in Section 8, such repayment to be due and payable to MDFA within thirty (30) days of Grantee’s receipt of written notice from MDFA demanding such repayment due to Grantee’s failure to comply with Grantee’s Commitments.

b)

(i) Grantee shall have eight (8) years following the Effective Date to create 2,300 new “Job Years” in Massachusetts, a portion of which shall be created at the Premises as required by Section 8(b). A “Job Year” shall be defined as each Job (as defined in Section 8(b)) that was created in Massachusetts, subject to the requirements of Section 8(b), during the year multiplied by the number of weeks the job existed divided by 50. Grantee shall submit to MDFA, within thirty (30) days of each annual anniversary of the Effective Date, a Job Years Assessment Report containing information demonstrating the number of Job Years created in Massachusetts, subject to the requirements of Section 8(b), as of each annual anniversary of the Effective Date.

(ii) For each new Job Year created (each an “Actual Job Year” and collectively the “Actual Job Years”), Grantee shall be deemed to have earned a portion of the Grant in an amount equal to Four Thousand Three Hundred Forty Eight Dollars ($4,348.00) (the “Earned Amount”), and in an aggregate Actual Job Years amount not to exceed Ten Million Dollars ($10,000,000). All Earned Amounts shall not be subject to forfeiture.

(iii) In the event that the number of Actual Job Years created on any annual anniversary of the Effective Date is less than the number of Targeted Job Years Created, as that term is set forth and applied in Attachment A for such annual anniversary date, Grantee shall forfeit to MDFA a portion of the Grant in an amount equal to Four Thousand Three Hundred Forty Eight Dollars ($4,348.00) multiplied by the difference between (A) the number of Targeted Job Years Created as specified in Attachment A for such annual anniversary date and (B) the number of Actual Job Years created by such annual anniversary date (the “Forfeiture Amount”). Grantee shall pay MDFA any Forfeiture Amount within thirty days of Grantee’s receipt of written notification from MDFA, provided that any Forfeiture Amount due hereunder on account of the number of Actual Job Years created within the first two (2) years of the Effective Date shall be deferred and paid upon the first day of the third (3^rd) year after the Effective Date and in

Page 5

Project Grant Agreement: Evergreen Solar, Inc.

	no case shall the total Forfeiture Amount exceed $10 million less any previously Earned Amounts. In addition, Grantee shall not be obligated to pay any Forfeiture Amount or otherwise repay any of the Grant funds after such time as the Grantee has achieved the creation of 2,300 Job Years.
	(iv) Notwithstanding the foregoing, in the event that a Forfeiture Amount is determined to be payable hereunder, and in any subsequent annual period the number of Actual Job Years created by any annual anniversary of the Effective Date exceeds the number of Targeted Job Years Created by such annual anniversary date, MDFA shall re-pay Grantee a portion of the Forfeiture Amount in an amount equal to Four Thousand Three Hundred Forty Eight Dollars ($4,348.00) multiplied by the number of Actual Job Years created by such annual anniversary date in excess of the Targeted Job Years Created by such annual anniversary date (the “Re-Payment Amount”). Furthermore, in the event that the Grantee achieves the creation on a cumulative basis of 2300 Job Years on or before the last day of the 8th year following the Effective Date, MDFA shall pay back to Grantee any and all amounts previously paid by Grantee to MDFA as Forfeiture Amounts (the “True-Up Amount”). Any Re-Payment Amount and/or True-Up Amount shall not exceed the aggregate of all Forfeiture Amounts previously paid by Grantee to MDFA. MDFA shall re-pay Grantee any Re-Payment Amount and/or True-Up Amount within thirty days of MDFA’s receipt of written notification from Grantee.
c)	All of the provisions of the foregoing Section 9(b) notwithstanding, Grantee shall not be required to pay any Forfeiture Amount or otherwise repay any of the Grant funds to MDFA due to any failure to fulfill Grantee Commitments that directly result from an event of Force Majeure as defined in Section 16.
d)	Grantee shall have the right at any time to apply to MDFA for full or partial waiver or modification or extension of time to meet Grantee’s Commitments. Any decision to waive, modify or extend such time frames shall be in the exercise of MDFA’s sole discretion.
e)	In the event Grantee becomes a Prohibited Person as defined in Section 8(e), MDFA may declare an Event of Default hereunder and cease making any further Grant advances and Grantee shall be deemed to be in default pursuant to the Ground Lease and MDFA may exercise any other remedies available to it under the Ground Lease.

10.	Nondiscrimination
	Grantee agrees to comply with all applicable Federal and State statutes, rules and regulations promoting fair employment practices or prohibiting employment discrimination and unfair labor practices and shall not discriminate in the hiring of any applicant for employment nor shall any qualified employee be demoted, discharged or otherwise subject to discrimination in the tenure, position, promotional opportunities, wages benefits or terms and conditions of their employment because of race, color, national origin, ancestry, age, sex, religion, disability, handicap, sexual orientation, or for exercising any rights afforded by law.
11.	Undocumented Workers and Indemnification

a) Grantee hereby certifies that Grantee does not and shall not knowingly use undocumented workers in connection with the Project, and Grantee agree that, pursuant to federal requirements, Grantee shall verify the immigration status of all workers employed by Grantee at the Premises without engaging in unlawful discrimination. Grantee shall not knowingly alter or falsify, or accept altered or falsified, documents from any such worker. Any breach of the foregoing terms and provisions may be regarded by MDFA as a material breach of this Agreement, subjecting Grantee to sanctions, including

Page 6

Project Grant Agreement: Evergreen Solar, Inc.

	but not limited to monetary penalties, withholding of Grant funds, suspension of the Agreement or termination of this Agreement.
b)	To the fullest extent permitted by law, subject to the limitations set forth in Section 11(c), Grantee shall indemnify and hold harmless the Commonwealth, MDFA, and each of their respective agents, officers, directors and employees (together with the Commonwealth and MDFA, the “Covered Persons”) from and against any and all liability, loss, claims, damages, fines, penalties, costs and expenses (including reasonable attorney’s fees), judgments and awards (collectively, “Damages”) sustained, incurred or suffered by or imposed upon any Covered Person resulting from any breach of this Agreement by Grantee. Without limiting the foregoing, Grantee shall indemnify and hold harmless each Covered Person against any and all Damages that may arise out of or are imposed because of the failure to comply with the provisions of applicable law by Grantee or any of its agents, officers, directors, employees or subcontractors. Such obligations shall survive any termination of this Agreement for three (3) years.
c)	The indemnification obligation set forth in Section 11(b) shall not apply to the extent that Damages result from the negligence or reckless or willful misconduct of any Covered Person.
d)	In no event shall either party be liable for any indirect, incidental, special or consequential damages whatsoever (including but not limited to lost profits or interruption of business) under this Agreement. Notwithstanding the foregoing, the parties acknowledge and agree that MDFA as a public entity has an overriding policy of not providing financial or other assistance of any kind from its limited public resources to Prohibited Persons for any period of time. The parties agree and stipulate that any forfeiture of Grantee’s right to receive additional disbursements of Grant funds to the extent provided for herein if Grantee should voluntarily be or become a Prohibited Person is reasonable in light of the irreparable harm MDFA would suffer.

12.	Public Records
	As a public entity, MDFA is subject to the Massachusetts Public Records Law (set forth at Massachusetts General Laws Chapter 66) and thus documents and other materials made or received by MDFA and/or its employees are subject to public disclosure. All information received by MDFA from Grantee shall be deemed to be subject to public disclosure, except as provided by applicable law.
13.	Document Review Rights
	Upon reasonable notice to Grantee and during normal business hours at the offices of Grantee, MDFA will have the right to review Grantee’s or its other agents’ records to the extent Grantee has access to such agents’ records and as is reasonably necessary to confirm that Grantee is in compliance with this Agreement, at any time from the Effective Date through the end of the Retention Period, as defined below herein, provided that nothing herein shall be deemed to permit MDFA to review any records that contain information of a proprietary nature to Grantee. If such review reveals that any portion of the Grant was utilized for purposes not permitted under this Agreement, then Grantee shall refund to MDFA the amount determined by such review within thirty (30) days of Grantee’s receipt of such demand. Grantee shall maintain books, records, and other compilations of data pertaining to the Grant payments made under this Agreement to the extent and in such detail as shall reasonably substantiate use of such payments. All such records shall be kept for a period commencing on the Effective Date and terminating seven (7) years after payment of the final advance of Grant proceeds under this Agreement (the “Retention Period”). If any litigation, claim, negotiation, audit or other action involving the records is commenced prior to the expiration of the Retention Period, all records shall be retained until completion of the audit or other action and resolution of all issues resulting therefrom, or until the

Page 7

Project Grant Agreement: Evergreen Solar, Inc.

	end of the Retention Period, whichever is later. MDFA or the Commonwealth or any of their duly authorized representatives shall have the right at reasonable times and upon reasonable notice, to examine and copy at reasonable expense, the books, records, and other compilations of data of Grantee which pertain to the Project and/or the provisions and requirements of this Agreement from the Effective Date through the end of the Retention Period. Such access may include on-site audits, review and copying of records.
14.	Lobbying
	No Grant funds may be used to pay for or otherwise support any activities intended to influence any matter pending before the Massachusetts General Court or for activities covered by the law and regulations governing “legislative agents” or “executive agents” set forth in the Massachusetts Lobbying Law, M.G.L. c.3, §39.
15.	Choice of Law
	This Agreement shall be construed under, and governed by, the laws of the Commonwealth of Massachusetts, without giving effect to its conflict of laws principles. Grantee agrees to bring any Federal or State legal proceedings arising under this Grant in which the Commonwealth or MDFA is a party in a court of competent jurisdiction within the Commonwealth of Massachusetts. This Section shall not be construed to limit any other legal rights of the parties.
16.	Force Majeure
	Neither party shall be liable to the other, or be deemed to be in breach of this Agreement for any failure or delay in rendering performance arising out of causes beyond its reasonable control and without its fault or negligence (“Force Majeure”). Such causes may include, but are not limited to, acts of God or of a public enemy (including terrorist attacks), fires, floods, epidemics, quarantine restrictions, freight embargoes, or unusually severe weather. Except as otherwise provided in this Agreement, dates or times of performance, including limits set on making advances of Grant funds, shall be extended to the extent of delays excused by Force Majeure, provided that the party whose performance is affected notifies the other promptly in writing of the existence and nature of such delay. Nothing in this Section 16 shall be deemed to apply to MDFA’s obligation to advance Grant funds as and when due pursuant to the terms of Section 5 of this Agreement.
17.	Waivers
	Conditions, covenants, duties and obligations contained in this Agreement may be waived only by written agreement between the parties. Forbearance or indulgence in any form or manner by a party shall not be construed as a waiver, nor in any way limit the remedies available to that party.
18.	Notice
	Any notice under this Agreement shall be in writing and shall be sent either (i) by facsimile, (ii) by courier, or (iii) by first class mail, postage, prepaid, to the address as set forth below (or to such other address as a party may provide by notice to the party pursuant to this Section), and shall be effective (i) if dispatched by facsimile and delivery is electronically confirmed by said media, the day such electronic confirmation is received, (ii) if sent by courier, one business day after dispatch, (iii) if sent by first class mail, five business days after its date of posting. The address for such notice for each party is as follows:

If to MDFA:	Massachusetts Development Finance Agency
	160 Federal Street
	Boston, MA 02110
	617/330-2000 (phone)

Page 8

Project Grant Agreement: Evergreen Solar, Inc.

	617/330-2054 (fax)
	Attn: Richard W. Holtz, General Counsel
If to Grantee:	Evergreen Solar, Inc.
	138 Bartlett Street
	Marlborough, MA 01752
	508/357-2221 (phone)
	508/229.0747 (fax)
	Attn: Richard Chleboski, Vice President

19.	Amendments, Entire Agreement and Exhibit
	All conditions, covenants, duties and obligations contained in the Agreement may be amended only through a written amendment signed by the Parties. The Parties understand and agree that this Agreement supersedes all other verbal and written agreements and negotiations by the Parties regarding the matters contained herein. The following are attached and incorporated into this Agreement:

EXHIBIT A — GROUND LEASE

Massachusetts Development Finance Agency		Evergreen Solar, Inc.
By:	/s/ Robert L. Culver	By:	/s/ Richard Chleboski
Name: Robert L. Culver		Name: Richard Chleboski
Title: President and Chief Executive Officer		Title: Vice President
Date: November 20, 2007		Date: November 20, 2007
APPROVED AS TO FORM:
MASSACHUSETTS DEVELOPMENT FINANCE AGENCY
By:	/s/ Richard W. Holtz Richard W. Holtz, General Counsel

Page 9

EXHIBIT A

Ground Lease

Attachment A

Jobs Target Schedule

						Targeted
	Total MA					Job Years
Year	Employment		Retained Jobs			Created
1		360		310			50
2		460		310			200
3		660		310			550
4		660		310			900
5		660		310			1250
6		660		310			1600
7		660		310			1950
8		660		310			2300
Total Job Years				2300
Grant Amount			$	10,000,000
Amount per Job Year			$	4,348	| Amount / Job Years
Retained Jobs				310

EXAMPLES

Year	1	2	3	4	5	6	7	8	Total
Example 1
Actual jobs	660	660	660	660	660	660	660	660
Actual New Job Years Created	350	350	350	350	350	350	350	350
Actual Cumulative Job Years	350	700	1050	1400	1750	2100	2450	2800
Target Cumulative Job Years	50	200	550	900	1250	1600	1950	2300
Variance to Target	300	500	500	500	500	500	500	500
Earned Amount See sec 9(b)(ii)	1,521,800	1,521,800	1,521,800	1,521,800	1,521,800	1,521,800	869,200			10,000,000
Forfeit (less than minimum cumulative job years) See Sec 9(b)(iii)	—	—	—	—	—	—	—	—		—
Reearnings of Forfeited amounts	—	—	—	—	—	—	—	—		—
Cumulative Earned Amount See sec 9(b)(ii)	1,521,800	3,043,600	4,565,400	6,087,200	7,609,000	9,130,800	10,000,000	10,000,000

Year	1		2		3			4			5		6		7		8		Total
Example 2
Actual jobs		310		400		510			600			660		670		700		700
Actual New Job Years Created		0		90		200			290			350		360		390		390
Actual Cumulative Job Years		0		90		290			580			930		1290		1680		2070
Target Cumulative Job Years		50		200		550			900			1250		1600		1950		2300
Variance to Target		-50		-110		-260			-320			-320		-310		-270		-230
Earned Amount See sec 9(b)(ii)		—		391,320		869,600			1,260,920			1,521,800		1,565,280		1,695,720		1,695,720		9,000,360
Forfeit (less than minimum cumulative job years) See Sec 9(b)(iii)						(1,130,480	)		(260,880	)										(1,391,360	)
Reearnings of Forfeited amounts				—		—			—			—		43,480		173,920		173,920		391,320
Cumulative Earned Amount See sec 9(b)(ii)		—		391,320		1,260,920			2,521,840			4,043,640		5,608,920		7,304,640		9,000,360

EX-10.38

Exhibit 10.38

FINAL

MASSACHUSETTS TECHNOLOGY PARK CORPORATION
PROJECT GRANT AGREEMENT

This Project Grant Agreement (the “Agreement”) dated as of November 20, 2007, is entered into between the Massachusetts Technology Park Corporation doing business as the Massachusetts Technology Collaborative (“MTC”), an independent public instrumentality of the Commonwealth of Massachusetts and the administrator of the Massachusetts Renewable Energy Trust Fund (the “Trust”), having its principal office and place of business at 75 North Drive, Westborough, Massachuetts 01581, and Evergreen Solar, Inc., a Delaware corporation, with a principal place of business at 138 Bartlett Street, Marlborough, Massachusetts 01752 (“Grantee”) (MTC and Grantee collectively as the “Parties”).

Whereas, MTC as administrator of the Trust is offering financial assistance to Grantee in the form of a grant to help defray the costs incurred by Grantee in the design and construction of an approximately Two Hundred and Fifty Thousand (250,000) square foot solar panel manufacturing facility (the “Project”) on publicly owned land in Devens, Massachusetts (the “Premises”);

Whereas, MTC’s provision of such grant funds for use on the Project is consistent with the statutory goals set forth in M.G.L. c.40J, and the Trust’s Direction Statement and Operating Plan, and is expected to lead to substantial economic development activity in the Commonwealth, including without limitation the retention and creation of employment, as more fully set forth in the Agreement and Attachment B; and

Whereas, MTC’s Board of Directors approved the commitment of funds to Grantee for the Project on June 28, 2007.

Now therefore, pursuant to the terms and conditions of the Agreement, MTC and Grantee agree as follows:

1. Term and Termination a) The term of this Agreement shall commence on the date that this Agreement is fully executed by the Parties (the “Effective Date”), and, unless terminated earlier pursuant to the terms of Section 1(b) and Section 6 (Events of Default), shall expire upon fulfillment of all Grantee Commitments set forth in Section 8 (Grantee’s Commitments). MTC’s obligation to disburse Grant proceeds, however, shall expire in any event on the earlier to occur of (i) the six (6) month anniversary of the date that Grantee has substantially completed the Project (which shall be the date upon which substantial completion occurs under the construction contract for the Project, and which is hereinafter referred to as “Substantial Completion”), or (ii) the last day of the thirty sixth (36th) month after the Effective Date. b) This Agreement may be terminated by either MTC or Grantee if (i) an Event of Default occurs (including the expiration of any applicable cure period) and remains outstanding as of the date of termination, (ii) the party seeking to terminate this Agreement hereunder is the Non-Defaulting Party, and (iii) the Non-Defaulting Party has not waived such Event of Default in writing.

2. The Grant Subject to the provisions of this Agreement, including without limitation the provisions of Section 5 (Payments), Section 8 (Grantee Commitments) and Section 9 (Repayment), MTC shall pay to the Grantee a maximum amount of Ten Million Dollars ($10,000,000) (the “Grant”).

3. Use of Proceeds Grantee hereby covenants and agrees that all Grant funds provided by MTC pursuant to this Agreement shall be used solely to defray the direct costs incurred by Grantee in connection with the due diligence, permitting, design and construction of the Project (hereinafter “Project Costs”), and for no other purpose.

Project Grant Agreement: Evergreen Solar, Inc.

4. Reporting Upon Grantee’s submission of invoices pursuant to Section 5, Grantee shall simultaneously provide MTC with a project status report (the “Progress Reports”), which shall include without limitation (a) a description of completed Project construction milestones, (b) the stage of the progress on construction of the Project, and (c) the status of Grantee’s meeting and maintaining the (i) Retained Positions and (ii) New Positions commitments, as defined and more fully set forth in Section 8; provided that nothing herein shall be deemed to require Grantee to disclose information that is of a proprietary nature. Grantee’s compliance with Grantee Commitments (as defined in Section 8) may be subject to continuous assessment by MTC. In furtherance of the foregoing, Grantee shall provide MTC with annual reports (the “Annual Reports), which shall include information setting forth Grantee’s compliance with, and/or variances from the Grantee Commitments. The first Annual Report shall be submitted to MTC within thirty (30) days of the first anniversary of the Effective Date and each subsequent Annual Report shall be submitted within thirty (30) days of each subsequent anniversary of the Effective Date. In the case of the Grantee Commitments set forth in Sections 8(a)-(c), the Annual Report shall include a certification from Grantee’s CEO or CFO concerning Grantee’s compliance with, and/or variances from the Grantee Commitments.

