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, 2008

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	(I.R.S. Employer
incorporation or organization)	Identification No.)
138 Bartlett Street
Marlboro, Massachusetts 01752	(508) 357-2221
(Address of principal executive offices)(zip code)	(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	The NASDAQ Stock Market LLC

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. o Yes þ No

     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.
o Yes þ No

     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. þ Yes o No

     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). o Yes þ No

     The aggregate market value of the registrant’s voting and non-voting common equity held by non-affiliates as of June 28, 2008 was approximately $1.46 billion.

     As of February 13, 2009, there were 164,877,650 shares of the registrant’s Common Stock, $.01 par value per share, outstanding.

TABLE OF CONTENTS

	Page
Item 1. Business		3
Item 1A. Risk Factors		13
Item 1B. Unresolved Staff Comments		29
Item 2. Properties		30
Item 3. Legal Proceedings		30
Item 4. Submission of Matters to a Vote of Security Holders		30
PART II
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		31
Item 6. Selected Financial Data		33
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations		34
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		49
Item 9B. Other Information		49
PART III
Item 10. Directors and Executive Officers of the Registrant		50
Item 11. Executive Compensation		54
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		69
Item 13. Certain Relationships and Related Transactions		71
Item 14. Principal Accounting Fees and Services		73
PART IV
Item 15. Exhibits, Financial Statement Schedules		73
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 1 — Condensed Financial Information of the Registrant		F-36
SIGNATURES
Ex-10.3 First Amendment to Amended and Restated 2000 Stock Option and Incentive Plan
Ex-10.32 Master Supply Agreement by and between the Registrant and IBC Solar AG, dated July 14, 2008
Ex-10.33 Amended and Restated Sales Representative Agreement by and Between the Registrant and Sovello dated October 6, 2008
Ex-10.34 Quad Technology License Agreement by and Between the Registrant and Sovello dated October 6, 2008
Ex-10.35 Addendum to Quad Technology License Agreement by and Between the Registrant and Sovello dated October 6, 2008
Ex-10.36 Undertaking of Evergreen Solar dated October 6, 2008
Ex-10.37 Amended and Restated Master Joint Venture Agreement by and among the Registrant, Q-Cells, REC and Sovello AG, dated November 6, 2008
Ex-10.38 Form of Amended and Restated Change of Control Severance Agreement
Ex-10.39 Form of Amended and Restated Change of Control Severance Agreement
Ex-10.40 Form of Amended and Restated Change of Control Severance Agreement
Ex-10.41 Amended and Restated Management Incentive Policy
Ex-10.42 PV License Agreement by and between ESLR1, LLC and TISICS Ltd. dated September 5, 2007
Ex-23.1 Consent of PricewaterhouseCoopers LLP, an Independent Registered Public Accounting Firm
Ex-23.2 Consent of Leipzig, Germany PricewaterhouseCoopers AG
Ex-31.1 Certification of the Chief Executive Officer
Ex-31.2 Certification of the Chief Financial Officer
Ex-32.1 Certification of the Chief Executive Officer
Ex-32.2 Certification of the Chief Financial Officer
Ex-99.1 - Sovello balance sheet for the period ended December 31,2006
Ex-99.2 - Sovllo income statement for the period December 20 to December 31, 2006
Ex-99.3 - Sovello cash flow for the period December 20 to December 31, 2006
Ex-99.4 - Sovello 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 timing of such facilities becoming fully operational and meeting manufacturing capacity goals on schedule and within budget;

• the sufficiency of our cash, cash equivalents and marketable securities; access to capital markets to satisfy our anticipated cash requirements; and possible sales of securities and our planned use of proceeds from such sales;

• 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;

• the demand and market for solar energy, shifts in our geographic product revenue mix, and our position in the solar power market;

• the volume of photovoltaic solar panels we will produce;

• the making of strategic investments and expansion of strategic partnerships, manufacturing operations and distribution networks; and the future benefit of these activities;

• operating efficiency of manufacturing facilities, including increases in manufacturing scale and technological improvements needed to continuously reduce the cost per watt to manufacture our products;

• revenue from customer contracts primarily denominated in Euros that are subject to foreign currency exchange risks and the use of derivative financial instruments to manage those risks;

• future plans and benefits from the Sovello joint venture (formerly EverQ), including the expansion of Sovello’s manufacturing capacity and our ability to obtain liquidity for our investment through an initial public offering of Sovello shares or otherwise;

• our receipt or Sovello’s receipt of public grant awards and other government funding to support our expansion or Sovello’s expansion;

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

• our ability to obtain key raw materials, including silicon supply from our suppliers;

• the benefits of our proprietary technology and new manufacturing and other developments, including our quad wafer furnace design and continued enhancements of our wafer, cell and panel production technologies; and

• the payment of any cash dividends.

     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 Item 1A.“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.

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ITEM 1. BUSINESS.

BUSINESS OVERVIEW

     We develop, manufacture and market String Ribbon™ solar panels utilizing our proprietary wafer manufacturing technology. Our technology involves a unique process to produce multi-crystalline silicon wafers by growing thin strips of multi-crystalline silicon that are then cut into wafers. This unique process substantially reduces the amount of silicon and other processing costs required to produce a wafer when compared to wafer manufacturers utilizing conventional sawing processes. Silicon is the key raw material in manufacturing multi-crystalline silicon wafers. With current silicon consumption of less than five grams per watt, we believe we are the industry leader in efficient silicon consumption and use approximately half of the silicon used by wafer manufacturers utilizing conventional sawing processes. The wafers we produce are the primary components of photovoltaic (“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 silicon-based PV technologies.