5. Invoices/Payment Schedule a) Cost Reimbursement. Grantee shall receive advances of Grant funds on a cost-reimbursement basis for Project Costs actually incurred on a “Pro-Rata” basis with all other funding types and sources being made available by the Grantee or to Grantee from MTC and other entities for the design and general construction of the Project, (collectively the “Total Project Construction Funds”). The Parties acknowledge that the total amount of MTC’s funding for the Project general construction is Ten Million Dollars ($10,000,000), comprised of the Grant (the “Total MTC Funds”). For purposes of cost reimbursement from MTC to Grantee under this Agreement, payment on a “Pro-Rata” basis means that MTC will reimburse on invoices to the extent of the ratio the Total MTC Funds bear to the Total Project Construction Funds, with MTC paying that Pro-Rata percentage of Grantee’s Project Costs for the period covering the invoice. The parties acknowledge that the estimated Project Costs and anticipated sources of the Total Project Construction Funds are to be determined and certified by the Grantee after the Effective Date and prior to the submission of the first invoice for cost-reimbursement. For the avoidance of doubt, examples of MTC’s Pro-Rata payments of Grant funds upon receipt of an invoice are set forth on the attached Attachment C. Any Grant funds that have not been disbursed to Grantee pursuant to the foregoing “Pro-Rata” funding process shall be paid to Grantee upon Substantial Completion. b) Invoices. Grantee may submit invoices for payment using the template provided by MTC. The invoice shall set forth total Project Costs incurred as of the date of the invoice, broken down into MTC’s Pro Rata share. Invoices shall provide reasonable supporting documentation to provide evidence of Project Costs actually incurred. c) Payment Terms. MTC shall pay the Grantee within thirty (30) days after receipt of a properly documented invoice, unless MTC should determine that any such payment or any part thereof is otherwise not properly payable pursuant to the terms of this Agreement (in which case MTC shall make payment with respect to any portion of such invoice that is properly payable).

6. Events of Default For the purposes of this Agreement, a “Defaulting Party” shall mean any party hereto against which the other party hereto is entitled to assert an Event of Default under this Section 6 and a “Non- Defaulting Party” shall mean with respect to the occurrence of any Event of Default (as defined below), the party to this Agreement that is not the Defaulting Party in connection with such Event of Default. For purposes of this Agreement “Event of Default” shall mean any of the following: a) Failure by the Defaulting Party to make, when due, any payment or repayment required under this Agreement if such failure is not remedied within thirty (30) calendar days after written notice of such failure is given by the other party and provided the payment or repayment is not the subject of a continuing good faith dispute; b) Material breach of any of the Defaulting Party’s obligations contained in this Agreement, including without limitation the obligations set forth in Section 8(a)-(e), which breaches are not excused by Force Majeure (as defined in Section 16) or cured within thirty (30) calendar days after written notice thereof is provided to the Non-Defaulting Party; c) Any circumstance: (i) in which the Defaulting Party makes a general assignment for the benefit of creditors as a symptom of impending bankruptcy,

Page 2

Project Grant Agreement: Evergreen Solar, Inc.

(ii) in which the Defaulting Party files a petition or otherwise commences, authorizes or consents to the commencement of a proceeding or cause of action under any bankruptcy or similar law for the protection of creditors, or where such a petition is filed against Defaulting Party and is not stayed, withdrawn or dismissed within sixty (60) days after such filing, (iii) in which a court of competent jurisdiction shall determine that Defaulting Party is generally not paying its debts as such debts become due, or (iv) which results in the Defaulting Party’s insolvency or its admission that it is unable to pay its debts generally as they become due; d) The Defaulting Party’s failure to perform any material covenant or obligation set forth in this Agreement, and such failure is not excused by Force Majeure or cured within thirty (30) calendar days after written notice thereof is provided to the Non-Defaulting Party; and e) Default by the Grantee under the terms of any loan to Grantee MTC has made or participated in (an “MTC Loan”) which default is not cured within any applicable grace period shall be an Event of Default hereunder with Grantee as the Defaulting Party. In addition to any other remedy available to it under this Agreement or under applicable law, upon any occurrence of an Event of Default, the Non-Defaulting Party shall be entitled to suspend performance of its obligations under this Agreement until the earlier of such time as (a) such Event of Default has been cured, or (b) the Non-Defaulting Party has elected to terminate this Agreement pursuant to Section 1(b). The Non-Defaulting Party may, in addition to such suspension and/or termination, initiate proceedings for an assessment of damages payable to the Non-Defaulting Party resulting from such Event of Default and/or seek any other remedies available to the Non-Defaulting Party either at law or in equity; provided that MTC’s remedies (in addition to such suspension and/or termination) upon an Event of Default by Grantee shall be limited to the right to enforce the repayment and forfeiture provisions as specified in Section 9 below. Neither the preceding sentence nor any other provision of this Agreement shall restrict or otherwise limit MTC’s rights under any agreements entered into with Grantee in conjunction with an MTC Loan, including without limitation any rights to demand or accelerate repayment of any funds provided to Grantee under an MTC Loan.

7. Assignment Grantee’s rights and restrictions on the assignment or any form of transfer of any of Grantee’s interest in the Grant or this Agreement (including without limitation by merger, sale of assets or corporate reorganization) shall be governed by the same terms and conditions permitting and/or restricting assignments of Grantee’s leasehold interest as set forth in Article 10 of that certain Ground Lease entered into by and between Grantee and the Massachusetts Development Finance Agency (“MassDevelopment”), dated November 2007.

8. Grantee’s Commitments Grantee acknowledges that the Grant is conditioned on Grantee’s meeting and maintaining the following commitments (collectively the “Grantee Commitments”), and Grantee therefore agrees and covenants that it shall: a) Maintain a general business presence in Massachusetts for a period of five (5) years, commencing on Substantial Completion. For purposes of this Agreement, Grantee shall be deemed to be maintaining a general business presence in Massachusetts so long as Grantee maintains its corporate headquarters, its primary United States based research and development operations, and its primary United States based manufacturing operations in Massachusetts. b) (i) create 350 net new jobs in Massachusetts within two (2) years of the Effective Date (the “New Positions”), (ii) maintain the New Positions in Massachusetts over the immediately subsequent five (5) year period, and (iii) retain at least 310 of its existing jobs in Massachusetts (the “Retained Positions”) for a seven (7) year period commencing on the Effective Date. For purposes of this Agreement, the term “job” (wherever it may appear in this Agreement, either on its own, in a defined term, in upper or lower case) means a Massachusetts-based full-time equivalent employee on Grantee’s payroll; c) Employ a preference to use Massachusetts-based contractors in the construction of the Project, but Grantee shall not be required to employ a certain quota or percentage of Massachusetts based contractors. On or within 30 days of the Effective Date of this Agreement, Grantee will present MTC with a preliminary list of possible construction contractors, which may be modified from time to time during the Project by the Grantee, and provided that nothing herein shall be deemed to require MTC’s approval of any contractors; d) Employ a preference for equipment manufactured or assembled by Massachusetts companies, but Grantee shall not be obligated to purchase any quota or percentage of equipment from Massachusetts companies. On or within 30 days of the

Page 3

Project Grant Agreement: Evergreen Solar, Inc.

Effective Date of this Agreement, Grantee will present MTC with a preliminary list of possible equipment manufacturers, which may be modified from time to time during the Project by the Grantee, and provided that nothing herein shall be deemed to require MTC’s approval of any equipment manufacturers; and e) Not be or become a “Prohibited Person.” For the purposes of this Agreement a “Prohibited Person” is any person or entity which is, or in which a direct or indirect owner of 10% or more of the beneficial interest is, (X) in breach or violation of a written contract with the Commonwealth or MTC as to which more than $5,000,000 is at issue and the entity is not contesting the breach or violation or the Commonwealth or MTC has obtained at least an initial finding or determination in its favor which has not been overruled as to the principal matter at issue from a court, arbitrator or other tribunal with jurisdiction, (Y) delinquent to the extent of $1,000,000 or more in the payment of any state or local taxes assessed by or in the Commonwealth or (Z) a person or entity as to which it is illegal for MTC to do business with under state or federal law. Notwithstanding the foregoing, however, the acquisition of 10% or more of the stock of the Grantee on a recognized stock exchange or in the open market without the intervention, support or consent of the Grantee shall not cause Grantee to be or become a Prohibited Person.

9. Repayment Provisions a) Grantee acknowledges and agrees that it shall repay the full amount of the Grant (without interest), excluding any theretofore “Earned Amounts” (as that term is defined in Section 9(b)(ii) below and used in the examples set forth on Exhibit B), if it fails to comply with the Grantee Commitments set forth in Section 8(a), such repayment to be due and payable to MTC within thirty (30) days of Grantee’s receipt of written notice from MTC demanding such repayment due to Grantee’s failure to comply. b) (i) Grantee shall have eight (8) years following the Effective Date to create 2,300 new “Job Years.” A “Job Year” shall be defined as each Job (as defined in Section 8(b)) that was created during the year in excess of the number of “Baseline Jobs” multiplied by the number of weeks the job existed divided by 50. The term “Baseline Jobs” shall mean Three Hundred and Ten (310) jobs. Grantee shall submit to MTC, within thirty (30) days of each annual anniversary of the Effective Date, a Job Years Assessment Report containing information demonstrating the number of Job Years created as of each annual anniversary of the Effective Date. (ii) For each new Job Year created (each an “Actual Job Year” and collectively the “Actual Job Years”), Grantee shall be deemed to have earned a portion of the Grant in an amount equal to Four Thousand Three Hundred Forty Eight Dollars ($4,348.00) (the “Earned Amount”), and in an aggregate Actual Job Years amount not to exceed Ten Million Dollars ($10,000,000). All Earned Amounts shall not be subject to forfeiture. (iii) In the event that the number of Actual Job Years created on any annual anniversary of the Effective Date is less than the number of Targeted Job Years Created, as that term is set forth and applied in Attachment B for such annual anniversary date, Grantee shall forfeit to MTC a portion of the Grant in an amount equal to Four Thousand Three Hundred Forty Eight Dollars ($4,348.00) multiplied by the difference between (A) the number of Targeted Job Years Created as specified in Attachment B for such annual anniversary date and (B) the number of Actual Job Years created by such annual anniversary date (the “Forfeiture Amount”). Grantee shall pay MTC any Forfeiture Amount within thirty days of Grantee’s receipt of written notification from MTC, provided that any Forfeiture Amount due hereunder on account of the number of Actual Job Years created within the first two (2) annual anniversaries of the Effective Date shall be deferred and paid upon the first day of the third (3rd) year after the Effective Date and in no case shall the total Forfeiture Amount exceed $10 million less any previously earned amounts. In addition, Grantee shall not be obligated to pay any Forfeiture Amount or otherwise repay any of the Grant funds after such time as the Grantee has achieved the creation of 2,300 Job Years, as set forth on Attachment B. (iv) Notwithstanding the foregoing, in the event that a Forfeiture Amount is determined to be payable hereunder, and in any subsequent annual period the number of Actual Job Years created by any annual anniversary of the Effective Date exceeds the number of Targeted Job Years Created by such annual anniversary date, MTC shall re-pay Grantee a portion of the Forfeiture Amount in an amount equal to Four Thousand Three Hundred Forty Eight Dollars ($4,348.00) multiplied by the number of Actual Job Years created by such annual anniversary date in excess of the Targeted Job Years Created by such annual anniversary date (the “Re-Payment Amount”). Furthermore, in the event Grantee achieves on a cumulative basis the creation of 2300 Job Years on or before

Page 4

Project Grant Agreement: Evergreen Solar, Inc.

the last day of the 8th year after the Effective Date, MTC shall pay back to Grantee any and all Forfeiture Amounts previously paid by Grantee to MTC (the “True-Up Amount”). Any Re-Payment Amount and/or True-Up Amount shall not exceed the aggregate of all Forfeiture Amounts previously paid by Grantee to MTC. MTC shall re-pay Grantee any Re-Payment Amount and/or True-Up Amount within thirty days of MTC’s receipt of written notification from Grantee. c) All of the provisions of the foregoing Section 9(b) notwithstanding, Grantee shall not be required to pay any Forfeiture Amount or otherwise repay any of the Grant funds to MTC due to any failure to fulfill Grantee Commitments that directly result from an event of Force Majeure as defined in Section 16, and Grantee shall have the right at any time to apply to MTC for full or partial waiver or modification or extension of time to meet Grantee Commitments. Any decision to waive, modify or extend such time frames shall be in the sole exercise of MTC’s discretion. d) In the event Grantee becomes a Prohibited Person as defined in Section 8(e), MTC may declare an Event of Default hereunder and cease making any further Grant advances and any MTC Loan shall be deemed to be in default and MTC may exercise any other remedies available to it under the MTC Loan agreement.

10. Nondiscrimination The Grantee agrees to comply with all applicable Federal and State statutes, rules and regulations promoting fair employment practices or prohibiting employment discrimination and unfair labor practices and shall not discriminate in the hiring of any applicant for employment nor shall any qualified employee be demoted, discharged or otherwise subject to discrimination in the tenure, position, promotional opportunities, wages benefits or terms and conditions of their employment because of race, color, national origin, ancestry, age, sex, religion, disability, handicap, sexual orientation, or for exercising any rights afforded by law.

11. Indemnification and Insurance a) To the fullest extent permitted by law, Grantee shall indemnify and hold harmless the Commonwealth, MTC, and each of their respective agents, officers, directors and employees (together with the Commonwealth and MTC, the “Covered Persons”) from and against any and all liability, loss, claims, damages, fines, penalties, costs and expenses (including reasonable attorney’s fees), judgments and awards (collectively, “Damages”) sustained, incurred or suffered by or imposed upon any Covered Person resulting from (i) any breach of this Agreement, or (ii) any negligent acts or omissions or reckless misconduct of Grantee in connection with construction of the Project or otherwise. Without limiting the foregoing, Grantee shall indemnify and hold harmless each Covered Person against any and all Damages that may arise out of or are imposed because of the failure to comply with the provisions of applicable law by Grantee or any of its agents, officers, directors, employees or subcontractors. The foregoing notwithstanding, Grantee shall not be liable for (i) any Damages sustained, incurred or suffered by or imposed upon any Covered Person resulting from any negligent acts or omissions or reckless misconduct of the Commonwealth or MTC or any other Covered Person, and (ii) except for liability for death or personal injury caused by the negligence or willful misconduct of the Grantee or its agents, including without limitation its contractor for construction of the Project, or for claims of infringement of a third party’s intellectual property by Grantee, the aggregate liability of Grantee under this Agreement shall not exceed the greater of the amount of the Grant or the amount recovered under any applicable insurance coverage. b) In no event shall either party be liable for any indirect, incidental, special or consequential damages whatsoever (including but not limited to lost profits or interruption of business), whether arising out of or related to Grantee’s construction of the Project under this Agreement or otherwise. Notwithstanding the foregoing, the parties acknowledge and agree that MTC as a public entity has an overriding policy of not providing financial or other assistance of any kind from its limited public resources to Prohibited Persons for any period of time. The parties agree and stipulate that any forfeiture of Grantee’s right to receive additional disbursements of Grant funds to the extent provided for herein if Grantee should voluntarily be or become a Prohibited Person is reasonable in light of the irreparable harm MTC would suffer. c) Grantee hereby agrees to maintain a program of insurance and/or self-insurance which is prudent and adequate to address any claim or liability which may arise out of Grantee’s construction of the Project and performance of its obligations pursuant to this Agreement.

Page 5

Project Grant Agreement: Evergreen Solar, Inc.

12. Public Records As a public entity, MTC is subject to the Massachusetts Public Records Law (set forth at Massachusetts General Laws Chapter 66) and thus documents and other materials made or received by MTC and/or its employees are subject to public disclosure. All information received by MTC shall be deemed to be subject to public disclosure, except as otherwise provided in the procedures set forth in Attachment A hereto. By signing this Agreement, Grantee acknowledges, understands and agrees that the procedures set forth in Attachment A are applicable to any documents submitted by Grantee to MTC, including but not limited to any acknowledgements set forth therein, and that Grantee shall be bound by these procedures.

13. Document Review Rights MTC will have the right to review Grantee’s or its other agents’ records to the extent necessary to confirm that Grantee is in compliance with the Use of Proceeds provision, at any time from the Effective Date through the end of the Retention Period, as defined below herein, provided that nothing herein shall be deemed to permit MTC to review any records that contain information of a proprietary nature to Grantee. If such review reveals that any portion of the Grant was utilized for purposes not permitted under this Agreement, then Grantee shall refund to MTC the amount determined by such review within thirty (30) days of Grantee’s receipt of such demand. Grantee shall maintain books, records, and other compilations of data pertaining to the Grant payments made under this Agreement to the extent and in such detail as shall properly substantiate use of such payments. All such records shall be kept for a period commencing on the Effective Date and terminating seven (7) years after payment of the final advance of Grant proceeds under this Agreement (the “Retention Period”). If any litigation, claim, negotiation, audit or other action involving the records is commenced prior to the expiration of the Retention Period, all records shall be retained until completion of the audit or other action and resolution of all issues resulting therefrom, or until the end of the Retention Period, whichever is later. MTC or the Commonwealth or any of their duly authorized representatives shall have the right at reasonable times and upon reasonable notice, to examine and copy at reasonable expense, the books, records, and other compilations of data of the Grantee which pertain to the Project and/or the provisions and requirements of this Agreement from the Effective Date through the end of the Retention Period. Such access may include on-site audits, review and copying of records.

14. Lobbying No Grant funds may be used to pay for or otherwise support any activities intended to influence any matter pending before the Massachusetts General Court or for activities covered by the law and regulations governing “legislative agents” or “executive agents” set forth in the Massachusetts Lobbying Law, M.G.L. c.3, §39.

15. Choice of Law This Agreement shall be construed under, and governed by, the laws of the Commonwealth of Massachusetts, without giving effect to its conflict of laws principles. The Grantee agrees to bring any Federal or State legal proceedings arising under this Grant in which the Commonwealth or MTC is a party in a court of competent jurisdiction within the Commonwealth of Massachusetts. This Section shall not be construed to limit any other legal rights of the parties.

16. Force Majeure Neither party shall be liable to the other, or be deemed to be in breach of this Agreement for any failure or delay in rendering performance arising out of causes beyond its reasonable control and without its fault or negligence (“Force Majeure”). Such causes may include, but are not limited to, acts of God or of a public enemy (including terrorist attacks), fires, floods, epidemics, quarantine restrictions, freight embargoes, or unusually severe weather. Except as otherwise provided in this Agreement, dates or times of performance, including limits set on making advances of Grant funds, shall be extended to the extent of delays excused by Force Majeure, provided that the party whose performance is affected notifies the other promptly in writing of the existence and nature of such delay. Nothing in this Section 16 shall be deemed to apply to MTC’s obligation to advance Grant funds as and when due pursuant to the terms of Section 5 of this Agreement.

Page 6

Project Grant Agreement: Evergreen Solar, Inc.

17. Waivers Conditions, covenants, duties and obligations contained in this Agreement may be waived only by written agreement between the parties. Forbearance or indulgence in any form or manner by a party shall not be construed as a waiver, nor in any way limit the remedies available to that party.

18. Notice Any notice under this Agreement shall be in writing and shall be sent either (i) by facsimile, (ii) by courier, or (iii) by first class mail, postage, prepaid, to the address as set forth below (or to such other address as a party may provide by notice to the party pursuant to this Section), and shall be effective (i) if dispatched by facsimile and delivery is electronically confirmed by said media, the day such electronic confirmation is received, (ii) if sent by courier, one business day after dispatch, (iii) if sent by first class mail, five business days after its date of posting. The address for such notice for each party is as follows:

If to MTC: Massachusetts Technology Collaborative 75 North Drive Westborough, MA 01581 508/870-0312 (phone) 508/898-2275 (fax) Attn: Jeanne M. Napolitano, Grants & Contracts Administrator (napolitano@masstech.org)

If to Grantee: Evergreen Solar, Inc. 138 Bartlett Street Marlborough, MA 01752 508/357-2221 (phone) 508/.229.0747 (fax) Attn:

19. Amendments, Entire Agreement and Attachments All conditions, covenants, duties and obligations contained in the Agreement may be amended only through a written amendment signed by the parties. The parties understand and agree that this Agreement supersedes all other verbal and written agreements and negotiations by the parties regarding the matters contained herein. The following are attached and incorporated into this Agreement:

i. Attachment A – MTC’s Sensitive Information Policy and Procedures
ii. Attachment B – Jobs Target Schedule
iii. Attachment C – Pro-Rata Payment Calculation

The Massachusetts Technology Park Corporation
d/b/a Massachusetts Technology Collaborative	Evergreen Solar, Inc.
By:	By:
Name: Mitchell Adams	Name:
Title: Executive Director	Title:
Date:	Date:

Page 7

Project Grant Agreement: Evergreen Solar, Inc.