     Through intensive research and design efforts we have significantly enhanced our wafer manufacturing technology and our ability to manufacture multi-crystalline silicon wafers. Our new manufacturing facility located in Devens, Massachusetts is using our quad wafer furnace equipment, which grows four thin strips of multi-crystalline silicon from one furnace as compared to the dual strip furnaces historically used in the Marlboro pilot facility. Our quad wafer furnace incorporates a state of the art automated wafer cutting technology that improves our manufacturing process.

     We began production of solar panels in our first Devens facility during the third quarter of 2008. Upon reaching full production capacity, which is scheduled to occur in the second half of 2009, the Devens facility is expected to be operating at an annual production capacity of approximately 160 megawatts, or MW.

     Since April 2007 we have entered into multi-year silicon supply agreements with four suppliers. Under our silicon 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), we have silicon under contract that provides over 12,000 metric tons of silicon through 2019 including 550 metric tons in 2009. During 2009, DC Chemical is expected to provide approximately 65% of our 2009 expected requirements.

     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 primarily include on-grid generation, in which supplemental electricity is provided to an electric utility grid. Our products are currently sold to customers primarily in Europe and the United States. During the year-ended December 31, 2008 we entered into seven multi-year solar panel supply agreements, a portion of which are denominated in Euros. The combined current estimated sales value for all seven agreements is approximately $2.8 billion at December 31, 2008 exchange rates, with deliveries scheduled through 2013.

     On December 29, 2008, as part of ongoing efforts to lower overhead costs and reduce overall cash requirements, we committed to a plan to cease operations at our pilot manufacturing facility in Marlboro, Massachusetts. Production at the facility ceased on December 31, 2008. Future advanced manufacturing piloting activities will be performed at our Devens manufacturing facility. Most of the Marlboro pilot manufacturing facility employees have transferred to the Devens manufacturing facility to fill open positions associated with the second phase of Devens. As a result of the cessation of manufacturing in Marlboro, we recorded restructuring costs, principally non-cash charges, of approximately $30.4 million associated with the write-off of manufacturing and development equipment, inventory and leasehold improvements of the Marlboro pilot facility. We may also incur occupancy, location restoration and moving costs of approximately $4.0 to $5.0 million during 2009. We believe that closing the Marlboro pilot manufacturing facility and better utilizing existing equipment and facilities at our research and development center and at our Devens manufacturing facility will result in lower overhead costs and reduce overall cash requirements.

     At December 31, 2008, we had approximately $178 million of cash, cash equivalents and marketable securities, of which approximately $23 million was due to Sovello that we collected as their sales agent. Through mid-2009, the completion of the Devens factory,

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the first phase of our Midland factory and debt service interest payments will require approximately $120 million, leaving approximately $35 million available to fund our operations. Throughout the first half of 2009, we expect our working capital requirements will increase substantially as production and shipments increase from our Devens facility. Assuming we are able to execute our business plan as currently envisioned, we believe that our cash on hand combined with our expected increases in working capital balances will provide us with sufficient liquidity or access to liquidity to fund our operations and planned capital programs for the next 12 months. We also believe that given the current state of the worldwide economy and credit markets, it is prudent to pursue short-term financing options, including but not limited to renegotiation of existing or new working capital lines of credit, in order to provide us with the most flexible liquidity protection possible. If adequate capital does not become available when needed 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.

Sovello Joint Venture

     Our wafer manufacturing technology is also used by Sovello AG (formerly EverQ GmbH), or Sovello, 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 multi-crystalline wafers, and the main supplier of silicon to Sovello). Sovello began operations in mid-2006 and has grown to approximately 85 MW, of annual production capacity from two manufacturing facilities as of December 31, 2008.

     On October 25, 2007, we and our two Sovello partners approved the construction of Sovello’s third manufacturing facility, Sovello 3, in Thalheim, Germany, which is expected to increase Sovello’s annual production capacity to approximately 180 MW by the second half of 2009. Our quad wafer furnaces will be used by Sovello as it expands its own production capacity. Sovello will pay us a royalty based on actual cost savings realized using our quad wafer furnaces in Sovello 3 as compared to its dual wafer furnaces, which are in use at Sovello’s first two manufacturing facilities.

     On December 19, 2006, we became equal partners in Sovello 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 Sovello 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 Sovello’s net income or loss as a single line item in our income statement.

     Until December 31, 2008, we marketed and sold all solar panels manufactured by Sovello under the Evergreen Solar brand, and managed customer relationships and contracts related to the sale of Sovello manufactured product. Since Sovello began operating, we have received fees from Sovello resulting from the sale of Sovello’s solar panels. During 2007 and 2008, we received a fee of 1.7% and 1.6%, respectively, of gross Sovello revenue in total sales and marketing fees. In addition, we have received and will continue to receive royalty payments for our ongoing technology contributions to Sovello. Combined, the sales and marketing fee and royalty payments totaled approximately 6.0% and 5.2% of gross Sovello revenue during 2007 and 2008, respectively, or approximately $11.5 million and $16.7 million, respectively.

     For 2009, we, Q-Cells and REC agreed to have Sovello begin marketing and selling its products under its own brand. Sovello will continue to manufacture some Evergreen Solar- branded product in 2009 and 2010 but, with its independent sales and marketing team now in place, our involvement in marketing and selling Sovello product will decrease. In light of the sales transition, our selling fee for Sovello product sold under the Evergreen Solar brand has been reduced to 0.5% for 2009 and will eventually be eliminated once the transition is complete. Despite the sales transition, Evergreen Solar will continue to receive royalty payments for the Evergreen Solar technology used to manufacture Sovello’s products.

INDUSTRY BACKGROUND

Overview

     With approximately $1 trillion in annual global revenues during 2007, 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.

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     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 598 MW in 2003 to 2,826 MW in 2007, representing a CAGR 47.4%, while solar power industry revenues grew to approximately $17.2. billion in 2007. 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 $23.7 billion and $50.5 billion by 2011.

  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.

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• 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 30% investment tax credit for solar investment was renewed and made eligible for conversion into a direct grant by the American Recovery and Investment Act.

     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 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 technology. Our technology is a cost-effective process for manufacturing thin strips of crystalline silicon that are then 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 wafer manufacturers utilizing conventional sawing processes.

     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 12% of solar cell production in 2007. 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:

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• 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 has been imperative for the growth of the industry due to the limited supply and increasing cost of silicon raw material experienced until the recent past. Even if silicon becomes readily available to support very rapid industry growth, and prices for silicon decline, silicon is still a dominant component of the cost of a crystalline silicon solar panel. 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 wafer 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 88% of solar cell production in 2007, according to Solarbuzz. Conventional crystalline silicon technology involves sawing thin wafers from solid crystalline silicon blocks. Crystalline silicon products are known 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.

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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 Wafer Manufacturing Technology. Our wafer manufacturing technology enables continuous growth of thin crystalline silicon strips that are then 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. Our proprietary technology enables us to produce wafers at industry-leading manufacturing cost. We have been developing and enhancing our patented wafer manufacturing technology since 1994 and have achieved the lowest silicon consumption rates in the industry with our quad wafer furnace, which currently consumes less than five grams of silicon per watt produced or approximately half of the silicon used by wafer manufacturers utilizing conventional sawing processes. Since mid-2006, our technology has been successfully demonstrated by Sovello, where there was approximately 85 MW of annual production capacity in place as of December 31, 2008. Our new highly automated quad wafer furnace technology is currently in operation in our new Devens integrated manufacturing facility which produced 8.5MW in the fourth quarter of 2008 and is expected to reach its full capacity of approximately 160MW of annual production by the second half of 2009.

     Established Relationships with Key Suppliers. Polysilicon has historically been in short supply and currently represents the most costly component in the production of solar cells. Since April 2007 we have entered into multi-year silicon supply agreements with four suppliers. Silicon is the key raw material in manufacturing multi-crystalline silicon wafers. Under our silicon 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), we have silicon under contract that provides over 12,000 metric tons of silicon through 2019 including 550 metric tons in 2009. During 2009, DC Chemical is expected to provide approximately 65% of our 2009 expected requirements. These contracts provide us with enough silicon for us to substantially increase our wafer manufacturing capability, and likewise panel production, over the next few years.

     Attractive Take-or-Pay Sales Contracts. Over the past 12 months, we have established additional 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 partners, Mainstream Energy (or Mainstream), or groSolar, Ralos, SolarCity, Wagner, IBC Solar and a large Japanese industrial customer, with a total quantity of almost one gigawatt for deliveries through 2013. 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.

     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 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 the 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 that utilizing our proprietary manufacturing technology as an integral part of solar panel manufacturing will result in industry-leading manufacturing cost and among the first of multi-crystalline silicon panel producers to achieve grid-parity within a few years. We also expect to continue to work with partners further down the value chain to reduce the installed cost of solar.

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For example, through our close ties with NSTAR, WMECO and National Grid, all Massachusetts-based utilities, combined with our relationships with our partners directly involved in project design and implementation, 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 Leadership in Wafer Technology, through Continuous Innovation. We employ 57 research and development employees at an approximately 40,000 square foot facility in Marlboro, Massachusetts primarily dedicated to research and development initiatives. Further enhancing and improving our manufacturing process is critical in allowing us to be able to produce solar power products that are at or below grid parity. We have clearly defined technology roadmaps to improve upon our process that we believe could result in manufacturing costs that will compete with other solar technologies, such as thin-films which currently have lower manufacturing costs, albeit with lower conversion efficiencies.

     Proliferate Our Technology Commensurate With the Growing Demand for Solar. Based upon the success achieved thus far at our Devens facility and at Sovello, combined with the growing awareness and support for renewable energy worldwide, we expect to expand our manufacturing capabilities to accommodate the expected growth of the solar industry. While there are many options for expansion, the current condition of the credit markets has led us to broaden our options for growth, most notably potentially subcontracting cell and panel manufacturing. We believe employing a subcontracting strategy for cell and panel manufacturing while maintaining our own wafer manufacturing will allow us to leverage our already industry-leading manufacturing capability for wafers combined with best-of-breed capabilities already employed by incumbent production cell and panel manufacturers or other well-experienced subcontract manufacturers. As such, we believe we can increase our access to panel production capacity faster, produce panels at a lower cost, and require substantially less capital than if we were to build a fully integrated wafer-to-panel factory on our own.

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 approximately 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 1.8 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 210 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 String Ribbon solar 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.

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     Going forward we expect to collaborate closely with a relatively small number of resellers throughout the world. As of December 31, 2008, 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, 2008, sales to our five largest distribution partners accounted for approximately 67% 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 consolidated financial statements included in this Annual Report on Form 10-K.

     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 establish large-scale manufacturing of our solar power products at low cost, thereby enabling us to penetrate price-sensitive solar power markets. We have significantly increased our manufacturing capacity with the development of a new state-of-the-art facility in Devens, Massachusetts. The Devens factory is a fully integrated wafer-to-panel manufacturing facility that uses our quad furnace technology to produce wafers. Construction of the first phase of Devens began in September 2007 and the first solar panels were produced in the third quarter of 2008. Construction of the second phase of Devens began in early 2008 with completion expected in mid 2009. As part of our objective to lower overhead costs and reduce overall cash requirements we ceased operations at our 56,000 square foot Marlboro pilot manufacturing facility on December 31, 2008. Advanced manufacturing piloting activities will be performed at our Devens manufacturing facility with little or no impact to overall production capacity.