Attachment A

The Massachusetts Technology Collaborative Policy And Procedures
Regarding Submission Of “Sensitive Information”

The Massachusetts Technology Collaborative, the Massachusetts Renewable Energy Trust which it administers, and John Adams Innovation Institute (collectively referred to herein as “MTC”) are subject to the requirements concerning disclosure of public records under the Massachusetts Public Records Act, M.G.L. c. 66 (the “Public Records Act”), which governs the retention, disposition and archiving of public records. For purposes of the Public Records Act, “public records” include all books, papers, maps, photographs, recorded tapes, financial statements, statistical tabulations, or other documentary materials or data, regardless of physical form or characteristics, made or received by MTC. As a result, any information submitted to MTC by a grant applicant, recipient grantee, respondent to a request for response (including, but not limited to an RFQ, RFP and RFI), contractor, or any other party (collectively the “Submitting Party”) is subject to public disclosure as set forth in the Public Records Act.

The foregoing notwithstanding, “public records” do not include certain materials or data which fall within one of the specifically enumerated exemptions set forth in the Public Records Act or in other statutes, including MTC’s enabling act, M.G.L. Chapter 40J. One such exemption that may be applicable to documents submitted by a Submitting Party is for any documentary materials or data made or received by MTC that consists of trade secrets or commercial or financial information regarding the operation of any business conducted by the Submitting Party, or regarding the competitive position of such Submitting Party in a particular field of endeavor (the “Trade Secrets Exemption”).

It is MTC’s expectation and belief that the overwhelming percentage of documents it receives from a Submitting Party does not contain any information that would warrant an assertion by MTC of an exemption from the Public Records Act. Submitting Parties should therefore take care in determining which documents they submit to MTC, and should assume that all documents submitted to MTC are subject to public disclosure without any prior notice to the Submitting Party and without resort to any formal public records request.

In the event that a Submitting Party wishes to submit certain documents to MTC and believes such a document or documents may be proprietary in nature and may fall within the parameters of the Trade Secrets Exemption and/or some other applicable exemption, the following procedures shall apply:

1. At the time of the Submitting Party’s initial submission of documents to MTC, the Submitting Party must provide a cover letter, addressed to MTC’s General Counsel, indicating that it is submitting documents which it believes are exempt from public disclosure, including a description of the specific exemption(s) that the Submitting Party contends is/are applicable to the submitted materials, a precise description of the type and magnitude of harm that would result in the event of the documents’ disclosure, and a specific start date and end date within which the claimed exemption applies. If different exemptions, harms and/or dates apply to different documents, it is the Submitting Party’s responsibility and obligation to provide detailed explanations for each such document.

2. At the time of the Submitting Party’s initial submission of documents to MTC, the Submitting Party must also clearly and unambiguously identify each and every such document that it contends is subject to an exemption from public disclosure as “Sensitive Information.” It is the Submitting Party’s responsibility and obligation to ensure that all such documents are sufficiently identified as “Sensitive Information,” and Submitting Party’s designation must be placed in a

Page 8

Project Grant Agreement: Evergreen Solar, Inc.

prominent location on the face of each and every document that it contends is exempt from disclosure under the Public Records Act.

Information Submitted to MTC in any form other than a hard copy document will not be subject to the procedures set forth in this Policy. For example, information submitted by e-mail, facsimile and/or verbally will not be subject to these procedures and may be disclosed at any time without notice to the Submitting Party.

3. Documents that are not accompanied by the written notification to MTC’s General Counsel or are not properly identified by the Submitting Party as “Sensitive Information” at the time of their initial submission to MTC are presumptively subject to disclosure under the Public Records Act, and the procedures for providing the Submitting Party with notice of any formal public records request for documents, as set forth below, shall be inapplicable.

4. At the time MTC receives documents from the Submitting Party, any such documents designated by Submitting Party as “Sensitive Information” shall be segregated and stored in a secure filing area when not being utilized by appropriate MTC staff. By submitting a grant application, request for response, or any other act that involves the submission of information to MTC, the Submitting Party certifies, acknowledges and agrees that (a) MTC’s receipt, segregation and storage of documents designated by Submitting Party as “Sensitive Information” does not represent a finding by MTC that such documents fall within the Trade Secrets Exemption or any other exemption to the Public Records Act, or that the documents are otherwise exempt from disclosure under the Public Records Act, and (b) MTC is not liable under any circumstances for the subsequent disclosure of any information submitted to MTC by the Submitting Party, whether or not such documents are designated as “Sensitive Information” or MTC was negligent in disclosing such documents.

5. In the event that MTC receives an inquiry or request for information submitted by a Submitting Party, MTC shall produce all responsive information without notice to the Submitting Party. In the event that the inquiry or request entails documents that the Submitting Party has previously designated as “Sensitive Information” in strict accordance with this Policy, the inquiring party shall be notified in writing that one or more of the documents it has requested has been designated by the Submitting Party as “Sensitive Information”, and, if not already submitted, that a formal, written public records request must be submitted by the requesting party to MTC’s General Counsel for a determination of whether the subject documents are exempt from disclosure.

6. Upon the General Counsel’s receipt of a formal, written public records request for information that encompass documents previously designated by Submitting Party as “Sensitive Information”, the Submitting Party shall be notified in writing of MTC’s receipt of the public records request, and MTC may, but shall not be required to provide Submitting Party an opportunity to present MTC with information and/or legal arguments concerning the applicability of the Trade Secrets Exemption or some other exemption to the subject documents. 7. The General Counsel shall review the subject documents, the Public Records Act and the exemption(s) claimed by the Submitting Party in making a determination concerning their potential disclosure.

The General Counsel is the sole authority within MTC for making determinations on the applicability and/or assertion of an exemption to the Public Records Act. No employee of MTC other than the General Counsel has any authority to address issues concerning the status of “Sensitive Information” or to bind MTC in any manner concerning MTC’s treatment and disclosure of such documents. Furthermore, the potential applicability of an exemption to the disclosure of documents designated by the Submitting Party as “Sensitive Information” shall not require MTC to assert such an exemption. MTC’s General Counsel retains the sole discretion and authority to assert an exemption, and he may decline to exert such an exemption if, within his discretion, the public interest is served by the disclosure of any documents submitted by the Submitting Party.

Page 9

Project Grant Agreement: Evergreen Solar, Inc.

8. MTC shall provide the requesting party and Submitting Party with written notice of its determination that the subject documents are either exempt or not exempt from disclosure. 9. In the event that MTC determines that the subject documents are exempt from disclosure, the requesting party may seek review of MTC’s determination before the Supervisor of Public Records, and MTC shall notify the Submitting Party in writing in the event that the requesting party pursues a review of MTC’s determination.

10. In the event the requesting party pursues a review of MTC’s determination that the documents are exempt from disclosure and the Supervisor of Public Records concludes that the subject documents are not exempt from disclosure and orders MTC to disclose such documents to the requester, MTC shall notify the Submitting Party in writing prior to the disclosure of any such documents, and Submitting Party may pursue injunctive relief or any other course of action in its discretion.

11. In the event that MTC determines that the subject documents are not exempt from disclosure or the General Counsel determines that, under the circumstances and in his discretion, MTC shall not assert an exemption, MTC shall notify the Submitting Party in writing prior to the disclosure of any such documents, and Submitting Party may pursue injunctive relief or any other course of action in its discretion.

The Submitting Party’s submission of documentation to MTC shall require a signed certification that Submitting Party acknowledges, understands and agrees with the applicability of the foregoing procedures to any documents submitted to MTC by Submitting Party at any time, including but not limited to the acknowledgements set forth herein, and that Submitting Party shall be bound by these procedures.

All documents submitted by Submitting Party, whether designated as “Sensitive Information” or not, are not returnable to Submitting Party.

Page 10

Project Grant Agreement: Evergreen Solar, Inc.

Attachment B
Evergreen Grant Analysis
See Attached

Page 11

Evergreen — Grant Analysis

			Job-Years if
Year	Target		Target Achieved
1		360		50
2		510		200
3		610		300
4		660		350
5		660		350
6		660		350
7		660		350
8		660		350
Total Job Years				2300
Grant Amount			$	10,000,000
Amount per Job Year			$4,348		GrantAmount/JobYears
Baseline Jobs (to be retained)				310

EXAMPLES

Year	1		2		3		4		5		6		7		8		Total
Example 1
Actual Job Years Reported		660		660		800		800		750		750		750		750
Targeted Job Years Created Above Baseline		50		200		300		350		350		350		350		350		2300
Less Actual Job Years Created Above Baseline		350		350		490		490		440		440		440		440		3440
Variance from Target		300		150		190		140		90		90		90		90		1140
Job Years Earned (not to exceed 2,300)		350		350		490		490		440		180		0		0
Cumulative Job Years Earned		350		700		1190		1680		2120		2300		2300		2300
Job Years Forfeited		0		0		0		0		0		0		0		0
Cumulative Job Years Forfeited		0		0		0		0		0		0		0		0
Earnings
Actual Job Years Earned		350		350		490		490		440		180		—		—		2,300
Multiplied by Amount/Job Year	$	4,348	$	4,348	$	4,348	$	4,348	$	4,348	$	4,348	$	4,348	$	4,348	$	4,348
Total Earned Amount	$	1,521,739	$	1,521,739	$	2,130,435	$	2,130,435	$	1,913,043	$	782,609	$	0	$	0	$	10,000,000
Forfeitures*
Job Years Forfeited		—		—		—		—		—		—		—		—		—
Multiplied by Amount/Job Year	$	4,348	$	4,348	$	4,348	$	4,348	$	4,348	$	4,348	$	4,348	$	4,348	$	4,348
Total Forfeited Amount	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Cumulative Earned Amount	$	1,521,739	$	3,043,478	$	5,173,913	$	7,304,348	$	9,217,391	$	10,000,000	$	10,000,000	$	10,000,000
Cumulative Forfeited Amount	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

* NOTE: A positive forfeiture amount indicates a previously forfeited amount that MTC will return to Evergreen

Example 2
Actual Job Years Reported		310			400			510			600			660		670		700		700
Targeted Job Years Created Above Baseline		50			200			300			350			350		350		350		350		2300
Less Actual Job Years Created Above Baseline		0			90			200			290			350		360		390		390		2070
Variance from Target		-50			-110			-100			-60			0		10		40		40		-230
Job Years Earned (not to exceed 2,300)		0			90			200			290			350		360		390		390
Cumulative Job Years Earned		0			90			290			580			930		1290		1680		2070
Job Years Forfeited		-50			-110			-100			-60			0		10		40		40
Cumulative Job Years Forfeited		-50			-160			-260			-320			-320		-310		-270		-230
Earnings
Actual Job Years Earned		—			90			200			290			350		360		390		390		2,070
Multiplied by Amount/Job Year	$	4,348		$	4,348		$	4,348		$	4,348		$	4,348	$	4,348	$	4,348	$	4,348	$	4,348
Total Earned Amount	$	0		$	391,304		$	869,565		$	1,260,870		$	1,521,739	$	1,565,217	$	1,695,652	$	1,695,652	$	9,000,000
Forfeitures*
Job Years Forfeited		(50	)		(110	)		(100	)		(60	)		—		10		40		40		(230	)
Multiplied by Amount/Job Year	$	4,348		$	4,348		$	4,348		$	4,348		$	4,348	$	4,348	$	4,348	$	4,348	$	4,348
Total Forfeited Amount	-$	217,391		-$	478,261		-$	434,783		-$	260,870		$	0	$	43,478	$	173,913	$	173,913	-$	1,000,000
Cumulative Earned Amount	$	0		$	391,304		$	1,260,870		$	2,521,739		$	4,043,478	$	5,608,696	$	7,304,348	$	9,000,000
Cumulative Forfeited Amount	-$	217,391		-$	695,652		-$	1,130,435		-$	1,391,304		-$	1,391,304	-$	1,347,826	-$	1,173,913	-$	1,000,000

* NOTE: A positive forfeiture amount indicates a previously forfeited amount that MTC will return to Evergreen

Example 3
Actual Job Years Reported		310			660		660		661		659			660		660		660
Targeted Job Years Created Above Baseline		50			200		300		350		350			350		350		350		2300
Less Actual Job Years Created Above Baseline		0			350		350		351		349			350		350		350		2450
Variance from Target		-50			150		50		1		-1			0		0		0		150
Job Years Earned (not to exceed 2,300)		0			350		350		351		349			350		350		200
Cumulative Job Years Earned		0			350		700		1051		1400			1750		2100		2300
Job Years Forfeited		-50			50		0		0		-1			0		0		0
Cumulative Job Years Forfeited		-50			0		0		0		-1			-1		-1		-1
Earnings
Actual Job Years Earned		—			350		350		351		349			350		350		200		2,300
Multiplied by Amount/Job Year	$	4,348		$	4,348	$	4,348	$	4,348	$	4,348		$	4,348	$	4,348	$	4,348	$	4,348
Total Earned Amount	$	0		$	1,521,739	$	1,521,739	$	1,526,087	$	1,517,391		$	1,521,739	$	1,521,739	$	869,565	$	10,000,000
Forfeitures*
Job Years Forfeited		(50	)		50		—		—		(1	)		—		—		—		(1	)
Multiplied by Amount/Job Year	$	4,348		$	4,348	$	4,348	$	4,348	$	4,348		$	4,348	$	4,348	$	4,348	$	4,348
Total Forfeited Amount	-$	217,391		$	217,391	$	0	$	0	-$	4,348		$	0	$	0	$	0	-$	4,348
True — Up Payment (in the event that Grantee achieves the creation on a cumulative basis of 2300 Job Years on or before the last day of the 8th year following the Effective Date, MTC shall pay back to Grantee any and all amounts previously paid by Recipient to MTC as Forfeiture Amounts)																			$	4,348
Cumulative Earned Amount	$	0		$	1,521,739	$	3,043,478	$	4,569,565	$	6,086,957		$	7,608,696	$	9,130,435	$	10,000,000
Cumulative Forfeited Amount	-$	217,391		$	0	$	0	$	0	-$	4,348		-$	4,348	-$	4,348	-$	4,348

* NOTE: A positive forfeiture amount indicates a previously forfeited amount that MTC will return to Evergreen;

Project Grant Agreement: Evergreen Solar, Inc.

Attachment C

Example 1

Total Project Construction Funds = $50,000,000

MTC Grant	$	10,000,000	20	%
Company Equity		40,000,000	80	%
Invoice :	$	1,000,000
Grant Draw	$	200,000	(20	%)
Company Funds Draw		800,000	(80	%)

Example 2

Total Project Construction Funds = $60,000,000

MTC Grant	$	10,000,000
Bank Loan	$	25,000,000
Company Equity	$	25,000,000
Invoice:	$	1,000,000
Grant Draw:	$	166,667
Bank Draw & Company Equity*	$	833,333	*

Ratio to be negotiated between Co. and party lending for construction

Page 12

EX-10.39

Exhibit 10.39

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been omitted pursuant to a request for confidential treatment and, where applicable, have been marked with an asterisk (“[****]”) to denote where omissions have been made. The confidential material has been filed separately with the Securities and Exchange Commission.

07-December, 2007     

................................2007

SILICIUM DE PROVENCE S.A.S

and

EVERGREEN SOLAR, INC.

AGREEMENT FOR THE SALE AND PURCHASE
OF SOLAR GRADE SILICON

07-December 2007     

HERBERT SMITH LLP

Page 2 of 17

07-December 2007     

TABLE OF CONTENTS

Article	Headings	Page
1.	DEFINITIONS AND INTERPRETATION		4
2.	DURATION		5
3.	SALE AND PURCHASE OF SILICON		6
4.	TITLE AND RISK		8
5.	SET-OFF		9
6.	LIABILITY		9
7.	ASSIGNMENT		9
8.	TERMINATION		10
9.	PERMITS, TAXATION AND EXPORT CONTROL		11
10.	FORCE MAJEURE		11
11.	CONFIDENTIALITY		12
12.	NOTICES		13
13.	APPLICABLE LAW AND LANGUAGE		14
14.	MISCELLANEOUS		14
15.	DISPUTES		14
SCHEDULE 1 SILICON SPECIFICATIONS			17
SCHEDULE 2 DELIVERY UNITS AND PACKING OF SILICON			18

Page 3 of 17

07-December 2007     

AGREEMENT FOR THE SALE AND PURCHASE
OF SOLAR GRADE SILICON

THIS AGREEMENT is made on 7th December, 2007

BETWEEN:

(1)	SILICIUM DE PROVENCE S.A.S., a private company with limited liability, incorporated under the laws of France, whose registered office is situated at Usine de St. Auban, 04 600 Saint Auban, France, represented by Mr. Frank Wouters (“Silpro”); and
(2)	EVERGREEN SOLAR, INC., a company incorporated in Delaware, U.S.A. with registered number 2426798, whose registered office is situated at 138 Bartlett Street, Marlboro, MA01752, USA, represented by Richard Chleboski (“Evergreen”).

Hereinafter referred to severally each as a “Party” and jointly as the “Parties”.

WHEREAS:

(A)	Silpro intends to develop a plant in France for the production of high-quality solar grade polycrystalline silicon in a first phase with a nominal capacity of [****] metric tons/year (the “First Phase”) and a second phase with a nominal capacity of [****] metric tons/year (the “Second Phase”).
(B)	Evergreen is a leading processor of solar grade silicon of the type to be produced by Silpro and a manufacturer of high-quality photovoltaic products.
(C)	The Parties wish to enter into an agreement whereby Silpro shall sell part of its production of solar grade silicon to Evergreen

NOW, THEREFORE THE PARTIES AGREE AS FOLLOWS:

1. DEFINITIONS AND INTERPRETATION

1.1 Definitions

In this Agreement, unless the context otherwise requires, the following words and expressions bear the meanings respectively set out below:

“Agreed Percentage of Silicon” means the quantities of Silicon which Silpro undertakes to supply to Evergreen in accordance with Article 3.1.1;

“Contract Year” means a calendar year in the Gregorian Calendar and each fractional calendar year from the date of signature until the date of termination of this Agreement;

“Effective Date” means the day of the satisfaction of the condition set out in Article 2.1;

“Loan” means the loan granted pursuant to the Subordinated Loan Agreement;

“Silicon” means the solar grade polycrystalline silicon produced at the Silpro’s Plant and which meets the Silicon Specifications;

“Silicon Specifications” means the specifications of the Silicon as specified in Schedule 1;

“Silpro’s Plant” means the solar grade polycrystalline silicon production plant to be constructed and operated by Silpro in Saint Auban, France;

“Subordinated Loan Agreement” means the subordinated loan agreement entered into between Evergreen and Silpro of even date;

“Works” means the works arising out of and relating to the construction of Silpro’s Plant.