     We use a special form of high temperature filament in our wafer manufacturing process that is not used by any other wafer manufacturer. We currently meet our high temperature filament 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 the high temperature filament. We are completing construction of a new facility in Midland, Michigan where we will produce our high temperature filament and expect to begin production in the second half of 2009.

     In recent years, our Sovello partnership has substantially increased the volume of solar power products using our proprietary technology. Sovello has increased productive capacity from about 30 MW in 2006 to approximately 85 MW as of December 31, 2008. 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 which will use our quad wafer furnaces.

     Because the market opportunity for solar power encompasses numerous applications in both developed and developing nations worldwide, 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.

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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 23 U.S. patents, eight Indian patents, and six European patents that are enforceable in multiple European jurisdictions. These patents begin to expire in 2016 and will all expire by 2024. In addition, we have 23 U.S. patent applications pending and 36 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 wafer fabrication technology, including methods for automated, high-yield production techniques, are covered by 11 U.S. patents, three Indian patents and four European patents that have been validated with enforceable rights in multiple European jurisdictions. In addition, for this technology, we also have 15 pending U.S. patent applications, nine pending PCT applications, and nine pending national/regional phase 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. In addition, for this technology, we also have four pending U.S. patent applications and three pending PCT applications.

• Solar Panels. For our advanced solar panel designs, we currently own eight U.S. patents, five Indian patents, two European patents that have been validated with enforceable rights in multiple European jurisdictions, and two Japanese patents. 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 this technology, we have four pending U.S. patent applications, three pending PCT applications, and 13 pending national/regional phase foreign patent applications.

  Trademarks and Copyrights

     We have one U.S. registered trademark we are currently using and two 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

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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 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 300 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, Sanyo Corporation, Sharp Corporation, Solar World AG, SunPower Corporation, SunTech Power Holdings Co., Ltd, Trina Solar, and Yingli. 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. Competitors who also directly produce solar grade silicon may have an advantageous cost advantage for this raw material.

     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. The current and projected difficult financial markets have resulted in a slowdown in large project builds. The resulting increased availability of solar panels may accelerate the price reduction ramp of the industry, causing decreased margins and an even more competitive marketplace.

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

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     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, 2008, we had approximately 801 full-time employees, including approximately 57 engaged in research and development and approximately 660 engaged in manufacturing. Approximately 68 of our employees have advanced degrees, including 23 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. The completion of our Devens and Midland manufacturing facilities is expected to increase our number of full-time employees by approximately 245.

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. Other factors may also exist that we cannot anticipate or that we currently do not consider to be significant based on currently available information. The occurrence of any of the following risks could materially affect our business, financial condition, results of operations, cash flows and future results.

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 in September 2001. Relative to the entire solar industry, we have shipped only a limited number of solar power panels and have recognized limited revenues generated by products we have manufactured.

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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 Devens facility or find third parties to manufacture our products or license our proprietary technologies, and our business model, technologies and processes are unproven at significant scale. 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 $84.9 million for the year ended December 31, 2008. Principally as a result of ongoing operating losses, we had an accumulated deficit of $221.2 million as of December 31, 2008. We expect to incur additional losses until the first phase of Devens reaches full capacity, and if we do not achieve our expected production targets and cost reductions we may not become profitable. Even if we 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 may need to raise significant additional capital in order to continue to grow our business and fund our operations, as planned, which may not be available on acceptable terms or at all.

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. Furthermore, we, along with REC and Q-Cells, have certain obligations to fund Sovello if past government grants for Sovello are reclaimed or additional expected grants for Sovello are not obtained, if the current Sovello expansion, Sovello 3, exceeds budget, or if Sovello violates a financial covenant in its loan agreement with its lenders, under certain circumstances. As of December 31, 2008, Sovello is in violation of one of its bank loan financial covenants. Based on current negotiations with the bank, we anticipate providing additional funds to Sovello in the form of a loan or additional equity investment. If we, Sovello, and Sovello's other shareholders cannot obtain an amendment to Sovello's loan agreement, this could require us to make an additional investment in Sovello. These and other obligations could impact the availability of our existing funds. If adequate capital does not become available when needed 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.

Our ability to raise capital will be severely hampered by adverse changes in general economic market conditions. The U.S. economy is currently undergoing unprecedented turmoil amid stock market volatility, difficulties in the financial services sector, tightening of the credit markets, softness in the housing markets, concerns of inflation and deflation, reduced corporate profits and capital spending, reduced consumer spending, and continuing economic uncertainties. This turmoil and the uncertainty about future economic conditions could negatively impact our ability to obtain debt or equity financing of our operations. The cost and availability of credit has been and may continue to be adversely affected as concerns about the stability of the markets generally and the strength of counterparties specifically has led many lenders and institutional investors to reduce, and in some cases, cease, to provide funding to borrowers. If these market and economic conditions continue, they may limit our ability to access the capital markets to meet liquidity and capital expenditure requirements. We cannot predict the timing, strength or duration of this severe global economic downturn.

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Our future success depends on our ability to increase our manufacturing capacity through the development of manufacturing facilities in addition to the completion of our Devens facility, to establish contract manufacturers, license our technologies or otherwise outsource the manufacturing of our products. Our inability to increase our production capacity directly or successfully outsource the manufacturing of our products will limit our growth potential and impair our operating results and financial condition.

Our future success depends on our ability to increase our manufacturing capacity with manufacturing facilities beyond the completion of our Devens facility, contract manufacturers and licensing of our technologies. Our ability to complete our Devens facility is contingent on successfully managing the remaining stages of equipping and commencing the operation of the facility. Our failure to successfully and cost-effectively manage this process could delay completion of Devens. 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 our Devens and Midland facilities and the planning, construction and equipping additional manufacturing facilities as needed is subject to significant risk and uncertainty, including:

• the completion of any facilities will be subject to the risks inherent in the establishment 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 customization, delivery, and installation of manufacturing equipment from numerous suppliers; and

• 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.