Page 4 of 17

07-December 2007     

1.2 Interpretation

In this Agreement, unless otherwise specified or the context otherwise requires:

1.2.1	words importing the singular shall include the plural and vice versa;
1.2.2	words importing any gender shall include all other genders;
1.2.3	words importing the whole shall be treated as including reference to any part of the whole;
1.2.4	reference to an Article is to the relevant article of this Agreement;
1.2.5	reference to this Agreement or to any other document is a reference to this Agreement or to that other document as modified, amended, varied, supplemented or replaced from time to time;
1.2.6	reference to a provision of law is a reference to that provision as extended, applied, amended, consolidated or re-enacted or as the application thereof is modified from time to time and shall be construed as including reference to any order, instrument, regulation or other subordinate legislation from time to time made under it, except as otherwise provided in this Agreement;
1.2.7	all references to the words ‘include’ and ‘including’ shall be construed without limitation;
1.2.8	a reference to writing or written includes faxes and e-mail;
1.2.9	headings used in this Agreement shall not affect its construction or interpretation;
1.2.10	words and phrases defined in any part of this Agreement bear the same meanings throughout this Agreement;
1.2.11	“day” means calendar day, “month” means a calendar month, “year” means a period of 365 days except in the case of a leap year which shall mean a period of 366 days;
1.2.12	any standards, regulations, codes stated in any part of this Agreement shall be interpreted as the latest version on the Effective Date of the said standard, regulation, code etc., unless stated otherwise;
1.2.13	wherever in this Agreement provision is made for the giving of notice, consent or approval by any person, unless otherwise stated, such shall not be unreasonably withheld. Any notice, consent or approval shall be in writing and the word ‘notify’ shall be construed accordingly. All notices shall be served on the Parties designated representative at the registered address of the Party or other address that a Party may notify the other Party of from time to time; and
1.2.14	the documents forming this Agreement are to be taken to be mutually explanatory of one another. For the purposes of interpretation, if any provision of the main body of this Agreement is inconsistent with a provision of the Schedules, the provision of the main body of this Agreement shall prevail.

2. DURATION

2.1	This Agreement will be binding upon the Parties as from the date of its signature and shall be effective upon disbursement by Evergreen to Silpro of the full amount of the Loan (the “Effective Date”).
2.2	Subject to Article 10.6, this Agreement has a fixed duration of 10 (ten) years from the date of delivery by Silpro to Evergreen of the first lot of Silicon under the terms of this Agreement and may only be extended beyond its expiry date pursuant to the prior written agreement of the Parties.

Page 5 of 17

07-December 2007     

2.3 Not greater than 3 (three) months and no less than 2 (two) months prior to the 5^th (fifth) anniversary of the Effective Date, either Party may by notice to the other, request that the terms of this Agreement be renegotiated to revise the terms to be consistent with the terms of agreements that would be negotiated at that time for the delivery of silicon in the amounts and at the times contemplated by this Agreement. The Parties shall attempt in good faith to reach agreement. If no agreement is reached by the 5^th (fifth) anniversary of the Effective Date, the provisions of Article 8 shall apply.

3. SALE AND PURCHASE OF SILICON

3.1 Quantities

3.1.1 Silpro undertakes to sell to Evergreen and Evergreen agrees to purchase, in any Contract Year commencing with the Contract Year in which Silpro’s Plant enters into commercial operation, [****] per cent) of those quantities of Silicon which:

(A)	are produced from Silpro’s Plant during such Contract Year; and
(B)	meet or exceed the Silicon specification as set-out in Schedule 1,
limited to [****] of the nominal capacity (as defined in the Preamble) (the “Agreed Percentage of Silicon”).

     3.2 Commencement of supply

3.2.1	Silpro’s construction and ramp up planning foresees a production volume of in-spec material of approximately [****] tons in [****] commencing in [****].
3.2.2	Silpro will inform Evergreen each month after the Effective Date of the planning and construction progress of Silpro’s Plant, including information on the anticipated date of commercial operation and the anticipated date on which the nominal capacity of the First Phase and Second Phase will be achieved in order to enable Evergreen to plan its plant utilisation.

3.3 Planned Quantities

Within one month after Silpro’s Plant enters into commercial operation and in January and July of each Contract Year (commencing with the Contract Year in which Silpro’s Plant enters into commercial operation), Silpro shall communicate to Evergreen in writing the planned dates and quantities of Silicon it will ship to Evergreen during the next twelve (12) months. Silpro shall inform Evergreen reasonably in advance if significant changes must be made to these planned dates and quantities.

3.4 Delivery Conditions

Silpro shall deliver the Silicon to Evergreen [****] Incoterms 2000, in accordance with the delivery schedule as determined pursuant to the provisions of Article 3.3 and the provisions relating to the division into units and packing of the Silicon contained in Schedule 2 (Delivery Units and Packing of Silicon).

Page 6 of 17

07-December 2007     

3.5 Price

3.5.1 Subject to Article 3.5.3, the price of the Silicon supplied by Silpro to Evergreen under this Article 3 shall be determined as follows:

Year of shipment of the Silicon	Silicon Price (€ / kg)
2009	[****]
2010	[****]
2011	[****]
2012	[****]
2013	[****]
2014	[****]
2015	[****]
2016	[****]
2017	[****]
2018	[****]
2019	[****]

3.5.2	These prices do not include the costs of carriage and insurance of the Silicon until it has been delivered to Evergreen pursuant to Article 3.4.
3.5.3	Price Adjustment

(A)

The prices set out in Article 3.5.1 (“Initial Purchase Price”) have been based on (i) the general prices in France for 2008 (for inflation calculation purposes), (ii) the assumption that the price for [****] is the actual price per metric ton (delivered price) to be agreed between Silpro and its [****] supplier and for [****] is € [****]/MWH and (iii) the assumption that the cost of [****] is [****]%) of the Silicon price (“CSf”) and the cost of [****] is [****]%) of the Silicon price (“Ef”).

(B)

The Parties shall adjust the Initial Purchase Price every January 1st and July 1st during the term of this Agreement, commencing from calendar year 2009, every year to reflect [****] according to the following:

(1)	the cost of [****] has changed by [****]%) or more when compared to the costs for 2008, as set out in Article 3.5.3(A); or
(2)	the aggregate cost of [****] has changed by [****]%) or more when compared to the costs for 2008, as set out in Article 3.5.3(A).

(C)	In determining the amount (“Price Change”) to be added to or subtracted from the Initial Purchase Price, the following formula shall be used:
	Price Change = [****] x relevant Initial Purchase Price.
	Where:
	- [****];

Page 7 of 17

07-December 2007     

- [****];
*	Changes in the [****] will be reasonably documented based on actual performance of SilPro’s plant after stable operations have been achieved.

(D)	The Price Change shall be cumulative and shall be added to (in the case of a price increase) or subtracted from (in the case of a price decrease) the Initial Purchase Price.
	Example only: in the calendar year 2008 there are a [****] price increase of 4% and an [****] price decrease of 4%. Then the 2009 price remains [****] Euro as in the table. In 2009 a further 7% [****] price increase (cumulative 11% compared to 2008) and a further 10% [****] price decrease (cumulative 14% compared to 2008 level). The price correction for 2010 will be:
	[****]

3.6	Payment
	Evergreen shall pay invoices for Silicon in full within 30 days of receipt in cleared funds to the following bank account:
	Bank: [•]
	Branch: [•]
	Account Number: [•]
	Swift Code: [•]
	or to such other bank account as may be nominated from time to time by Silpro to Evergreen.
3.7	Specification of the Silicon
	Silpro warrants that the Silicon will conform in all material respects to the Silicon Specifications. All other warranties or conditions (whether express or implied) as to quality, condition, description, compliance with sample or fitness for purpose (whether statutory or otherwise) other than those expressly set out in this Agreement are excluded from this Agreement to the fullest extent permitted by law.
3.8	Suspension of Supply of Silicon
	If Silpro reasonably considers that Evergreen is in breach of any of its material obligations under this Agreement and Evergreen fails to cure such breach within thirty (30) calendar days after written notice thereof, Silpro shall be entitled to suspend the whole or part of supply of Silicon to Evergreen (and the Agreed Percentage of Silicon for the relevant Contract Year shall be reduced accordingly), until such time as Evergreen has remedied its failure to perform.

4. TITLE AND RISK

4.1	While any and all of the Silicon is in the possession or custody of Evergreen, Evergreen agrees to bear the risk of any loss, contamination or damage to same. The Silicon shall be deemed to be in the possession or custody of Evergreen as soon as it is delivered to Evergreen [****] (Incoterms 2000).
4.2	Ownership in any applicable shipment of Silicon shall not pass to Evergreen until Silpro has received in full (in cash or cleared funds) all sums due to it in respect of such shipment.
4.3	Until such time as it has made full payment for the applicable shipment of silicon Evergreen shall not impose or permit to be imposed upon the Silicon, any liens or encumbrances whatsoever.

Page 8 of 17

07-December 2007     

5.	SET-OFF
	Without prejudice to any other right or remedy it may have, each Party reserves the right to set off any amount owing at any time to it by the other Party under this Agreement against any amount payable by such Party to the other Party whether under this Agreement or under any other agreement or otherwise.
6.	LIABILITY

6.1

Subject to Article 9.2, each Party shall indemnify and hold harmless the other Party its personnel and agents from and against all claims, damages, losses and expenses (including reasonable legal fees and expenses) in respect of (1) bodily injury, sickness, disease or death which is attributable to any negligence, wilful act or breach of this Agreement by such Party, its personnel and agents and (2) matters for which liability maybe excluded from insurance cover.

6.2

No Party shall be liable to any other Party for loss of profit, loss of any contract or for any other consequential loss or damage which may be suffered by the other Party in connection with this Agreement.

7. ASSIGNMENT

7.1 Subject to (A)-(D) below and 7.2 neither Party may, or may purport to, assign, transfer, mortgage, charge, pledge or otherwise encumber all or any portion of its rights, interests or obligations arising under this Agreement without the prior written consent of the other Party, except that:

(A)	Subject to (B) and (D) below Silpro may freely assign all or any portion of its rights and obligations under this Agreement (or any document or legal instrument referred to in this Agreement), to (i) any shareholder of Silpro or Affiliate of such shareholder or (ii) to any Lender.
	For the purposes of this Article 12(A), “Affiliate” means in relation to any person, any other person that, directly or indirectly, controls or is controlled by or is under the same control as such person and the term “control” shall mean the ability to exercise, or to promote the exercise, directly or indirectly, of at least 50% of the voting rights attached to a person’s equity interests or shares.
	“Lenders(s)” means any bank, special purpose project company, trust company, mortgage company, insurance company, pension fund, real estate investment trust, or other lending or financial institutions (including indirect lenders and loan participants) providing debt, equity, lease and/or bond financing or financial services, or credit support or other credit enhancement in any way related to the construction of the Works
(B)	If Silpro does not obtain Evergreen’s prior written consent to any such assignment, transfer, mortgage, charge, pledge or other encumbrance under sub-clause (A) above, Silpro shall not be released from any obligation hereunder unless and until Silpro provides a guarantee to Evergreen in a form acceptable to Evergreen in its sole discretion.
(C)	If Silpro obtains Evergreen’s prior written consent to any such assignment, transfer, mortgage, charge, pledge or other encumbrance under sub-clause (A) above assignment Silpro shall not be required to provide an unconditional guarantee of the obligations under this Agreement to Evergreen and Silpro shall be released from any obligation hereunder upon the execution of an assignment and assumption agreement whereby Silpro assigns all of its rights to the applicable assignee and such assignee assumes all of the obligations of Silpro under this Agreement.

Page 9 of 17

07-December 2007     

(D) Successive assignments of Silpro’s rights under this Agreement shall remain subject to this Article 7.1 provided that Silicium de Provence S.A.S. shall not be released from a guarantee provided in satisfaction of its obligations under this Article 7.1 as a result of an assignment that occurs after the initial assignment by Silpro unless Evergreen’s consent is obtained in which case Silpro shall be released and item (C) above shall apply.

7.2	Evergreen may assign or transfer this Agreement without the consent of Silpro in the event of a change of control of Evergreen or the sale of all or substantially all the assets of Evergreen to which this Agreement relates.
7.3	In particular, it shall be a condition of this Agreement that Evergreen shall not grant any mortgage, charge, pledge, lien or other security interest of any kind or arrangement that would effect the rights and obligations of the Parties under this Agreement, whether to its creditors or any other third party.
7.4	Any assignment, transfer, mortgage, charge, pledge or other giving of security by one Party hereunder shall not in any way diminish the other Party’s rights and obligations or the giving Parties successor’s rights and obligations under this Agreement, including any amendments hereto.
7.5	On the written request of Silpro, Evergreen shall cooperate with Silpro and any Lenders, by entering, in a timely manner, into such direct agreements as may reasonably be necessary and customary for project financing of the Works. Such agreements may include provisions which permit the Lender(s), in the event of a breach of contract that would permit Evergreen to terminate the Agreement, to:

(i)	Take-over the Agreement;
(ii)	step-in, rectify or otherwise cure any breach of this Agreement;
(iii)	assign or otherwise transfer this Agreement.

8. TERMINATION

8.1 Evergreen shall be entitled to terminate this Agreement if:

8.1.1 Silpro commits a breach of any of its material obligations under this Agreement and fails to remedy such breach (if such breach is remediable) within a period of [****] days after being notified in writing to do so, without prejudice to any rights that have accrued under this Agreement or any of its other rights or remedies. A breach of a material obligation shall (without limitation) include the following:

(A)	Silpro fails to pay any amount due to Evergreen under this Agreement on the due date for payment and remains in default for not less than [****] days after being notified in writing to make such payment, provided that Silpro does not dispute in good faith such payment as being due and payable;
(B)	Silpro fails to commence supply by [****];
(C)	Silpro suspends, or threatens to suspend, payment of its debts; or
(D)	Silpro suspends or ceases, or threatens to suspend or cease, to carry on all or a substantial part of its business.

8.1.2 the Parties fail to renegotiate the terms of this Agreement by the 5^th Anniversary of the Effective Date, in accordance with Article 2.3.

Page 10 of 17

07-December 2007     

8.2	If Evergreen has entered into a direct agreement with any Lender then the terms thereof shall take priority over the terms of this Agreement.
8.3	Silpro shall be entitled to terminate this Agreement if:

8.3.1 Evergreen commits a breach of any of its material obligations under this Agreement and fails to remedy such breach (if such breach is remediable) within a period of [****] days after being notified in writing to do so, without prejudice to any rights that have accrued under this Agreement or any of its rights or remedies. A breach of a material obligation shall (without limitation) include the following:

(A)	Evergreen fails to pay any amount due to Silpro under this Agreement on the due date for payment and remains in default not less than [****] days after being notified in writing to make such payment, provided that Evergreen does not dispute in good faith such payment as being due and payable; or
(B)	a suspension of the supply of the Silicon pursuant to Article 3.8 is continuing for more than [****] months; or
(C)	Evergreen suspends, or threatens to suspend, payment of its debts; or
(D)	Evergreen suspends or ceases, or threatens to suspend or cease, to carry on all or a substantial part of its business.

8.4 After termination for whatever reason Evergreen shall:

8.4.1

Pay for the Silicon delivered or en-route to Evergreen pursuant to this Agreement in accordance with the terms of herewith; or

8.4.2

Return any deliveries not then paid for but then remaining in Evergreen’s possession or custody or en-route to Evergreen upon termination of this Agreement within 30 (thirty) days after the date of such termination, loaded aboard a carrier at Evergreen’s Facility, with Evergreen bearing all packing and loading costs, and risk until delivered to [****] Incoterms 2000 to Silpro or an entity nominated by Silpro.

9. PERMITS, TAXATION AND EXPORT CONTROL

9.1	Evergreen represents and warrants that it has the foreign trade license or any other license, permits or certificates as may be required by law to enter into this
9.2	Evergreen shall keep Silpro fully informed about any laws and regulations applicable to Evergreen regarding the import of Silicon. In the event Evergreen is aware of any import restrictions relating to the Silicon, it shall inform Silpro, as soon as possible.
9.3	Silpro is entitled to terminate this Agreement in whole or in part without compensation, if any of the required import licenses, permits, approvals and consents are not valid or have not been granted or are withdrawn by the responsible authorities.
9.4	Evergreen shall be responsible for all taxes and duties relative to the import of Silicon.

10. FORCE MAJEURE

10.1 A Party, provided that it has complied with the provisions of Article 10.4, shall not be in breach of this Agreement, nor liable for any failure or delay in performance of any obligations under this Agreement (and, subject to Article 10.4, the time for performance of the obligations shall be extended accordingly) arising from or attributable to acts, events, omissions or accidents beyond its reasonable control and which it has not caused or contributed to in any way (“Force Majeure Event”), which renders it impossible for the affected Party to perform its obligations under this Agreement, including but not limited to any of the following:

Page 11 of 17

07-December 2007     

10.1.1	Acts of God, including but not limited to fire, flood, earthquake, windstorm or other natural disaster;
10.1.2	war, threat of or preparation for war, armed conflict, imposition of sanctions, embargo, breaking off of diplomatic relations or similar actions;
10.1.3	terrorist attack, civil war, civil commotion or riots;
10.1.4	nuclear, chemical or biological contamination or sonic boom;
10.1.5	fire, explosion or accidental damage;
10.1.6	loss at sea;
10.1.7	extreme adverse weather conditions.

10.2	Force Majeure shall not include economic hardship, changes in market conditions, subcontractor’s default or delay, breakdown or ordinary wear and tear of equipment, machinery or parts of either Party’s Facility or of the facilities of any of its subcontractors.
10.3	If one Party’s obligations are suspended pursuant to Article 10.1., the corresponding obligations of the other Party will be suspended to the same extent save that Article 10.7 below shall prevail.
10.4	Any Party that is subject to a Force Majeure Event shall not be in breach of this Agreement provided that:

10.4.1	it promptly notifies the other Party in writing of the nature and extent of the Force Majeure Event causing its failure or delay in performance;
10.4.2	it can demonstrate that it could not have avoided the effect of the Force Majeure Event by taking precautions which, having regard to all the matters known to it before the Force Majeure Event, it ought reasonably to have taken, but did not; and
10.4.3	it can demonstrate that it has used [****] to mitigate the effect of the Force Majeure Event to carry out its obligations under this Agreement in any way that is reasonably practicable and to resume the performance of its obligations as reasonably possible.

10.5	If the Force Majeure Event prevails for a continuous period of more than [****] months, the Party that is not receiving the benefit of the Agreement as a result of the applicable Force Majeure may terminate this Agreement by giving [****] days written notice to the other Party, in the event that the Force Majeure continues for more than [****] months the Party that would otherwise have received the benefit of the Agreement may terminate this Agreement by giving [****] days written notice to the other Party. On the expiry of the [****] day notice period, this Agreement will terminate. Such termination shall be without prejudice to the rights of the Parties in respect of any breach of this Agreement occurring prior to such termination.
10.6	The duration of this Agreement shall be automatically extended for the period of any Force Majeure Event, unless earlier terminated in accordance with Article 8 or Article 10.5.
10.7	The payment obligations of the Parties shall not be suspended by a Force Majeure Event.

11. CONFIDENTIALITY

11.1	Each Party undertakes that it shall not at any time during this Agreement and for a period of [****] years after termination of this Agreement, disclose to any person any Confidential Information
11.2	For the purpose of this Article 11, “Confidential Information” means any knowledge, financial data or operating data, trade secrets, experience or know-how, and information of all kinds in whatever form about technologies, finances and costs, marketing and business (including but

Page 12 of 17

07-December 2007     

not limited to term sheets, notes, analyses, agreements, compilations, studies and interpretations) and suchlike which is disclosed by or on behalf of the disclosing Party whether or not the same is marked as Confidential Information including any Confidential Information that is communicated to the receiving Party orally and not reduced in writing. “Confidential Information” shall exclude any information that:

i.	is or becomes (through no improper action or inaction by the receiving Party or any affiliate, agent, consultant or employee) generally available to the public, or
ii.	was in its possession or known by it prior to receipt from the disclosing Party, provided the receiving Party complies with restrictions imposed thereon by third parties, or
iii.	was rightfully disclosed to it by a third party without restriction, provided the receiving Party complies with restrictions imposed thereon by third parties , or
iv.	was independently developed without use of any Confidential Information of the disclosing Party

b. Each Party may disclose any other Party’s Confidential Information:

i.	to its employees, officers, representatives or advisers who need to know such information for the purposes of carrying out the Party’s obligations under this Agreement. Each Party shall ensure that its employees, officers, representatives or advisers to whom it discloses the other Party’s Confidential Information comply with this Article 11; and
ii.	as may be required by law, court order or any governmental or regulatory authority.

c.	No Party shall use any other Party’s Confidential Information for any purpose other than to perform its obligations under this Agreement.
d.	Notwithstanding the foregoing, Silpro may disclose any information with respect to this Agreement and its performance to any of Silpro’s shareholders or affiliates of such shareholders, provided such information is covered under a confidentiality agreement as least as restrictive as above.

12. NOTICES

12.1 Any notice or other communication required to be given under this Agreement shall be in writing and shall be delivered to the Party required to receive the notice or communication at its address as set out below:

Silpro

Usine de Saint Auban,

04 600 Saint Auban, France.

Attention: Frank Wouters, CEO

Evergreen

138 Bartlett Street

Marlborough, MA 01752 U.S.A.

Richard G. Chleboski

or at such other address as the relevant Party may specify by notice in writing to the other Party.

Any notice or other communication sent by e-mail or facsimile must be confirmed by commercial courier.

Page 13 of 17

07-December 2007     

12.2 Any notice or other communication shall be deemed to have been duly given:

a.	if delivered personally, when left at the address referred to in Article 12;
b.	if delivered by commercial courier, on the date of signature of the courier’s receipt;
c.	if sent by fax, at the time of transmission;
d.	if sent by e-mail, at the time of despatch.

12.3 If deemed receipt under Article 12.2 is not within business hours (meaning 9.00 am to 5.30 pm Monday to Friday on a day that is not a public holiday in the place of receipt), such notice or communication shall be deemed received when business next starts in the place of receipt.

13. APPLICABLE LAW AND LANGUAGE

13.1	This Agreement shall be governed by and construed in accordance with French law.
13.2	The language of this Agreement and all correspondence, notices and written communications shall be English.

14. MISCELLANEOUS

14.1	If any provision of this Agreement should be or become partly or wholly void, the remaining provisions will continue to apply. The Parties shall agree in good faith to replace the void provisions or the void part of the provision by a legally valid arrangement, which comes as close as possible to the commercial meaning and purpose of the void provision or void part of the provision.
14.2	This Agreement constitutes the entire agreement of the Parties with respect to the subject matter hereof and, except as herein stated and in the instruments and documents to be executed and delivered pursuant hereto, contains all of the representations, undertakings and agreements of the Parties. This Agreement supersedes all prior meetings, correspondence, and negotiations between the Parties. There are no representations, warranties, covenants, agreements, or collateral understandings, oral or otherwise, expressed or implied, of any kind between the Parties hereto, respecting the subject matter hereof, except as contained or referred herein, and neither Party has relied on any statement outside of the written agreement.
14.3	The provisions of Articles 4 (Title & Risk), 6 (Liability), 8 (Termination), 11 (Confidentiality) and 15 (Disputes) shall continue to apply after termination of this Agreement.

Page 14 of 17

07-December 2007     

15. DISPUTES

15.1	If any dispute arises out of or in connection with this Agreement, directors or other senior representatives of the Parties with authority to settle the dispute will, within 30days of a written request from one Party to the other, meet in a good faith effort to resolve the dispute.
15.2	In the event that any dispute arising out of or in connection with Articles 3.1 (Quantities), 3.7 (Specification of the Silicon) of this Agreement is not resolved pursuant to Article 15.1, the Parties agree to submit the matter to administered expertise proceedings in accordance with the Rules for Expertise of the International Chamber of Commerce. The findings of the expert shall be binding upon the Parties.
15.3	All disputes arising out of or in connection with this Agreement which are not resolved pursuant to Article 15.1, or, where applicable, Article 15.2, shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce (ICC) by three arbitrators appointed in accordance with the said Rules. The arbitration shall be conducted in English and the seat shall be Paris.
15.4	Unless otherwise expressly agreed in writing by the Parties to the arbitration proceedings:

a.	the arbitration proceedings shall be conducted in the English language and the arbitrators shall be fluent in the English language;
b.	in addition to the ICC Rules, the Parties agree that the arbitration shall be conducted according to the IBA Rules of Evidence;
c.	the award shall include interest from the date of any breach or violation of this Agreement as determined by the arbitral tribunal, and from the date of the award until paid in full.

Page 15 of 17

07-December 2007     

IN WITNESS whereof this Agreement has been entered into the day and year first before written.

Executed in Cologne in 2 original copies.

	/s/ Frank Wouters
SIGNED by	Frank Wouters
for and on behalf of
SILICIUM DE PROVENCE S.A.S
	/s/ Richard G. Chleboski
SIGNED by	Richard Chleboski
for and on behalf of
EVERGREEN SOLAR, INC.

Page 16 of 17

07-December 2007     

SCHEDULE 1
SILICON SPECIFICATIONS

[****]

Page 17 of 17

07-December 2007     

SCHEDULE 2
DELIVERY UNITS AND PACKING OF SILICON

[Silpro to provide]

Page 18 of 17

EX-10.40

Exhibit 10.40

7-December 2007

................................2007

SILICIUM DE PROVENCE SAS

and

EVERGREEN SOLAR, INC.

SUBORDINATED LOAN AGREEMENT

HERBERT SMITH LLP

Page 1 of 12

7-December 2007

TABLE OF CONTENTS

Clause	Headings	Page
1.	INTERPRETATION		3
2.	LOAN		4
3.	INTEREST AND REDEMPTION		4
4.	EARLY REDEMPTIONS		5
5.	REPRESENTATIONS		5
6.	UNDERTAKINGS		5
7.	SUBORDINATION		6
8.	COSTS		6
9.	PARTIAL PAYMENTS		6
10.	ASSIGNMENT		7
11.	WHOLE AGREEMENT		8
12.	VARIATION AND WAIVER		8
13.	SEVERANCE		8
14.	NOTICES		8
15.	CONFIDENTIALITY		9
16.	APPLICABLE LAW AND LANGUAGE		10
17.	DISPUTES		10

Page 2 of 12

7-December 2007

SUBORDINATED LOAN AGREEMENT

THIS LOAN AGREEMENT is made on 7th December, 2007

BETWEEN:

(1)	SILICIUM DE PROVENCE S.A.S., a private company with limited liability, incorporated under the laws of France, whose registered office is situated at Usine de Saint Auban, 04 600 Saint Auban, France, represented by Mr. Frank Wouters, hereinafter referred to as the “Borrower”, and
(2)	EVERGREEN SOLAR, INC., a company incorporated in Delaware, U.S.A., with registered number 2426798, whose registered office is situated at 138 Bartlett Street, Marlboro, Massachusetts 01752, U.S.A. represented by Richard Chleboski, hereinafter referred to as the “Lender”,

Hereinafter referred to severally each as a “Party” and jointly as the “Parties”.

WHEREAS:

(A)	The Borrower intends to develop a plant in France for the production of solar grade silicon.
(B)	Lender and Borrower have entered into an agreement for the sale and purchase of solar grade silicon on the same date hereof (the “Silicon S&P Agreement”).
(C)	Lender and Borrower have agreed that in consideration for the Borrower entering into the Silicon S&P Agreement with the Lender, the Lender shall make available to the Borrower, by way of a subordinated loan, an amount of thirty million Euros (EUR 30,000,000) (the “Loan”).
(D)	The Parties wish to set out the terms and conditions of the Loan in this agreement (the “Loan Agreement”).

NOW, THEREFORE THE PARTIES AGREE AS FOLLOWS:

1.	INTERPRETATION
	In this Loan Agreement, unless otherwise specified or the context otherwise requires:
1.1	words importing the singular shall include the plural and vice versa;
1.2	words importing any gender shall include all other genders;
1.3	words importing the whole shall be treated as including reference to any part of the whole;
1.4	reference to an Article is to the relevant article of this Loan Agreement;
1.5	reference to this Loan Agreement or to any other document is a reference to this Loan Agreement or to that other document as modified, amended, varied, supplemented or replaced from time to time;
1.6	reference to a provision of law is a reference to that provision as extended, applied, amended, consolidated or re-enacted or as the application thereof is modified from time to time and shall be construed as including reference to any order, instrument, regulation or other subordinate legislation from time to time made under it, except as otherwise provided in this Loan Agreement;

Page 3 of 12

7-December 2007

1.7	all references to the words ‘include’ and ‘including’ shall be construed without limitation;
1.8	a reference to writing or written includes faxes and e-mail;
1.9	headings used in this Loan Agreement shall not affect its construction or interpretation;
1.10	words and phrases defined in any part of this Loan Agreement bear the same meanings throughout this Agreement;
1.11	wherever in this Loan Agreement provision is made for the giving of notice, consent or approval by any person, unless otherwise stated, such shall not be unreasonably withheld. Any notice, consent or approval shall be in writing and the word ‘notify’ shall be construed accordingly. All notices shall be served on the Parties designated representative at the registered address of the Party or other address that a Party may notify the other Party of from time to time.
2.	LOAN
2.1	The Lender grants the Borrower a loan of a total principal amount of thirty million Euros (EUR 30,000,000) to be disbursed to the Borrower in two instalments, as follows:

2.1.1	A first instalment of fifteen million Euros (EUR 15,000,000) to be paid no later than 30 November 2007; and
2.1.2	A second instalment of fifteen million Euros (EUR 15,000,000) to be paid no later than 31 January 2008.

2.2	The actual disbursement date of the last instalment of the Loan to the Borrower shall be the “Effective Date”.
2.3	The Loan is to be paid by the Lender into the Borrower’s account in immediately available cleared funds as follows:
	Bank: ING Belgium S.A., Succursale en France
	Branch: Immeuble Les Caryatides, 24/26 boulevard Carnot, 59042 Lille cedex
	Account Number: 30438
	IBAN number: FR76 3043 8000 0836 8300 3000 905
	BIC Number: INGBFRPP
	Code Guichet: 00008
	No du Compte: 36830 03 0009 Cle RIB : 05
	or to such other bank account as may be nominated from time to time by the Borrower to the Lender pursuant to Article 14.
2.4	The Loan shall be used by the Borrower solely to finance the works arising out of and relating to the construction of the Borrower’s plant (the “Works”). For the avoidance of doubt, the Loan shall not be used to increase management remuneration, for the repayment of any indebtedness for borrowed money or for any capital distribution to the Borrower’s equity holders.
3.	INTEREST AND REPAYMENT
3.1	The Borrower shall, from the Effective Date, pay interest in arrears to the Lender on the Loan outstanding from time to time, such interest calculated at a rate of three percent (3%) per Calendar Year compounded annually on the actual outstanding amount of the Loan plus any accrued interest and any other amounts due hereunder; provided that upon a failure to repay a part of the Loan when due or any other default by Borrower set forth in

Page 4 of 12

7-December 2007

	Clause 18 under this Loan Agreement, the foregoing rate shall increase to an amount equal to (a) the twelve-month EURIBOR rate determined on the business day preceding the default as reported in the Wall Street Journal, plus (b) three (3%) on the unpaid amount only. “Calendar Year” means the period of 365 or 366 days, as the case may be, beginning on 1st January and ending on 31st December.
3.2	Interest shall be calculated on the basis of the actual number of days elapsed.
3.3	The Borrower shall repay the Loan and interest and accrued hereunder, on the date falling five (5) years after the Effective Date (the “Repayment Date”), save that the Borrower may prepay all or part of the Loan in accordance with Article 4 and provided that in the event that the Lender terminates the Silicon S&P Agreement pursuant to Article 11.1 thereof, the Repayment Date shall be the effective date of such termination.
3.4	The interest due on the outstanding amount of the Loan (first and second instalments) shall be payable in whole on the Repayment Date.
3.5	For the purposes of Articles L.313-1 et seq., R.313-1 and R.313-2 of the French Code de la Consommation, the Lender hereby informs the Borrower that the all-in rate (taux effectif global) of the Loan is three percent (3%).
3.6	All payments made by the Borrower to the Lender shall be in Euros in immediately available cleared funds by electronic transfer to an account held by Silicon Valley Bank, account number [•], swift code [•], for the credit of [•].
4.	EARLY REPAYMENT
4.1	The Borrower shall at all times be allowed to prepay the Loan in whole or in part, without premium or penalty, provided it does so in whole multiples of EUR 100,000 and that ten (10) days prior written notice has been delivered to the Lender.
4.2	Notwithstanding the provisions of Clause 3.4, any early redemption under this Agreement shall include accrued interest on the amount prepaid.
5.	REPRESENTATIONS
	Except as otherwise stated below, each of the Lender and the Borrower hereby represents and warrants that:

(A)	It is a company duly incorporated and validly existing under the laws of its jurisdiction of incorporation;
(B)	The obligations expressed to be assumed by it are valid and binding obligations;
(C)	The entry into and performance by it of this Loan Agreement do not and will not conflict with (a) any provision of any law or regulation applicable to it, (b) its constitutional documents, and (c) any agreement which is binding upon it or any of its assets; and
(D)	It has the power to enter into, perform and deliver this Loan Agreement and the transactions contemplated therein.

6.	UNDERTAKINGS
	Except as otherwise stated below, each of the Lender and the Borrower hereby undertakes:

(A) To do all such things as are necessary to maintain its corporate existence;

Page 5 of 12

7-December 2007

(B)	To obtain, maintain and comply with the terms of any authorisation required under any applicable law or regulation to (i) enable it to carry out its activities and (ii) perform its obligations under this Loan Agreement; and
(C)	To comply with all applicable laws and regulations.

7.	SUBORDINATION
7.1	In the event that insolvency proceedings are initiated against the Borrower or that it is unable to pay its debts as they fall due or in the event of any moratorium on its debts or if the Borrower has proposed any composition, assignment or arrangement to its creditors, the obligation to repay the outstanding amount of the Loan:

7.1.1

shall be subordinated to any indebtedness of the Borrower to any lending or financial institution in any way related to the Works, both present and future notwithstanding whether such indebtedness is recoverable by process of law or is conditional or unconditional (“Financial Loans”);

7.1.2

shall rank pari passu with the rights of (i) any other lender under other loans similar to the Loan, entered into (or to be entered into) between the Borrower and any other silicon processor or photovoltaic items manufacturer (“Manufacturer Loans”), and (ii) the Borrower’s shareholders under shareholders’ loans entered into (or to be entered into) between the Borrower and any of its shareholders (“Shareholder’s Loans”).

7.2	The Borrower undertakes not to grant any security interest of any kind in respect of any Manufacturer Loan or Shareholder’s Loan unless the Loan benefits from similar security of the same rank.
7.3	The Lender undertakes, and acknowledges that it is a condition of this Loan Agreement, that it shall not grant any mortgage, charge, pledge, lien or other security interest of any kind or arrangement that would adversely effect the rights of the Borrower under this Loan Agreement, whether to its creditors or any other third party. Without prejudice to the foregoing, the Borrower acknowledges and accepts that the assets of the Lender, including without limitation Lender’s rights under this Loan Agreement, are currently and are expected to continue to be subject to liens in favour of Lender’s creditors.
7.4	The Lender undertakes that, on the written request of the Borrower, the Lender shall cooperate with the Borrower and any creditor providing a Financial Loan, Manufacturer Loan or Shareholder’s Loan to the Borrower, by entering, in a timely manner, into such inter-creditor agreement as may reasonably be necessary and customary for the implementation of Articles 7.1 and 7.2 above.
8.	COSTS
	The Lender and the Borrower shall each pay their own respective costs, taxes and fees in connection with the implementation of this Loan Agreement.
9.	PARTIAL PAYMENTS
	If the Lender receives a payment that is insufficient to discharge all the amounts then due and payable by the Borrower under this Loan Agreement, the Lender shall apply that payment towards the obligations of the Borrower in the following order:

(A)	in or towards payment of any unpaid fees, costs and expenses;
(B)	in or towards payment of accrued interest; and

Page 6 of 12

7-December 2007

(C) in or towards payment of any principal due but unpaid under this Loan Agreement.

10.	ASSIGNMENT
10.1	Subject to (A) – (D) below and 10.2 neither Party may, or may purport to, assign, transfer, mortgage, charge, pledge or otherwise encumber all or any portion of its rights, interests or obligations arising under this Loan Agreement without the prior written consent of the other Party, except that:

(A)	The Borrower may freely assign, transfer, mortgage, charge, pledge or otherwise encumber all or any portion of its rights and obligations under this Loan Agreement (or any document or legal instrument referred to in this Loan Agreement), (i) to any shareholder of the Borrower or Affiliate of such shareholder or (ii) to any Creditor.
	For the purposes of this Article 12(A), “Affiliate” means in relation to any person, any other person that, directly or indirectly, controls or is controlled by or is under the same control as such person and the term “control” shall mean the ability to exercise, or to promote the exercise, directly or indirectly, of at least 50% of the voting rights attached to a person’s equity interests or shares.
	“Creditor(s)” means any bank, special purpose project company, trust company, mortgage company, insurance company, pension fund, real estate investment trust, or other lending or financial institutions (including indirect lenders and loan participants) providing debt, equity, lease and/or bond financing or financial services, or credit support or other credit enhancement in any way related to the construction of the Works
(B)	If the Borrower does not obtain the Lender’s prior written consent to any such assignment, transfer, mortgage, charge, pledge or other encumbrance under sub-clause (A) above the Borrower shall not be released from any obligation hereunder unless and until Borrower provides an unconditional repayment guarantee to Lender in a form acceptable to Lender in its sole discretion.
(C)	If the Borrower obtains the Lender’s prior written consent to any such assignment, transfer, mortgage, charge, pledge or other encumbrance under sub-clause (A) above assignment the Borrower shall not have to provide a repayment guarantee to Lender and the Borrower shall be released from any obligation hereunder upon the execution of an assignment and assumption agreement whereby Borrower assigns all of its rights to the assignee and the assignee assumes all of the obligations of Borrower under this Loan Agreement.
(D)	Successive assignments of Borrower’s rights under this Loan Agreement shall remain subject to this Article 10.1 provided that Silicium de Provence S.A.S. shall not be released from a guarantee provided in satisfaction of its obligations under this Article 10.1 as a result of an assignment that occurs after the initial assignment by the Borrower unless the Lender’s consent is obtained in which case the Borrower shall be released and item (C) above shall apply.

10.2 The Lender may assign or transfer this Loan Agreement without the consent of the Borrower in the event of a change of control of the Lender or the sale of all or substantially all the assets of the Lender to which this Loan Agreement relates.

Page 7 of 12

7-December 2007

10.3

Any assignment, transfer, mortgage, charge, pledge or other giving of security by one Party hereunder shall not in any way diminish the other Party’s rights and obligations or the giving Parties successor’s rights and obligations under this Loan Agreement, including any amendments hereto

10.4

On the written request of the Borrower, the Lender shall cooperate with the Borrower and any Creditors, by entering, in a timely manner, into such direct agreements as may reasonably be necessary and customary for project financing of the Works. Such agreements may include provisions which permit the Creditors, in the event of a breach of the Loan Agreement or the Silicon S&P Agreement that would permit the Lender to terminate the Loan Agreement, to:

(i)	Take-over the Loan Agreement;
(ii)	step-in, rectify or otherwise cure any breach of this Loan Agreement;
(iii)	assign or otherwise transfer this Loan Agreement.