If we are unable to develop and successfully operate additional manufacturing facilities, establish contract manufacturing relationships or license our technologies, 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, establish contract manufacturing relationships or license our technologies, 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 our Sovello joint venture agreement that governs our relationship with the other Sovello joint venture participants may limit 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 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 Sovello, 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 complicating attempts we may make to expand our manufacturing outside of the United States.

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If our suppliers fail to deliver polysilicon sufficient to meet our needs or we are unable to otherwise obtain the polysilicon we need to meet our production targets, our revenue growth, gross margins and profitability would be adversely affected.

Recent announcements by major silicon suppliers regarding delays in the start-up of their new polysilicon production facilities and delays in deliveries from our suppliers are indicative of the complexities involved in polysilicon manufacturing and highlight the possibility that our suppliers may not provide polysilicon sufficient to meet our manufacturing requirements for our expected panel production levels.

Polysilicon is an essential raw material in our production of photovoltaic wafers and cells which we use to make our solar panels. In recent years there has been 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 need to delay shipments currently expected under these contracts. A number of our suppliers, including DC Chemical, Nitol and Silpro, are constructing new facilities 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 has 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. Although we have long-term polysilicon supply agreements with five different suppliers, only DC Chemical, REC and Nitol are contracted to provide us with polysilicon during 2009, of which DC Chemical is expected to provide approximately 65% of our 2009 expected requirements.

If DC Chemical, Wacker, Nitol, Silpro, REC or any other polysilicon suppliers are unable or unwilling to supply us with polysilicon as previously forecasted under 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.

Our dependence on a limited number of suppliers for raw materials other than polysilicon, key components for our solar power products and capital 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 products using materials and components procured from a limited number of suppliers and certain materials and components we use are proprietary or available only from a limited number of sources. Our materials and components supply chain, therefore, makes us more susceptible to quality issues, shortages and price changes. Also, 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. If we fail to develop, maintain or expand successful relationships with suppliers, if our suppliers fail to supply good quality materials on time that meet our cost requirements or if we experience damage to or breakdown of our manufacturing equipment, we may be unable to manufacture our products in a timely and cost-effective manner. Manufacturing delays and cost overruns could prevent us from delivering our products to our distribution partners within required time frames at competitive prices which could lead to order cancellations and loss of market share and a material adverse impact on our business.

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If the market price of polysilicon continues to decrease, we could be at a significant competitive disadvantage because we have entered into multi-year polysilicon contracts.

The market price for polysilicon has been decreasing steadily since mid-2008. Polysilicon prices are expected to continue to decline and could fall below the price we have contracted for with our long-term silicon suppliers. We may not be able to modify the contracted price charged to us by our suppliers. Other wafer manufacturers may be able to enter into long-term contracts or buy polysilicon on the spot market at lower prices than those we have contracted for with our suppliers. If the price we pay for polysilicon is significantly higher than the price paid by our competitors, our competitive cost advantage of producing wafers could decrease. Our inability to reduce a key manufacturing cost to the same degree as our competitors could adversely affect our ability to price our products competitively and generate favorable profit margins.

In light of current market conditions, we may be unable to complete an initial public offering of shares of our Sovello joint venture as was previously contemplated or otherwise realize a return on our investment in Sovello in the near term.

Although we previously announced our desire to complete an initial public offering of Sovello shares by the end of 2009, we no longer expect that such an offering for Sovello’s shares can be successfully completed in that timeframe. Even if Sovello can complete an initial public offering at a later time, we can give no assurance regarding the level of the initial offering price or the market performance of Sovello shares after the initial public offering. Without an initial public offering of Sovello shares, our ability to realize a return from our investment in Sovello may be very limited, which will limit our liquidity and capital resources.

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 wafer furnace design, have been in use for a only limited time and our new products have been field-tested and/or sold in limited quantities. We cannot be certain our manufacturing technologies and products will perform as expected. 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.

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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 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, 2008, we sold our solar power products to approximately 37 distributors, system integrators, project developers and other resellers. Substantially all of our products were sold to just 12 of these distribution partners. If we are unable to maintain 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 lower brand recognition as a newer entrant and smaller volume producer.

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 Sovello, constituted approximately 42% and 18% of our total product revenues for the year ended December 31, 2008 and 2007, 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

• 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.

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Our strategy may include establishing local manufacturing facilities or engaging contract manufacturers in international markets or licensing our technology. 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 Sovello, 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 complicating 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, 2008, approximately 31%, 15% and 9% of our product revenues were generated from sales to SunPower Corporation, Ralos Vetriebs and Solar City. 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.

Our recent long-term customer contracts for our products will result in a significant portion of our sales of Evergreen Solar manufactured products being concentrated among a limited number of customers in 2009 and 2010. The failure of one or more customers to purchase our products in accordance with their contractual commitments could significantly decrease our revenues and harm our business, financial condition and results of operations.

In 2008, we entered into long-term sales agreement commitments with seven customers that extend until the end of 2013. These seven customers have agreed to purchase, in the aggregate, a majority of our estimated total manufacturing output for 2009, with two of the seven each purchasing more than 10% of our estimated 125 MW to 130 MW of total manufacturing output in that period.

The failure of these customers to purchase product as agreed in our contracts could significantly harm our business, financial condition and results of operations. Given the nature of the market for our products and the terms of our customer contracts, we have been required to reduce our prices or modify other payment terms on occasion during the fourth quarter of 2008 and first quarter of 2009. Any price reductions will result in lower revenues and decreased margins.

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 three 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.

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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 Sovello, 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 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.

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 801 employees as of December 31, 2008, and we anticipate that we will need to hire approximately 150 employees in connection with the completion of our Devens facility. We have had to increase our workforce rapidly from approximately 330 at December 31, 2006 to an expected 850 in April 2009. Such rapid expansions in force are difficult to manage and often result in increased employee turnover. Finding and retaining good personnel for a rapidly expanding and pre-profitability business is challenging, and highly qualified technical personnel are likely to remain a limited resource for the foreseeable future despite current economic conditions and rising unemployment levels. 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, Italy, Greece, France, Korea 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

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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 7.0% to 10.0% per year (based on the type and size of the PV system). 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 solar power installed within California. Recently the 30% investment tax credit for solar energy has been extended for eight years. The Economic Stimulus Bill just signed by President Obama offers additional benefits however until the details of the implementation of this bill are solidified, it is unknown how rapidly or to what magnitude the solar industry will be effected. 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, Sanyo Corporation, Sharp Corporation, Solar World AG, SunPower Corporation, SunTech Power Holdings Co., Ltd. Trina Solar and Yingli. We also expect that future competition will include new entrants to the solar power market offering new technological solutions. In the future, as Sovello 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 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

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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 from 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;

• to the extent we license our technology to third parties in foreign countries, we may encounter difficulties in protecting and defending our intellectual property rights against such third parties and others;

• 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 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

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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 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 high temperature filament 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 license to manufacture high temperature filament 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.

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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 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.

Our Devens, Massachusetts manufacturing facility has been constructed on part of the former Fort Devens Army base, which is associated with contamination caused by prior military activities on and near the site. Fort Devens closed in the early 1990’s and subsequently underwent environmental remediation according to an agreement between the U.S. Environmental Protection Agency, or the EPA, and the U.S. Army. As a condition to the lease for the property, we must not disturb existing groundwater monitoring wells and must allow the U.S. Army access to the property to conduct testing and remedial activities. If environmental contamination is found on the Devens site it could be incorrectly attributed to our activities or the U.S. Army could be required to take additional remedial actions on the Devens site. Any such activities could disrupt the operation of our manufacturing facility.

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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.

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

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

Litigation against Lehman Brothers and Barclays to recover shares of our common stock loaned to Lehman Brothers could be expensive, time-consuming and ultimately unsuccessful.

We filed suit in the United States Bankruptcy Court for the Southern District Court of New York against Barclays and Lehman Brothers entities seeking the return of 12.2 million shares of our common stock previously loaned by us to Lehman Brothers in July 2008. In February 2009, Lehman Brothers and Barclays filed motions to dismiss our claims. We will oppose the motions to dismiss but expect Lehman Brothers and Barclays to vigorously support their motions and to continue to defend their position against our claims. We may incur significant legal expenses and allocate management time and attention to the litigation. Despite our expense and efforts, no assurance can be provided that we will be able to recover any of the shares or be awarded any damages from Lehman Brothers or Barclays.

In light of economic uncertainty and extremely difficult credit markets, our expansion plans may be delayed and we may not be able to fulfill customer contracts for shipments in 2011 and beyond.

Economic uncertainty, turmoil in the financial markets and disarray in the world credit markets may adversely impact our previously announced long-term expansion plans to reach sales of 300 MW in 2010, 600 MW in 2011 and 850 MW in 2012. While we expect to have enough capacity from our new facility in Devens to meet our long term sales contracts through 2010, we are currently committed to supply aggregate volumes to customers beginning in 2011 that will exceed the expected capacity of our Devens facility. We do not know whether we will be able to raise additional financing or whether we will be able to do so on favorable terms and in the necessary timeframe. If the cost and availability of capital does not improve significantly in the next few quarters, we may need to delay our expansion plans. If we delay our expansion plans and cannot increase the production of our products by engaging contract manufacturers or otherwise outsourcing our manufacturing requirements, as early as the second quarter of 2011 we may not be able to deliver the volumes of solar panels we have agreed to supply pursuant to our long-term customer supply agreements.

The significant amount and the structure of our recent offering of senior convertible notes could adversely affect our business, financial condition and results of operations.

We incurred a significant amount of debt and substantial debt service requirements as a result of the offering of our senior convertible notes completed in July 2008. As of December 31, 2008, we had $373.8 million of indebtedness outstanding, in addition to $3.0 million of letters of credit issued under our working capital facility. Our substantial indebtedness could have significant consequences on our future operations, including:

• requiring us to use a substantial portion of our cash flow from operations to service our indebtedness, which would reduce our cash flow available for working capital, capital expenditures, development projects and other general corporate purposes;

• limiting our flexibility in planning for or reacting to, and increasing our vulnerability to, changes in our business, the industry in which we operate and the general economy; and

• placing us at a competitive disadvantage compared to our competitors who have less debt or are less leveraged.

Any of the above-listed factors could have an adverse effect on our business, financial condition and results of operations.

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Our ability to meet our payment and other obligations depends on our ability to generate significant cash flow in the future. This, to some extent, is subject to general economic, financial, competitive, legislative and regulatory factors as well as other factors that are beyond our control. We cannot assure you that our business will generate sufficient cash flows from operations, or that future borrowings will be available to us in amounts sufficient and on terms reasonable to us to support our liquidity needs. If we are not able to generate sufficient cash flow to service our debt obligations, we may need to refinance or restructure our debt, including our senior convertible notes, sell assets, reduce or delay capital investments, or seek to raise additional capital.

We may incur additional indebtedness. If we do so, our increased debt service requirements may affect our adversely affect our ability to meet our payment obligations on our currently outstanding senior convertible notes and otherwise successfully grow and operate our business.

Unfavorable changes in foreign currency exchange rates could increase the cost to manufacture our products or result in foreign currency exchange losses, which could adversely affect our profits, product orders and market share.