11.	WHOLE AGREEMENT
	This Loan Agreement constitutes the entire agreement of the Parties with respect to the subject matter hereof and, except as herein stated and in the instruments and documents to be executed and delivered pursuant hereto, contains all of the representations, undertakings and agreements of the Parties. This Loan Agreement supersedes all prior meetings, correspondence, and negotiations between the Parties. There are no representations, warranties, covenants, agreements, or collateral understandings, oral or otherwise, expressed or implied, of any kind between the Parties hereto, respecting the subject matter hereof, except as contained or referred herein, and neither Party has relied on any statement outside of the written agreement.
12.	VARIATION AND WAIVER
12.1	Any variation of this Loan Agreement must be in writing and signed by or on behalf of all Parties.
12.2	A waiver of any right under this Loan Agreement is only effective if it is in writing and it applies only to the Party to which the waiver is addressed and the circumstances for which it is given.
13.	SEVERANCE
	If any provision of this Loan Agreement (or part of a provision) appears to be invalid, unenforceable, illegal, or non-binding the other provisions will remain in force. The Parties are obliged to replace the invalid, unenforceable, illegal, or non-binding provision of this Loan Agreement (or part of a provision) with other provisions that are valid, enforceable, legal and binding, in such way that the new provisions differ as little as possible from the original provisions, taking into account the object, purpose and contents of this Loan Agreement.
14.	NOTICES
14.1	Any notice or other communication required to be given under this Loan Agreement shall be in writing and shall be delivered to the Party required to receive the notice or communication at its address as set out below:
	Borrower
	Usine de Saint Auban,

Page 8 of 12

7-December 2007

	04 600 Saint Auban, France.
	Attention: Frank Wouters, CEO
	Lender
	138 Bartlett Street
	Marlboro, Massachusetts, 01752 U.S.A.
	Attention: Richard Chleboski, Vice President
	or at such other address as the relevant Party may specify by notice in writing to the other Parties.
	Any notice or other communication sent by e-mail or facsimile must be confirmed by commercial courier.
14.2	Any notice or other communication shall be deemed to have been duly given:

(A)	if delivered personally, when left at the address referred to in Article 14.1; or
(B)	if delivered by commercial courier, on the date of signature of the courier’s receipt; or
(C)	if sent by fax, at the time of transmission; or
(D)	if sent by e-mail, at the time of despatch;
(E)	if deemed receipt under the previous paragraphs of this Article 16.2 is not within business hours (meaning 9.00 am to 5.30 pm Monday to Friday on a day that is not a public holiday in the place of receipt), when business next starts in the place of receipt.

15.	CONFIDENTIALITY
15.1	Each Party undertakes that it shall not at any time during this Loan Agreement, and for a period of 5 (five) years after termination of this Loan Agreement, disclose to any person any Confidential Information.
15.2	For the purpose of this Article 15, “Confidential Information” means any knowledge, financial data or operating data, trade secrets, experience or know-how, and information of all kinds in whatever form about technologies, finances and costs, marketing and business (including but not limited to term sheets, notes, analyses, agreements, compilations, studies and interpretations) and suchlike which is disclosed by or on behalf of the disclosing Party whether or not the same is marked as Confidential Information including any Confidential Information that is communicated to the receiving Party orally and not reduced in writing. “Confidential Information” shall exclude any information that:

i.	is or becomes (through no improper action or inaction by the receiving Party or any affiliate, agent, consultant or employee) generally available to the public, or
ii.	was in its possession or known by it prior to receipt from the disclosing Party, provided the receiving Party complies with restrictions imposed thereon by third parties, or
iii.	was rightfully disclosed to it by a third party provided the receiving Party complies with restrictions imposed thereon by third parties , or
iv.	was independently developed without use of any Confidential Information of the disclosing Party”

15.3 Each Party may disclose the other Party’s Confidential Information:

Page 9 of 12

7-December 2007

15.3.1	to its employees, officers, representatives or advisers who need to know such information for the purposes of carrying out the Party’s obligations under this Loan Agreement. Each Party shall ensure that its employees, officers, representatives or advisers to whom it discloses the other Party’s confidential information comply with this Article 15; and
15.3.2	as may be required by law, court order or any governmental or regulatory authority.

15.4	No Party shall use any other Party’s confidential information for any purpose other than to perform its obligations under this Loan Agreement.
16.	APPLICABLE LAW AND LANGUAGE
16.1	This Agreement shall be governed by and construed in accordance with French law.
16.2	The language of this Agreement and all correspondence, notices and written communications shall be English.
17.	DISPUTES
17.1	If any dispute arises out of or in connection with this Loan Agreement, directors or other senior representatives of the Parties with authority to settle the dispute will, within ten (10) days of a written request from one Party to the other, meet in a good faith effort to resolve the dispute.
17.2	All disputes arising out of or in connection with this Loan Agreement which are not resolved pursuant to Article 17.1, shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by three arbitrators appointed in accordance with the said Rules. The arbitration shall be conducted in English and the seat shall be Paris.
18.	EVENTS OF DEFAULT.
	The following events shall be considered events of default with respect to this Loan Agreement:

18.1.1	The Borrower shall default in the payment of any part of the principal or unpaid accrued interest on the Loan [for more than [thirty (30)] days] after the same shall become due and payable, whether at maturity or at a date fixed for prepayment or by acceleration or otherwise;
18.1.2	The Borrower is unable or admits its inability to pay its debts as they fall due, by reason of actual or anticipated financial difficulties or suspends making payments on any of its debts or commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness;
18.1.3	The Borrower is in a state of suspension of payments (cessation des paiements) within the meaning of article L. 631-1 of the French Commercial Code;
18.1.4	Any corporate action, legal proceedings or other procedures or steps are taken by reason of the Borrower’s financial difficulties, in relation to:

(A)	The suspension of payments, a moratorium of any indebtedness, winding-up, dissolution administration or reorganisation (other than a solvent winding-up, dissolution or reorganisation carried out with the prior written consent of the Lender, such consent not to be unreasonably withheld or delayed) of the Borrower;
(B)	A composition, compromise, assignment or arrangement with any creditor of the Borrower;

Page 10 of 12

7-December 2007

(C) The appointment of a liquidator, receiver, administrator, administrative receiver, compulsory manager or other similar officer in respect of the Borrower or any of its assets;

	Or any analogous procedure or step is taken in any jurisdiction.
18.1.5	The Borrower commences proceedings for conciliation in accordance with articles L. 611-4 to L. 611-15 of the French Commercial Code or any analogous procedure or step is taken in any jurisdiction;
18.1.6	A judgment for sauvegarde, redressement judiciaire or liquidation judiciaire is entered in relation to the Borrower under articles L. 620-1 to L. 644-6 of the French Commercial Code or any analogous judgment is entered in any jurisdiction;
18.1.7	The Borrower shall fail to observe or perform any other obligation to be observed or performed by it under this Loan Agreement within thirty (30) days after written notice from the Lender to perform or observe the obligation; and
18.1.8	The Borrower stops construction of the Works or acknowledges that it will be unable or is unwilling to complete construction of the works.

19. REMEDIES. Upon the occurrence of an event of default under Article 18.1 hereof, at the option and upon the declaration of the Lender, the entire unpaid principal and accrued and unpaid interest on the Loan shall without formal notice of default (mise en demeure) or any other judicial or extra-judicial step,, be forthwith due and payable, and the Lender may, immediately and without expiration of any period of grace, enforce payment of all amounts due and owing under this Loan Agreement and exercise any and all other remedies granted to it.

Page 11 of 12

7-December 2007

20.	EXPENSES. If any action is necessary to enforce or interpret the terms of this Loan Agreement, the prevailing Party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which such Party may be entitled.
21.	FURTHER ASSURANCE. From time to time, the Borrower shall execute and deliver to the Lender such additional documents and shall provide such additional information to the Lender as the Lender may reasonably require to carry out the terms of this Loan Agreement.
22.	INDEMNITY; COSTS, EXPENSES AND ATTORNEYS’ FEES.
22.1	Subject to Article 22.2 the Borrower shall indemnify and hold the Lender harmless from any reasonable loss, cost, liability and legal or other expense, including reasonable attorneys’ fees of the Lender’s counsel, which the Lender may directly or indirectly suffer or incur by reason of the failure of the Borrower to perform any of its obligations under this Loan Agreement or exercise of remedies (collectively, “Costs”), provided, however, the indemnity agreement contained in this Article shall not apply to liabilities which the Lender may directly or indirectly suffer or incur by reason of the Lender’s own negligence or misconduct.
22.2	Notwithstanding any other provision of this Agreement no Party shall be liable to the other Party for loss of profit, loss of any contract or for any other consequential loss or damage which may be suffered by the other Party in connection with this Agreement.

IN WITNESS whereof the Parties have executed this Loan Agreement on the date first mentioned above.

Executed in Cologne in 2 original copies.

	/s/ Frank Wouters
SIGNED by	Frank Wouters
for and on behalf of
SILICIUM DE PROVENCE S.A.S
	/s/ Richard G. Chleboski
SIGNED by	Richard G. Chleboski
for and on behalf of
EVERGREEN SOLAR, INC.

Page 12 of 12

EX-10.41

Exhibit 10.41

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been omitted pursuant to a request for confidential treatment and, where applicable, have been marked with an asterisk (“[****]”) to denote where omissions have been made. The confidential material has been filed separately with the Securities and Exchange Commission.

SUPPLY AGREEMENT

EVERGREEN SOLAR, INC.

and

DC CHEMICAL CO., LTD.

Dated as of January 30, 2008

Table of Contents

	Page
ARTICLE I SUPPLY OF PRODUCT		1
Section 1.1 Quantity and Price of Product		1
Section 1.2 Delivery Start Date; Monthly Quantity		1
Section 1.3 Quantity Variance		2
Section 1.4 Disposition of Product Sold		2
Section 1.5 Delivery Schedule		2
ARTICLE II PRICE ADJUSTMENT AND ADVANCE PAYMENT		3
Section 2.1 Price Adjustment		3
Section 2.2 Threshold		4
Section 2.3 Non-Refundable Advance Payment		4
Section 2.4 Refund of Advance Payment		4
ARTICLE III DELIVERY AND SHIPPING		5
Section 3.1 Delivery		5
ARTICLE IV PAYMENTS		5
Section 4.1 Payments		5
Section 4.2 Taxes		6
Section 4.3 Payment Terms in the Event of Non-Payment		6
ARTICLE V SPECIFICATIONS; INSPECTION OF PRODUCT; PLANT		6
Section 5.1 Specifications		6
Section 5.2 Inspection of Product		6
Section 5.3 Plant		6
ARTICLE VI CONFIDENTIAL INFORMATION		7
Section 6.1 Confidential Information		7
Section 6.2 Restrictions On Use and Disclosure		7
Section 6.3 Exclusions		7
Section 6.4 Compelled Disclosure		7
Section 6.5 Press Releases		8
Section 6.6 Confidentiality of Agreement		8
ARTICLE VII WARRANTIES; DISCLAIMER; REMEDIES		8
Section 7.1 Disclaimer of Warranties		8
Section 7.2 Title		8
Section 7.3 Damaged or Defective Product		8
Section 7.4 Failure to Purchase by Buyer		9
Section 7.5 Failure to Supply by DCC		9

 i 

Table of Contents
(continued)

	Page
Section 7.6 Limitation of Liability		9
Section 7.7 Indemnity		9
ARTICLE VIII TERM AND TERMINATION		10
Section 8.1 Term		10
Section 8.2 Termination		10
Section 8.3 Effect of Termination		11
ARTICLE IX MISCELLANEOUS		11
Section 9.1 Force Majeure		11
Section 9.2 Governmental Approvals		11
Section 9.3 Hierarchy among this Agreement and Purchase Orders		11
Section 9.4 Independent Contractors		12
Section 9.5 Notice		12
Section 9.6 Amendment; No Waiver		12
Section 9.7 Governing Law; Jurisdiction		12
Section 9.8 Entire Agreement		13
Section 9.9 Assignment		13
Section 9.10 Non-Exclusive Agreement		13
Section 9.11 Successors		14
Section 9.12 Headings		14
Section 9.13 Word Meanings		14
Section 9.14 Language		14
Section 9.15 Counterparts		14

 ii 

SUPPLY AGREEMENT

     THIS SUPPLY AGREEMENT (this “Agreement”) is entered into as of January 302008, (the “Effective Date”), by and between DC Chemical Co., Ltd., a corporation organized under the laws of Korea, having its registered office at Oriental Chemical Building, 50, Sogong-Dong, Jung-Gu, Seoul, 100-718, Korea (“DCC”), and Evergreen Solar, Inc., a company organized under the laws of Delaware, having its principal place of business at 138 Bartlett Street, Marlboro, Massachusetts 01752, U.S.A.(“Buyer”). Each of DCC and Buyer is referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS

     WHEREAS, DCC will build and operate a production facility (“Plant”) for the manufacture of poly-crystalline silicon made from the decomposition of chlorosilane in reactors (the “Product”);

     WHEREAS, Buyer manufactures poly-crystalline wafers for use in the production of solar modules; and

     WHEREAS, DCC desires to sell, and Buyer desires to purchase, Products pursuant to the terms and conditions of this Agreement.

     NOW, THEREFORE, the Parties agree as follows:

ARTICLE I

SUPPLY OF PRODUCT

     Section 1.1 Quantity and Price of Product. Subject to adjustments pursuant to Sections 1.2, 1.3 and Article II, DCC hereby agrees to sell and Deliver to Buyer, and Buyer hereby agrees to purchase and receive from DCC, the following quantities of Product for each of the periods (with respect to each calendar year, the quantity indicated below for such calendar year, the “Original Annual Quantity”) and at the respective prices (as may be adjusted pursuant to Sections 2.1 and 2.2) set forth below:

Calendar Year	Quantity	Price
2009	[****] kgs	US$[****]/kg
2010	[****] kgs	US$[****]/kg
2011	[****] kgs	US$[****]/kg
2012	[****] kgs	US$[****]/kg
2013	[****] kgs	US$[****]/kg
2014	[****] kgs	US$[****]/kg
2015	[****] kgs	US$[****]/kg
Total	[****] kgs	US$ [****]

     Section 1.2 Delivery Start Date; Monthly Quantity. Subject to adjustment in accordance with Section 1.3, for each calendar year set forth in Section 1.1, DCC shall sell and Deliver, and Buyer shall receive and purchase, the Original Annual Quantity (or, if the

1

Original Annual Quantity has been adjusted pursuant to Section 1.3 below, the Adjusted Annual Quantity (as defined below)) for such calendar year in accordance with the delivery schedule agreed to by the Parties pursuant to Section 1.5. The monthly quantities to be Delivered, before giving effect to any adjustments pursuant to Section 1.3, shall herein be referred to as “Original Monthly Quantity” or “Original Monthly Quantities,” as the context shall require.

     Section 1.3 Quantity Variance.

     (a) With respect to each Original Annual Quantity, DCC may, at its sole and absolute discretion, increase or decrease the amount of such Original Annual Quantity by an amount which is no greater than [****]% of such Original Annual Quantity by providing advanced written notice (the “Notice of Adjustment”) to Buyer. Any Original Annual Quantity which has been so adjusted shall become the “Adjusted Annual Quantity”. The Notice of Adjustment shall become effective on the date which is [****] months after the date of such Notice of Adjustment. Upon effectiveness of such Notice of Adjustment, that portion of the Adjusted Annual Quantity remaining to be Delivered as of such effective date shall be equitably adjusted by mutual agreement of the parties, provided however, in the absence of mutual agreement, that portion of the Adjusted Annual Quantity then remaining to be delivered shall be equally divided among the calendar months remaining in such calendar year. Any Original Monthly Quantity which has been so adjusted shall become the “Adjusted Monthly Quantity”.

     (b) If the actual quantity of Products Delivered is less than [****]% of the Original Monthly Quantity or Adjusted Monthly Quantity, as applicable, then remedial measures in respect of such deficiency shall be discussed between DCC and Buyer pursuant to which DCC and Buyer shall find an amicable solution to such deficiency, including rolling over the deficient quantity to one or more subsequent Deliveries. In no event shall such deficiency be deemed to be a default under this Agreement, provided however, DCC shall have exerted [****] efforts to Deliver the Original Monthly Quantity or Adjusted Monthly Quantity, as applicable.

     Section 1.4 Disposition of Product Sold. Buyer shall utilize the Product for the manufacturing purposes of itself and Buyer shall not re-sell the Product, or become a re-seller or distributor of the Product sold to Buyer under this Agreement.

     Section 1.5 Delivery Schedule. At least [****] days prior to the beginning of each calendar year, the Parties shall discuss and consult with each other as to timing and quantities of Original Monthly Quantities to be Delivered during such calendar year. Absent agreement by the Parties to the contrary, DCC shall Deliver to Buyer the applicable Original Annual Quantity over substantially equal batches during each month of such calendar year, pursuant to a monthly purchase order to be Delivered by Buyer to DCC at least [****] days prior to the beginning of such month, which purchase order shall specify the agreed Original Monthly Quantity to be Delivered in such month. The schedule for Deliveries of Adjusted Annual Quantities shall be determined in accordance with Section 1.3(a).

2

ARTICLE II

PRICE ADJUSTMENT AND ADVANCE PAYMENT

     Section 2.1 Price Adjustment. The price per kilogram of Product sold during any calendar year (the “Relevant Year”) shall be subject to adjustment in accordance with the following:

     If the absolute value of “(A – B)/B” is equal to or greater than “[****]%”, then the new price per kilogram of Product for the Relevant Year (the “Adjusted Price”) shall equal C.

     Where:

     A = [****];

     B = [****];

     C = [****];

     [****]

     For the avoidance of doubt, DCC shall calculate and determine whether the price for Products for a Relevant Year is required to be adjusted in accordance with this Section 2.1 promptly as practicable, and notify Buyer in writing of any adjustment to the price, if any. In the event that a determination has been made that an adjustment is required to be made to the price in respect of any Relevant Year, such adjustment shall apply to any Original Monthly Quantities or Adjusted Monthly Quantities, as applicable, remaining to be Delivered during such calendar year, but not to any Original Monthly Quantities or Adjusted Monthly Quantities, as applicable, already Delivered in respect of such calendar year nor to the Original Annual Quantity of any other calendar year.

     Section 2.2 Threshold. If the Adjusted Price for any of (i) the [****] or calendar years is less than [****]% or greater than [****]% or (ii) the [****] calendar years is less than [****]% or greater than [****]%, in each case, of the respective prices for such years set forth in the table in Section 1.1, then the actual amount of the adjustment to be applied to determine the Adjusted Price for such calendar year shall be discussed between DCC and Buyer pursuant to which DCC and Buyer shall agree on a mutually acceptable adjustment amount.

     Section 2.3 Advance Payment. Buyer agrees to make an interest free, and non-refundable (except as set forth in Section 2.4) advance payment to DCC (paid to an account designated by DCC) in the aggregate amount of US$36,540,000 (the “Advance Payment”), in accordance with the schedule set forth below:

Date	Amount
Within 1 month after contract date	US$10.962,000
Within 3 months after the 1st installment	US$[****]
December 1, 2008	US$[****]
Total	US$36,540,000

3

In respect of each payment from Buyer to DCC, Buyer shall be entitled to an Advance Payment Credit.

“Advance Payment Credit” in respect of any payment shall mean the number equal to the product of (i) the Pro Rata Percentage and (ii) the amount of such payment, to the extent that the Advance Payment Balance at the time of calculation is greater than such number, and if the Advance Payment Balance is less than such number, the amount of the Advance Payment Balance.

“Pro Rata Percentage” shall equal the fraction, the numerator of which is equal to the amount of the Advance Payment and the denominator of which is equal to the aggregate purchase price for all of the Original Annual Quantities set forth in Section 1.1.

“Advance Payment Balance” as of a certain time, shall mean a number which is equal to (i) the amount of the Advance Payment less (ii) the aggregate amount of all Advance Payment Credits prior to such time.

     Section 2.4 Refund of Advance Payment. Upon termination of this Agreement pursuant to [****] DCC shall refund to Buyer within [****] days of the effective date of such termination the Advance Payment Balance as of the date of such refund, less any amounts due and payable by Buyer to DCC which are outstanding as of the date of such refund.

ARTICLE III

DELIVERY AND SHIPPING

     Section 3.1 Delivery. The Product shall be delivered to Buyer [****] (Incoterms 2000); accordingly, the availability of an Original Monthly Quantity or Adjusted Monthly Quantity, as applicable, for receipt by Buyer at the Plant shall constitute “Delivery” for the purposes of this Agreement.

ARTICLE IV

PAYMENTS

     Section 4.1 Payments. Contemporaneously with each Delivery under this Agreement, DCC shall issue an invoice to Buyer for the Products being Delivered. Invoices will reflect the purchase price for the applicable delivery after having given effect to the adjustment to

4

such purchase price pursuant to Section 2.3 and may be sent by any normally reliable means, including electronically, facsimile, hand delivery or other methods. Buyer shall pay all amounts due under any invoice submitted by DCC within [****] days from the date of such Delivery. All payments made to DCC shall be made in cash by wire transfer to an account specified by DCC. All such payments shall be free and clear of all withholdings, taxes, set-off, encumbrances of any kind. Late payment interest of [****]%) per annum may be assessed by DCC on payment past due from the payment due date to the date payment is received.

     This Agreement is a [****] such that Buyer is [****]

     Section 4.2 Taxes. DCC shall be responsible for all sales, use, excise, value-added or other taxes, tariffs, duties or assessments, including interest and penalties, levied or imposed at any time by any governmental authority arising from or relating to the supply of Product. Buyer shall be responsible for all sales, use, excise, value-added or other taxes, tariffs, duties or assessments, including interest and penalties, levied or imposed at any time by any governmental authority arising from or relating to purchase or use of the Product.

     Section 4.3 Payment Terms in the Event of Non-Payment. In the event that Buyer does not pay for Product as required hereunder, in addition to DCC’s other remedies hereunder, including termination as permitted in Article VIII hereof, DCC shall be entitled, notwithstanding any other provisions in this Agreement to the contrary, to cease delivery of any further Product until any arrearages are cured, including applicable late payment charges, and/or require payment of all future orders and shipments [****]

ARTICLE V

SPECIFICATIONS; INSPECTION OF PRODUCT; PLANT

     Section 5.1 Specifications. All of the Product to be supplied by DCC shall meet the specifications set forth in Schedule 1, which may be amended from time to time upon mutual agreement (the “Specifications”).

     Section 5.2 Inspection of Product. Unless Buyer notifies DCC in writing within [****] days of Delivery that any Product does not conform to the Specification, such shipment shall be deemed to conform to the Specifications. If Buyer desires to submit a claim that any Product did not meet the Specifications at the time of Delivery, Buyer shall submit documentary evidence of any third party inspection at the time of Delivery as evidence of such claim, whereupon DCC shall have the right to undertake its own inspection, including, of samples of Products at the time of Delivery. Any disputes as to whether certain Products meet the Specification shall be settled in accordance with Section 9.7. Buyer’s failure to notify DCC within the time period set forth in the first sentence of this paragraph with respect to any Products Delivered shall irrevocably release DCC from any obligations or liabilities for defective Product, including but not limited to any warranties under Section 7.3, with regard to such Products (including for any latent defects, if any).

5

     Section 5.3. Plant. Until completion of the Plant, Buyer shall have the right to request periodic visits to the Plant while the Plant is being constructed and DCC and Buyer shall discuss in good faith the timing and frequency of such visits, it being agreed that such visits shall take place no sooner than one month from the date of such request, during normal business hours and not unreasonably disrupt the ordinary course of business and construction of the Plant

ARTICLE VI

CONFIDENTIAL INFORMATION

     Section 6.1 Confidential Information. Any information provided by one Party to the other Party which is confidential in nature shall be deemed confidential information (the “Confidential Information”).

     Section 6.2 Restrictions On Use and Disclosure. Once any Confidential Information is provided by one Party (the “Disclosing Party”) to the other Party (the “Receiving Party”), the Receiving Party shall, and shall cause its respective directors, officers, principals, members, employees, consultants, contractors, agents, advisors and representatives (collectively, “Representatives”) (i) not to deliver, divulge, disclose or communicate, or permit to be delivered, divulged, disclosed or communicated, to any third party, directly or indirectly, any Confidential Information, (ii) to disclose or give access to, or permit to be disclosed or given access to, any such Confidential Information, other than those of its Representatives that have a need to know such Confidential Information for the purposes of performing the Receiving Party’s obligations under this Agreement, (iii) to ensure that such Representatives keep the Confidential Information confidential, and (iv) to take all other reasonably necessary or advisable actions to preserve the confidentiality and security of the Confidential Information.

     Section 6.3 Exclusions. The foregoing restrictions contained in Section 6.2 shall not apply to Confidential Information that (i) is or becomes generally known to the public through no fault of the Receiving Party or its Representatives including without limitation any acts or omissions of the Receiving Party or its Representatives in violation of this Agreement, (ii) is disclosed to the Receiving Party without obligation of confidentiality by a third person who has a right to make such disclosure and the Receiving Party is able to document the independent source, (iii) was in the possession of the Receiving Party at or prior to the time of receipt from the Disclosing Party, as evidenced by contemporaneous, corroborated written records, without being subject to another obligation of confidentiality or (iv) is independently developed by the Receiving Party without reference to the Disclosing Party’s Confidential Information.

     Section 6.4 Compelled Disclosure. If the Receiving Party or its Representatives is required to disclose any Confidential Information otherwise than in accordance with this Agreement by government authority or pursuant to any applicable laws, regulations, or

6

judicial orders, the Receiving Party shall provide the Disclosing Party with prompt prior written notice of such request or requirement prior to disclosing the Confidential Information.

     Section 6.5 Press Releases. Except as permitted under this Article VI, neither Party shall issue any press release or make any public announcement which includes or otherwise uses the name of the other Party, or relates to this Agreement or to the performance hereunder in any public statement or document, without the prior review and written approval of the other Party, which approval shall not be unreasonably withheld or delayed. Any such review shall be completed as soon as practicable, but in any event within five (5) days of receipt of the proposed statement or document. Notwithstanding the foregoing, the Parties shall endeavor in good faith to agree upon and issue a joint press release announcing the relationship between the parties promptly after the date hereof.

     Section 6.6 Confidentiality of Agreement. The terms and conditions of this Agreement, shall be treated as Confidential Information and shall not be disclosed by either Party to any third party, except (i) with the Party’s consent, which consent shall not be unreasonably withheld or delayed, (ii) as may be required by law or regulation or rules of a nationally recognized stock exchange, (iii) to legal counsel, accountants, investors, lenders and financial advisors, (iv) in connection with any action or claim to enforce its rights hereunder or in any related transaction and (v) as reasonably required in connection with a bona fide financing or sale transaction in which all or substantially all of a Party’s business, assets or equity capital is proposed to be sold.

ARTICLE VII

WARRANTIES; DISCLAIMER; REMEDIES

     Section 7.1 Disclaimer of Warranties. EXCEPT AS SET FORTH IN THIS ARTICLE VII, DCC DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT AND THOSE ARISING FROM A COURSE OF DEALING OR USAGE OF TRADE.

     Section 7.2 Title. DCC warrants that it has good title to the Products sold to Buyer hereunder and the right to sell them to Buyer free of any security interest, lien or any other encumbrance whatsoever.

     Section 7.3 Damaged or Defective Product. DCC warrants that the Products Delivered shall conform to the Specifications. In the event of Delivery of defective Products, upon notice by Buyer to DCC pursuant to Section 5.2 above, DCC and Buyer shall discuss the appropriate method of curing such defect, pursuant to which DCC and Buyer shall find an amicable solution to such damage or defect, provided however, in the absence of agreement to the contrary, Buyer agrees [****]

7

provided however, DCC shall first allocate Products to Buyer under option (i) above in a manner so that Buyer is treated no less favorably than if DCC had allocated all available Products to all of its customers on a pro rata and equitable basis after also taking into account DCC’s existing contractual obligations to its customers.

     Section 7.4 Failure to Purchase by Buyer. If Buyer fails to take Delivery of or purchase [****] the Original Annual Quantity or Adjusted Annual Quantity, as applicable, for any calendar year for any reason whatsoever, DCC shall be entitled to the remedies set forth in Section 4.1, provided that failure by Buyer to purchase [****] such Original Annual Quantity or Adjusted Annual Quantity, as applicable, made available for Delivery shall not constitute a breach of this Agreement if DCC shall have received [****] in respect of such applicable Original Annual Quantity or Adjusted Annual Quantity, as applicable, in accordance with the [****] applicable for such Original Annual Quantity or Adjusted Annual Quantity, as applicable.

     Section 7.5 Failure to Supply by DCC. If DCC is unable, after exerting commercially reasonable efforts, to sell or Deliver all or any portion of the first [****] kilograms of the aggregate amount of the Original Annual Quantities set forth in Section 1.1 (after giving effect to Section adjustment pursuant to Section 1.3), Buyer’s sole remedy pursuant to this Agreement shall be to terminate this Agreement.

     Section 7.6 Limitation of Liability. BUYER’S REMEDIES IN RESPECT OF ANY CLAIM RELATING TO DEFECTIVE PRODUCTS SHALL BE LIMITED BY AND SUBJECT TO SECTION 7.3. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS, LOSS OF PROFITS, OR FOR ANY INDIRECT, SPECIAL, CONSEQUENTIAL, INCIDENTAL, EXEMPLARY OR PUNITIVE DAMAGES, WHETHER ARISING OUT OF CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE RESULTING FROM OR RELATED TO THIS AGREEMENT (WHETHER OR NOT SUCH PARTY KNEW OR SHOULD HAVE KNOWN OF THE POSSIBILITY OF ANY SUCH DAMAGES).

     Section 7.7 Indemnity. A Party, (the “Indemnitor”) shall indemnify, defend and hold the other Party and its officers, directors, employees, consultants, agents and other representatives (the “Indemnitees”) harmless from and against any and all liability, damage, loss, cost or expense (including reasonable attorneys’ fees) arising out of third party claims or lawsuits (a “Claim”) related to or arising out of the Indemnitor’s breach of any of its covenants, representations or warranties set forth in this Agreement. Upon the assertion of any such claim or suit, the Indemnitees shall promptly notify the Indemnitor and the Indemnitor shall appoint counsel reasonably acceptable to the affected Indemnitees to represent such Indemnitees with respect to any claim or suit for which indemnification is sought. The Indemnitees may select their own respective counsel, at the Indemnitor’s cost, upon notice to the Indemnitor; provided, however, that they shall not settle any claim or suit hereunder without the prior written consent of the Indemnitor.

8

ARTICLE VIII

TERM AND TERMINATION

     Section 8.1 Term. This Agreement shall commence upon the Effective Date and shall remain in full force until December 31, 2015, unless earlier terminated pursuant to Section 8.2 below.

     Section 8.2 Termination.

     (a) Mutual Agreement. This Agreement may be terminated at any time upon mutual agreement of the Parties.

     (b) Termination For Breach. Except as otherwise set forth herein, the failure by a Party to comply in any material respect with any of the obligations contained in this Agreement shall entitle the other Party to give notice to have the default cured. If such default is material and not cured within sixty (60) days after the receipt of such notice, or diligent steps have not begun to be taken to cure such default within thirty (30) days or if by its nature such default is not capable of being cured, the other Party shall be entitled to immediately terminate this Agreement.

     (c) Bankruptcy/Insolvency. If a Party (or its creditors or any other eligible party) files for its liquidation, bankruptcy, reorganization, composition, dissolution or other similar proceedings or arrangement, or if such Party is unable to pay any debts as they become due, has explicitly or implicitly suspended payment of any debts as they became due (except debts contested in good faith), or if the creditors of the such Party have taken over its management, or if the relevant financial institutions have suspended clearing house privileges with regard to such Party, then the other Party shall be entitled to immediately terminate this Agreement.

     (d) No Plant. DCC may terminate this Agreement if it reasonably believes, despite having exerted commercially reasonable efforts, that it will not be able to Deliver the first [****] kilograms of the aggregate amount of the Original Annual Quantities in Section 1.1 to Buyer. (after giving effect to Section adjustment pursuant to Section 1.3). In the event of a termination of the Agreement by DCC under this Section 8.2(d) or Buyer pursuant to Section 7.5, DCC’s obligations to sell and Deliver, and Buyer’s obligation to purchase and receive, Products and Original Annual Quantities or Adjusted Annual Quantities, as applicable, for all calendar years not Delivered prior to such termination shall be deemed to be discharged in full without recourse and with prejudice.

     (e) [****]. If at any time, Buyer (together with any of its affiliates) [****] Buyer shall provide immediate written notice to DCC and DCC may, at its sole discretion, terminate this Agreement with immediate effect. In the event of termination by this Agreement by DCC under this Section 8.2(e), DCC’s obligations

9

to sell and Deliver, and Buyer’s obligation to purchase and receive, Products and Original Annual Quantities or Adjusted Annual Quantities, as applicable, for all calendar years not Delivered prior to such termination shall be deemed to be discharged in full without recourse.

     Section 8.3 Effect of Termination. Except as specifically set forth in Section 8.2(d), the expiration or termination of this Agreement shall not relieve the Parties of any obligations accruing prior to such termination, and any such termination shall be without prejudice to the rights of either Party against the other conferred on it by this Agreement. In addition, the provisions of Article VI, VII, VIII and IX shall survive expiration or termination of this Agreement for any reason for as long as necessary to permit their full discharge.

ARTICLE IX

MISCELLANEOUS

     Section 9.1 Force Majeure. Neither Party shall be responsible for suspension of its performance under this Agreement (other than the obligation of payment) if such suspension is caused by a shortage of raw materials, fire, flood, epidemics, quarantine restrictions, strikes, lockouts or other labor disputes, freight embargoes, severe weather, riots, terrorism, acts of war, acts of God or the public enemy or compliance with applicable laws, rules or regulations of any governmental authority or by compliance with any order or decisions of any court, board or other governmental authority or by any cause beyond the reasonable control of such Party, whose effects are not capable of being overcome without commercially unreasonable expense to such Party (“Force Majeure”); provided, however, that this Section 9.1 shall not relieve a Party of its obligation to pay for any Product or other payment required by this Agreement. In addition, if due to Force Majeure, DCC is unable to produce sufficient Products to meet all demands from customers, DCC shall (a) inform Buyer of such reduction in production of Product; (b) undertake commercially reasonable efforts to overcome such situation; and (c) have the right to allocate production among its customers in a manner no less favorable to Buyer if DCC had allocated production among its customers on a pro rata and equitable basis, after consulting with Buyer. Buyer shall have no obligation to pay for Products not Delivered to Buyer if such failure to Deliver is due to DCC claiming the occurrence of a Force Majeure. If DCC is unable to meet its obligations hereunder due to a Force Majeure for more than 180 consecutive days, Buyer shall have the right to terminate this Agreement with written notice to DCC.

     Section 9.2 Governmental Approvals. DCC shall obtain all necessary Korean governmental approvals required for the export of the Products to Buyer. Buyer shall obtain all other government approvals for the import of Products by Buyer.

     Section 9.3 Hierarchy among this Agreement and Purchase Orders. If there is a conflict between or among the terms of this Agreement, its Schedules or a Purchase Order, the following order of precedence shall apply: this Agreement, Schedules, and the Purchase Order; provided, however, a specific written agreement to amend this Agreement (which contains a specific reference to Section 9.6 of this Agreement) signed by the Parties that

10

expresses the intent of the Parties to modify this Agreement shall take precedence over this Agreement.

     Section 9.4 Independent Contractors. The Parties hereto are independent contractors. Neither Party to this Agreement nor any of its employees, customers or agents, shall be deemed to be the representative, agent or employee of the other Party for any purpose whatsoever, nor shall any of them have the right or authority to assume or create an obligation of any kind or nature, express or implied, on behalf of the other, nor to accept service of any legal claims or notices addressed to or intended for the other.

     Section 9.5 Notice. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing, shall be deemed to have been duly given when received and may be sent by personal delivery, facsimile (to the respective facsimile number set forth below or last given by each Party to the other) or sent by express courier (prepaid and addressed to the respective addresses set forth below or last given by each Party to the other). The Parties’ respective initial addresses for purposes of receiving notices pursuant to this Agreement shall be as follows:

If to DCC:	If to Buyer:
DC Chemical Co., Ltd.	Evergreen Solar, Inc.
Oriental Chemical Building	138 Bartlett Street
50, Sogong-Dong, Jung-Gu	Marlboro, MA 01752
Seoul, 100-718	U.S.A.
Korea	Attn: Richarf G. Chleboski
Attn: Andy Kim	Fax: +1-508-229-7722
Fax: +82-2-727-9559

     Section 9.6 Amendment; No Waiver. This Agreement cannot be amended, changed, modified or supplemented orally, and no amendment, change, modification or supplement of this Agreement shall be recognized nor have any effect, unless the writing in which it is set forth is signed by both Parties, nor shall any waiver of any of the provisions of this Agreement be effective unless in writing and signed by the Party to be charged therewith. The failure of either Party to enforce, at any time, or for any period of time, any provision hereof or the failure of either Party to exercise any option herein shall not be construed as a waiver of such provision or option and shall in no way affect that Party’s right to enforce such provision or exercise such option. No waiver of any provision hereof shall be deemed to be, or shall constitute, a waiver of any other provision, or with respect to any succeeding breach of the same provision.

     Section 9.7 Governing Law; Jurisdiction.

     (a) This Agreement shall be governed by and construed and enforced in accordance with the laws of Korea, without giving effect to the rules respecting its

11

conflicts of law principles. The United Nations Convention on Contracts for the International Sale of Goods shall not apply.

     (b) The Parties hereby agree that any dispute arising under this Agreement, or in connection with any breach thereof, shall be finally resolved through binding arbitration conducted in administered by the ICC (as defined below) accordance with the rules and procedures of the International Chamber of Commerce (“ICC”) by one (1) arbitrator appointed in accordance with the applicable rules of the ICC. Any such arbitration shall be held in Hong Kong. Any written evidence originally in a language other than English shall be submitted in English translation accompanied by the original or a true copy thereof. The costs of the arbitration, including administrative and arbitrators’ fees, shall be shared equally by the Parties, and each Party shall bear its own costs and attorneys’ and witness’ fees incurred in connection with the arbitration. Any award may be entered in a court of competent jurisdiction for a judicial recognition of the decision and applicable orders of enforcement. The Parties may apply to any court of competent jurisdiction for a temporary restraining order, preliminary injunction, or other interim or conservatory relief, as necessary, without breach of this arbitration requirement and without any abridgment of the powers of the arbitrator.

     (c) If any portion of this Agreement is held invalid by a court or tribunal of competent jurisdiction, such portion shall be deemed to be of no force and effect and this Agreement shall be construed as if such portion had not been included herein, provided however, if the deletion of such provision materially impairs the commercial value of this Agreement to either Party, the parties shall attempt to renegotiate such provision in good faith.

     Section 9.8 Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior agreements, understandings and arrangements, oral or written, between the Parties with respect to the subject matter hereof. No agreement or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made either Party which is not expressly set forth in this Agreement.

     Section 9.9 Assignment. Either Party may assign or otherwise transfer this Agreement to its subsidiary, affiliate or other successor in the event of a merger, acquisition or change of control of such Party or to the purchaser of substantially all of the assets of such Party. Except as provided in the preceding sentence, neither Party shall have the right to assign or otherwise transfer this Agreement, or any of its rights or obligations hereunder, without the prior written consent of the other Party.

     Section 9.10 Non-Exclusive Agreement. This Agreement is a non-exclusive agreement. DCC expressly reserves the right to contract with others to supply any of its products or services. Buyer expressly reserves the right to contract with others for any of the products or services it may require.

12

     Section 9.11 Successors. This Agreement shall inure to the benefit of and be binding upon each of the Parties and their respective permitted successors and assigns.

     Section 9.12 Headings. The headings used in this Agreement are for convenience of reference only and shall not affect the meaning or construction of this Agreement.

     Section 9.13 Word Meanings. Words such as herein, hereinafter, hereof and hereunder refer to this Agreement as a whole and not merely to a section or paragraph in which such words appear, unless the context otherwise requires. The singular shall include the plural, and each masculine, feminine and neuter references shall include and refer also to the others, unless the context otherwise requires.

     Section 9.14 Language. The official language of this Agreement is English. All contract interpretations, notices and dispute resolutions shall be in English. Any attachments or amendments to this Agreement shall be in English. Translations of any of these documents shall not be construed as official or original versions of such documents.

     Section 9.15 Counterparts. This Agreement may be executed in counterparts or duplicate originals, both of which shall be regarded as one and the same instrument, and which shall be the official and governing version in the interpretation of this Agreement.