As we expand our manufacturing operations, our exposure to fluctuations in currency exchange rates are expected to increase. In 2007 and 2008, we entered into multi-year silicon supply agreements with four suppliers. Two of these agreements are denominated in Euros. Additionally, from time to time we purchase equipment and materials internationally with delivery dates as much as six to twelve months or more in the future. There have been significant currency fluctuations in recent periods. To the extent that any purchase obligations are denominated in foreign currency, we are exposed to potential increased costs if the U.S. dollar currency loses value relative to the applicable foreign currency, which will adversely impacting our future financial condition and results of operations.

In addition, the expansion of our distribution network internationally has increased our exposure to fluctuation in currency exchange rates. For the year ended December 31, 2008, approximately 38% of our product revenues were denominated in Euros. The portion of our product revenues that are denominated in Euros are expected to increase in future periods based on our seven multi-year solar panel supply agreements, a portion of which are denominated in Euros and other expected customers. The combined estimated current sales value of these agreements is approximately $2.8 billion at December 31, 2008 exchange rates. These panel supply agreements provide the general terms and conditions pursuant to which certain customers will purchase from us specified annual quantities of solar panels beginning primarily in the second half of 2008 and continuing through 2013. As a result, a strengthening of the U.S dollar will decrease our expected U.S. dollar revenue under these agreements and thereby adversely affect our gross and net profit margins.

To date, we have not entered into any hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may enter into hedging transactions in the future, the availability and effectiveness of these transactions may be limited and we may not be able to successfully hedge our exposure at all.

Our ability to use net operating loss carryforwards may be subject to limitation.

Section 382 of the U.S. Internal Revenue Code of 1986, as amended, imposes an annual limit on the amount of net operating loss carryforwards that may be used to offset taxable income when a corporation has undergone significant changes in its stock ownership or equity structure. Our ability to use net operating losses may be limited by prior changes in our ownership, by the issuance of shares of common stock under this offering, by the issuance of shares of common stock upon conversion of the Notes, by the issuance of shares of common stock upon conversion of our senior convertible notes, or by the consummation of other transactions. As a result, if we earn net taxable income, our ability to use net operating loss carryforwards to offset U.S. federal taxable income may become subject to limitations, which could potentially result in increased future tax liabilities for us.

Provisions of our senior convertible notes could discourage an acquisition of us by a third party.

Certain provisions of the senior convertible notes we issued could make it more difficult or more expensive for a third party to acquire us, or may even prevent a third party from acquiring us. For example, upon the occurrence of certain transactions

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constituting a fundamental change, holders of the notes will have the right, at their option, to require us to repurchase all of their notes or any portion of the principal amount of such notes, or, upon certain change of control transactions, holders of the notes may elect to convert all or a portion of the notes. We may also be required to increase the conversion rate for conversions in connection with certain fundamental changes. By discouraging an acquisition of us by a third party, these provisions could have the effect of depriving the holders of our common stock of an opportunity to sell their common stock, as applicable, at a premium over prevailing market prices.

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, 2008, we had:

• 164,874,850 shares of common stock outstanding;

• 3,687,890 shares of common stock underlying options outstanding at a weighted average exercise price of $4.65 per share;

• 2,197,996 shares of common stock available and reserved for future issuance or future grant under our Amended and Restated 2000 Stock Option and Incentive Plan;

• 277,845 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

• 30,856,538 shares of common stock issuable upon the conversion of our outstanding senior convertible notes in the aggregate principal amount of $373.8 million at an initial conversion rate of approximately 82.56 shares of common stock per $1,000 principal amount of notes (equivalent to a conversion price of approximately $12.11 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 transfer restricted shares of our 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.

     Three stockholders own, or claim to own, a large portion of our outstanding voting power and may be able to influence significantly the outcome of any stockholder vote.

     DC Chemical owns 15,698,125 shares of our common stock (which number includes 10,750,000 shares of transfer restricted common stock, which have full voting rights), Barclays PLC beneficially claims to own 12,220,128 shares of our common stock and FMR LLC beneficially owns 18,891,778 shares of our common stock, representing respectively approximately 9.5%, 7.4% and 11.4% of our voting power outstanding as of February 15, 2009. Accordingly, these stockholders 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 these investors may differ from yours and

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they may vote in a way with which you disagree and which may be adverse to your interests. In addition, pursuant to the stockholders agreement we entered into with DC Chemical, DC Chemical has the right to purchase securities in future offerings we may make. 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 our 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 $12.30 to $1.62 for the 52-week period from February 14, 2008 to February 13, 2009. 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 manufacturing 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 complete Devens and other potential capacity expansions within budget and within the time frame that we expect;

• Sovello’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;

• 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

• general economic conditions, including a worldwide economic slowdown and the possibility of a prolonged severe recession in the U.S.; recent disruptions to the credit and financial markets in the U.S. and worldwide; fluctuations in economic and market conditions that affect the viability of conventional and non-solar renewable energy sources, such as increases or decreases in the price of oil and other fossil fuels; and other economic conditions specific to the solar industry

• 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

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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

• 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.

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ITEM 2. PROPERTIES.

     As of December 31, 2008, we lease the following locations pursuant to long-term leases:

Location	Area		Purpose
138 Bartlett Street, Marlboro, MA		30,000 Sq. Ft	Corporate Headquarters &
			Warehouse
259 Cedar Hill Street, Marlboro, MA		56,000 Sq. Ft	Wafer, Cell & Panel Manufacturing
257 Cedar Hill Street, Marlboro, MA		40,000 Sq. Ft	Research & Development
112 Barnum Road, Devens, MA (land lease)		23.11 acres	Wafer, Cell & Panel Manufacturing
2820 Schuette Road, Midland, MI		31,000 Sq. Ft	High Temperature Filament Manufacturing

     Our leases expire on various dates between June 2009 and January 2014 other than our Devens lease which continues until 2037 and can be extended to 2057. During December 2008, as part of ongoing efforts to lower overhead costs and reduce overall cash requirements, we committed to a plan to cease production at our pilot manufacturing facility at 259 Cedar Hill Street in Marlboro, Massachusetts. Production at the facility ceased on December 31, 2008 although the lease continues until July 2010. As of December 31, 2008, we were productively utilizing substantially all of the space in the first phase of our Devens facility. Both the second phase of Devens and our new facility in Midland, Michigan were still under construction at December 31, 2008.