[Signature pages follow]

13

     IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their respective duly authorized officers as of the Effective Date.

DC Chemical Co., Ltd.
By:	/s/ Woo Sug Baik
Name:		Woo Sug Baik
Title:		Chief Executive Officer

[Signature page to Supply Agreement]

Evergreen Solar, Inc.
By:	/s/ Richard C. Chleboski
Name:		Richard G. Chlebosk
Title:		Vice President

[Signature page to Supply Agreement]

Schedule 1

Specifications

TO BE DETERMINED BY MUTUAL AGREEMENT BASED ON TESTS CONDUCTED AT THE PLANT UPON MANUFACTURE OF PRODUCT THEREIN

PRODUCT SHALL BE OF SOLAR GRADE

UNLESS OTHERWISE AGREED, THE PRODUCT SHALL BE SHIPPED TO BUYER IN [****]

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8( 333-53374, 333-105963 and 333-127025) and Form S-3 (333-106126, 333-117264, 333-119864, 333-128074, 333-138748, 333-143023 and 333-149030) of Evergreen Solar, Inc. of our report dated February 27, 2008 relating to the financial statements, financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, MA
February 27, 2008

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (333-53374, 333-105963 and 333-127025) and S-3 (333-106126, 333-117264, 333-119864, 333-128074, 333-138748, 333-143023 and 333-149030) of Evergreen Solar, Inc. of our report dated February 27, 2007 relating to the financial statements of EverQ GmbH, which appears in the Annual Report on Form 10-K for the year ended December 31, 2007.

/s/ PricewaterhouseCoopers AG
PricewaterhouseCoopers AG

Leipzig, Germany
February 26, 2008

EX-31.1

EXHIBIT 31.1

SECTION 302 CERTIFICATION

I, Richard M. Feldt, certify that:

1. I have reviewed this Annual Report on Form 10-K of Evergreen Solar, Inc;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/  Richard M. Feldt  Richard M. Feldt

Chief Executive Officer

February 27, 2008

EX-31.2

EXHIBIT 31.2

SECTION 302 CERTIFICATION

I, Michael El-Hillow, certify that:

1. I have reviewed this Annual Report on Form 10-K of Evergreen Solar, Inc;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/  Michael El-Hillow  Michael El-Hillow

Chief Financial Officer

February 27, 2008

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Evergreen Solar, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard M. Feldt, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/  Richard M. Feldt     Richard M. Feldt

Chief Executive Officer

February 27, 2008

This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Evergreen Solar, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael El-Hillow, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/  Michael El-Hillow      Michael El-Hillow

Chief Financial Officer

February 27, 2008

This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-99.1

EXHIBIT 99.1

EverQ GmbH, Thalheim

German GAAP Balance Sheet as of December 31, 2006

Assets

	December 31,
	2006
	€
A. Fixed assets
I. Intangible assets
1. Software		285,382.40
2. Prepayments		362,899.57
		648,281.97
II. Property, Plant and Equipment
1. Land and buildings		15,200,429.79
2. Technical equipment and machinery		44,030,694.51
3. Other plant, factory and office equipment		1,419,818.78
4. Assets under construction and prepayments		42,854,549.89
		103,505,492.97
		104,153,774.94
B. Current assets
I. Inventories
1. Raw materials and supplies		7,119,988.13
2. Unfinished goods		2,383,743.81
3. Finished goods		519,901.27
		10,023,633.21
II. Receivables and other assets
1. Trade receivables		180,041.95
2. Receivables due from shareholders		14,263,872.65
3. Other assets		25,691,311.13
		40,135,225.73
III. Cash on banks		44,503,228.48
		94,662,087.42
C. Prepaid expenses		161,201.86
		198,977,064.22

Equity and liabilities

	December 31,
	2006
	€
A. Equity
I. Subscribed capital		480,000.00
II. Additional paid in capital		71,057,768.05
III. Accumulated losses brought forward		-6,259,611.88
IV. Net income		1,190,337.21
		66,468,493.38
B. Special line item for investment subsidies
1. Special line item for federal investment grants		18,230,674.39
2. Special line item for state investment grants		18,030,605.74
		36,261,280.13
B. Accruals
Other accruals		6,728,951.27
C. Liabilities
1. Liabilities to banks     (thereof due up to one year     €2,000,000.00)		7,000,000.00
2. Trade payables     (thereof due up to one year     €6,147,102.30)		6,147,102.30
3. Liabilities due to shareholders     (thereof due up to one year     €66,898,228.82)		75,898,228.82
4. Other liabilities     (thereof due up to one year     €473,008.32)     (thereof tax liabilities €449,990.25)     (thereof liabilities regarding social security     €21,349.95)		473,008.32
		89,518,339.44
		198,977,064.22

EX-99.2

EXHIBIT 99.2

EverQ GmbH, Thalheim

German GAAP Income Statement
for the period from December 20, 2006 to December 31, 2006

	December 20 to
	December 31,
	2006
	€
1. Revenues		3,676,877.80
2. Inventory change in unfinished and finished goods		-288,881.97
3. Capitalized own work		1,928.40
4. Other operating income		170,874.75
5. Expenditure for materials
a) Expenditure for raw materials, consumables and supplies		1,332,487.34
b) Expenditure for purchased services		184,749.62
		1,517,236.96
6. Payroll expenses
a) Salaries and wages		351,341.85
b) Social security		67,805.77
		419,147.62
7. Depreciation and amortization of intangible fixed assets and property, plant and equipment		231,764.35
8. Other operating expenses		172,391.04
9. Other interest and similiar income		85,962.64
10. Interest and similiar expenses		115,884.44
(thereof due to shareholder € 81,156.47)
11. Net income		1,190,337.21

EX-99.3

EXHIBIT 99.3

EverQ GmbH, Thalheim

Cash Flow Statement
for the period from December 20, 2006 to December 31, 2006

	December 20 to
	December 31,
	2006
	€
Net Income		1,190,337.21
Depreciation and amortization		231,764.35
Reversal of grants		-164,433.68
Decrease in accrued expenses		-2,704,763.70
Increase in inventories, receivables and other assets		-3,671,515.34
Increase in other current liabilities		1,153,753.24
Net cash used by operating activities		-3,964,857.92
Acquisition of fixed assets		-2,951,396.84
Net cash used by investing activities		-2,951,396.84
Repayments of long-term liabilities to banks		-500,000.00
Repayments of short-term liabilities to banks		-6,800,000.00
Net cash used by financing activities		-7,300,000.00
Net reduction in cash		-14,216,254.76
Cash at the beginning of period		58,719,483.24
Cash at the end of period		44,503,228.48

EX-99.4

 1

EXHIBIT 99.4

EverQ GmbH, Thalheim

Notes to the financial statements (Balance Sheet, Income Statement, Cash Flow Statement, Statement of Changes in Equity) for the period from December 20, 2006 to December 31, 2006

1 Organization and industry

EverQ GmbH (the “Company” or “EverQ”) is a producer that focuses on production of solar modules based on Evergreen Solar’s String-Ribbon™ technology. The Company’s operations are located in Thalheim, Germany. The production of the Company started in the second quarter 2006 and will be further extended in 2007.

The shareholders of EverQ are Evergreen Solar Inc., USA (“Evergreen”), Renewable Energy Corporation ASA, Norway (“REC”), and Q-Cells AG, Germany (“Q-Cells”). The share ownership was as follows:

	Up to Dec. 19, 2006			from Dec. 20, 2006
Evergreen		64	%		33.33	%
Q-Cells		21	%		33.33	%
REC		15	%		33.33	%

Due to that change the subscribed capital was increased by k€ 230 to k€ 480. Furthermore, the additional paid in capital was increased by k€ 41,308 to k€ 71,058.

The Company is included in the consolidated annual financial statements of the shareholders (Q-Cells; Evergreen: At Equity; REC: proportional).

2 Accounting principles

These financial statements represent financial information prepared in the context of the contemplated capital increase and the related decrease in ownership by the SEC registrant Evergreen as described above. The financial statements of EverQ GmbH, Thalheim, as of December 31, 2006 and for the period from December 20, 2006 to December 31, 2006 have been prepared on a basis consistent with accounting standards of the German Commercial Code (HGB) and the Law on Limited Liability Companies (GmbHG). The financial statements do not constitute annual statutory financial statements of EverQ GmbH, Thalheim (Germany), pursuant to German commercial law. Hence, these financial statements do not present the results of the Company’s operations and its cash flows for the Company’s fiscal year and do not include comparative financial information.

2

The presentation of the financial statements is in accordance with the general classification principles of § 265 HGB and the classification requirements for the balance sheet in accordance with § 266 (2) and (3) HGB.

The income statement has been prepared according to the total cost approach (“Gesamtkostenverfahren”) in accordance with § 275 (2) HGB.

The Company is a large company in terms of § 267 (3) HGB. In 2006, EverQ exceeds the criteria for large companies pursuant to § 267 (3) HGB for the first time. Since these criteria are not exceeded on December 31, 2006 for two consecutive financial years, the legal consequences for large companies pursuant to § 267 (3) do not become effective. Therefore, EverQ makes use of the size-related relief for the disclosures of small companies pursuant to § 288 HGB.

The financial statements are prepared in euro (“€”), information in the notes are rounded to the nearest thousand.

2 Accounting and valuation methods

The financial statements have been prepared taking into account the generally accepted valuation principles as stipulated under §§ 252 to 256 HGB and the special valuation principles for corporations (§§ 269 to 274, 279 to 283 HGB).

Intangible assets have been capitalized at acquisition costs less amortization, which has been calculated using the straight-line method.

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. The cost of self-constructed assets includes the cost of materials, direct labor costs and an appropriate proportion of overheads. Depreciation starts at the beginning of the month when the asset is ready for its intended use. It is accounted for as an expense on a straight-line basis to the estimated residual value of property, plant and equipment.

Borrowing costs on loans used to finance the construction of property, plant and equipment are capitalized as part of the cost of the asset until such time that the asset is ready for its intended use.

Maintenance and repair costs are recognized as expenses in the period in which they are incurred.

Government grants to EverQ for the acquisition of property, plant and equipment are accounted for as deferred income (“special items for investment subsidies”). The grants are released to income on a straight-line basis over the expected useful life of the related assets.

3

Raw materials and supplies are stated at acquisition or production costs. Hereby, the Company is using standard costs which include direct costs and directly related factory overhead (in particular material, payroll, depreciation) based on normal utilization. The standard costs are updated as necessary. The lower of cost and market principle has been observed.

Other assets and cash on banks are stated at nominal value. Receivables are reviewed for impairment when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of receivables.

Accruals are recorded whenever a present obligation (legal or constructive) exists as a result of a past event, in the amounts they are expected to be used. Liabilities are stated at the amounts outstanding at year-end.

Short-term receivables and short-term liabilities denominated in foreign currencies are converted in euro using the foreign exchange rate as of balance sheet date.

3 Notes to the balance sheet

The analysis of the different fixed asset categories is presented as annex to the notes. The balance sheet line A.II.4 Assets under construction and prepayments comprise of prepayments of k€ 14,494 and assets under construction of k€ 28,361.

Receivables due from shareholders are related to trade activities (k€ 14,008) or are other assets (k€ 255).

Other assets primarily result from receivables of investment grants of k€ 23,723 (investment incentives and subsidies) as well as VAT claims of k€ 1,796 and are short-term.

The special line item for investment subsidies and incentives relates to investment grants that have been granted by the government. The special line item is released depending on the depreciation pattern of the subsidized assets.

Accruals mainly refer to the accrual for invoices outstanding (k€ 5,028) and a warranty accrual (k€ 557). The accrual for warranty expenses amounts to 1.25% of realized revenues. The accrual for outstanding invoices includes invoices for the period up to December 31, 2006 received but not yet approved.

4

The maturity of the liabilities is as follows:

Liabilities	= < 1 year		> 1 year =		Total
			< 5 years
	k€		k€		k€
to banks		2,000		5,000		7,000
trade payables		6,147		0		6,147
to shareholders		66,898		9,000		75,898
others		473		0		473
		75,518		14,000		89,518

The bank loans were secured by liens or similar rights. Collateral was given in connection with the receivables of investment grants, equipment and machinery, cash on banks and a mortgage of k€ 22,500.

The liabilities due to shareholders refer to trade activities (k€ 5,577) and to loans including related interests (k€ 70,321).

The Company’s assets were given as subordinated collateral for one loan granted by a shareholder (k€ 8,000).

The loans granted by the shareholders were restructured by long-term shareholder loans at the end of January 2007.

4 Other financial obligations

The Company has incurred financial obligations of:

	= < 1 year		> 1 year =		> 5 years		Total
			< 5 years
	k€		k€		k€		k€
Long-term material purchases		96,065		148,731		123,666		368,462
Short-term purchases of raw materials		21,834		0		0		21.834
Fixed assets		66,674		0		0		66.674
Services		79		33		0		112
Rental and leasing agreements		16		16		0		32
		184,668		148,780		123,666		457,114
thereof due to shareholders								346,628

Obligations from long-term material purchases relate to a long-term contract for purchases of silicon from the REC Group in the years 2007 to 2014 at an amount of k€ 346,628. The contract requires a one time payment of k€ 66,923 ($ 87 Mio.) which will be due in April 2007.

5

5 Sundry information

Employees

The Company has had on average 466 employees.

Managing Directors

Rainer Mohr, CFO, accountant
Gottfried Marhan, COO, engineer

Supervisory Board

Richard Feldt	engineer	CEO, Evergreen
Eric Sauer	engineer	CTO, REC
Anton Milner	engineer	CEO, Q-Cells

6

6 U.S. GAAP Reconciliation

The financial statements of the Company have been prepared in accordance with German GAAP. German GAAP vary in certain significant respects from accounting principles generally accepted in the United States of America (“U.S. GAAP”). The reconciliations of the reported net income prepared under German GAAP to the net income prepared under U.S. GAAP for the period from December 20, 2006 to December 31, 2006 and the reconciliation of the equity prepared under German GAAP to the equity prepared under U.S. GAAP at December 31, 2006, are presented below.

Reconciliation of net income in accordance with German GAAP to net income in accordance with U.S. GAAP

			k€
Net income in accordance with German GAAP				1,190
Reconciling entries	Note
Increase in depreciation due to reversal of impairment loss on property, plant and equipment		N 1		-113
Government grants related to the impaired assets		N 2		51
Net income in accordance with U.S. GAAP				1,128

Reconciliation of equity in accordance with German GAAP to equity in accordance with U.S. GAAP

			k€
Equity in accordance with German GAAP				66,468
Reconciling entries	Note
Reversal of impairment loss on property, plant and equipment		N 1		680
Government grants related to the impaired assets		N 2		-303
Deferred bank charges		N 3		46
Equity in accordance with U.S. GAAP				66,891

7

Note N 1 — Reversal of impairment loss on property, plant and equipment

German GAAP treatment

In December 2006, the decision was made to replace certain machinery with a carrying value as of November 25, 2006 of k€ 1,020 at the end of February 2007. The original estimated useful life for these assets was 7 years. These assets were written off to the net realizable value for German GAAP purposes as impairment tests have to be prepared under German GAAP in this situation for the single asset.

U.S. GAAP treatment

Under U.S. GAAP, SFAS 144 requires for purposes of recognition and measurement of an impairment loss, a long-lived asset or assets shall be grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. As there was no impairment loss was identified on this level, the carrying amount of the assets is to allocate over their estimated remaining useful life of three month. The change represents a change in accounting estimate in accordance with SFAS 151.

Reconciling effect

As a result of the different treatment between German GAAP and U.S. GAAP, EverQ increased the carrying value of property, plant and equipment (A.II.2. Technical equipment and machinery) by k€ 680 as of December 31, 2006 and increased depreciation by k€ 113 for the period from December 20, 2006 to December 31, 2006.

Note N 2 — Government grants related to the impaired assets

German GAAP treatment

Under German GAAP, the assets referred to in Note N 1 are subsidized with government grants in an amount equal to 45% of the respective acquisition costs. The grants are accounted for as deferred income and released to income over the estimated useful life of the subsidized assets. Corresponding to the impairment loss recorded on assets described in Note N 1 the related amount of government grants was realized immediately as other operating income.

U.S. GAAP treatment

Under U.S. GAAP, the government grants that are received based solely on a capital expenditure should be credited to income over the expected useful life of the asset for which the grant was received.

8

Reconciling effect

As a result of the different treatment between German GAAP and U.S. GAAP, EverQ increased the deferred income (B. Special line item for investment subsidies) by k€ 303 as of December 31, 2006 and increased other operating income by k€ 51 for the period from December 20, 2006 to December 31, 2006.

Note N 3 — Deferred bank charges

German GAAP treatment

Under German GAAP, bank charges are expensed as incurred.

U.S. GAAP treatment

Under U.S. GAAP, bank charges are deferred and released over the term of the related loan.

Reconciling effect

As a result of the different treatment between German GAAP and U.S. GAAP, EverQ increased the deferred expense (B.II.3 Other assets) by k€ 46 as of December 31, 2006.

Deferred taxes

The Company has tax loss carry forwards available of k€ 3,887 as of December 31, 2006. These tax loss carry forwards result in a deferred tax asset of k€ 1,283 considering an applicable tax rate of 33%.

As the government grants are partially granted tax free, there is a tax benefit. As of the balance sheet date, the deferred tax asset related to it amounts to k€ 8,979.

As a result of different accounting treatments, the Company has taxable temporary differences for:

I.	Reversal of impairment loss on property, plant and equipment (see N 1 above) of k€ 680,
II.	Government grants related to the impaired assets (see N 2 above) of k€ -303, and
III.	Deferred bank charges (see N 3 above) of k€ 46.

The respective tax basis for the items is zero as of December 31, 2006, resulting in a deferred tax liability of k€ 140.

9

Since the Company has no history of gains, an allowance of 100% of the net deferred tax asset of k€ 10,123 was recorded. The Company did not record any deferred taxes for German GAAP purposes as of December 31, 2006.

U.S. GAAP accounting pronouncements issued but yet not adopted

FAS 157, Fair Value Measurements, defines fair value, establishes a framework for measuring fair value and expands the required disclosures of fair value measurements. This statement does not require a new fair value measurement, but emphasizes that fair value is a market-based measurement, not an entity specific measurement. The expended disclosure requirements will apply to interim and annual periods subsequent to initial recognition and focus on inputs used to measure fair value. FAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those years. Management does not believe the adoption of FAS 157 will have a material impact on the Company’s financial position or results of operations.

FIN 48, Accounting for Uncertainty in Income Taxes, clarifies the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. Provides guidance on de-recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. Management is currently assessing the impact that the adoption of FIN 48 will have on the Company’s financial position or results of operations.

Thalheim, February 9, 2007

EverQ GmbH

The Managing Directors:

Rainer Mohr Gottfried Marhan

EX-99.5

                                                                    Exhibit 99.5

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the board of directors
of EverQ GmbH, Thalheim (Germany)

We have audited the accompanying balance sheet of EverQ GmbH, Thalheim
(Germany), as of December 31, 2006, and the related income statement, statement
of changes in equity and cash flow statement for the period from December 20 to
December 31, 2006, as well as the notes to these financial statements. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provide a reasonable
basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of EverQ GmbH, Thalheim (Germany),
at December 31, 2006, and the results of its operations and its cash flows for
the period from December 20 to December 31, 2006, in conformity with accounting
principles generally accepted in Germany.

Accounting principles generally accepted in Germany vary in certain significant
respects from accounting principles generally accepted in the United States of
America. Information relating to the nature and effect of such differences is
presented in Note 6 to the financial statements.

As discussed in the notes, the financial statements referred to above do not
constitute annual statutory financial statements of EverQ GmbH, Thalheim
(Germany), pursuant to German commercial law. Hence, these financial statements
do not present the results of the Company's operations and its cash flows for
the Company's fiscal year and do not include comparative financial information.

PricewaterhouseCoopers AG

Leipzig, Germany
February 27, 2007