     Our Devens facility, which comprises approximately 450,000 square feet, was constructed on property in Devens, Massachusetts we are leasing from a Massachusetts state agency for an annual rent of $1. 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. Our new facility under construction in Midland, Michigan will occupy approximately 31,000 square feet.

     We believe that our facilities are suitable and adequate for our present needs and we periodically evaluate whether additional facilities are necessary.

ITEM 3. LEGAL PROCEEDINGS.

     We filed suit in the United States Bankruptcy Court for the Southern District Court of New York against Barclays PLC and certain of its affiliated entities (or Barclays), and Lehman Brothers Holdings Inc. and certain of its affiliated entities (or Lehman Brothers) seeking the return of approximately 12.2 million shares of our common stock previously loaned by us to Lehman Brothers in July 2008. Those shares were held by Lehman Brothers when it filed for bankruptcy and purportedly transferred to an affiliate of Barclays, PLC, Barclays Capital Inc. We have specifically demanded Barclays immediately return the 12.2 million shares it obtained from Lehman Brothers after Lehman Brothers filed for bankruptcy on the grounds that, among other things, Lehman Brothers did not hold title to the shares at the time of the purported transfer to Barclays.

     In connection with the initiation of the lawsuit, we asked the Court to enjoin any further transfer of the shares received by Barclays from Lehman. On November 5, the Bankruptcy Court denied our motion for such an injunction. In February 2009 we agreed to dismissed our claims against Barclays PLC as it was determined that the 12.2 million shares had been transferred to Barclays Capital Inc. and Barclays PLC was not needed as a party to the lawsuit. Also in February 2009, the remaining defendants filed motions to dismiss the claims alleged against them by us. We filed our opposition to the motions to dismiss and a hearing on the motions to dismiss and our opposition thereto is currently scheduled for April 22, 2009. We cannot predict the outcome of this effort to recover our shares or any damages related thereto.

     In the ordinary conduct of our business, we are also subject to periodic lawsuits, investigations and claims, including, but not limited to, routine employment matters. Although we cannot predict with certainty the ultimate resolution of lawsuits, investigations and claims asserted against us, we are not a party to any other material legal proceedings within the meaning of Item 103 of Regulation S-K.

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, 2008.

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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, 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
Year ended December 31, 2008
First Quarter	$	18.62	$	7.52
Second Quarter	$	12.64	$	8.08
Third Quarter	$	10.63	$	3.30
Fourth Quarter	$	6.14	$	1.89

     On February 13, 2009, the last reported sale price for our common stock on the Nasdaq Global Market was $1.66 per share. As of February 13, 2009, there were 164,877,650 shares of our common stock outstanding held by approximately 393 holders of record.

Dividend Policy

     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.

Equity Compensation Plan Information

     Information about our equity incentive plans can be found in Part III, Item 12 of this Annual Report on Form 10-K and in Note 11 and Note 17 to our consolidated financial statements contained within this Annual Report on Form 10-K.

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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 “Hemscott Group Index”) for the five fiscal years beginning January 1, 2004 and ending December 31, 2008. The comparison assumes $100 was invested at the close of business on December 31, 2003, the last trading day before the beginning of our 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.

ASSUMES $100 INVESTED ON DECEMBER 31, 2003
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDED DEC. 31, 2008

	12/31/03		12/31/04		12/31/05		12/31/06		12/31/07		12/31/08
Evergreen Solar, Inc.	$	100.00	$	260.12	$	633.93	$	450.60	$	1027.98	$	189.88
HemScott Group Index	$	100.00	$	98.29	$	97.06	$	105.65	$	131.32	$	62.22
NASDAQ Market Index	$	100.00	$	108.41	$	110.79	$	122.16	$	134.29	$	79.25

(1)	This 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 to prepare this Stock Performance 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.

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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, 2006, 2007, and 2008 and the balance sheet data at December 31, 2007 and 2008 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, 2004 and 2005, and the balance sheet data at December 31, 2004, 2005 and 2006 have been derived from our audited financial statements, which are not included in this filing. As of December 31, 2005 we owned 64% of Sovello. 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 Sovello using the equity method of accounting. Under the equity method of accounting, we report our one-third share of Sovello’s net income or loss as a single line item in our income statement and our investment in Sovello as a single line item on our balance sheet. Prior to December 20, 2006, we consolidated Sovello’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 Sovello, until December 31, 2008 we marketed and sold all solar panels manufactured by Sovello under the Evergreen Solar brand, as well as managed customer relationships and contracts related to those sales for which we received fees. We do not report product revenue or cost of revenue for the sale of Sovello manufactured panels. We also receive royalty payments pursuant to our technology license agreement with Sovello.

	Year Ended December 31,
	2004			2005			2006			2007			2008
STATEMENT OF OPERATIONS DATA:
Revenues:
Product	$	22,240		$	43,627		$	102,252		$	58,334		$	95,245
Royalty and fee		—			—			—			11,532			16,714
Total Revenues		22,240			43,627			102,252			69,866			111,959
Cost of revenues		29,717			39,954			90,310			52,838			93,073
Gross profit (loss)		(7,477	)		3,673			11,942			17,028			18,886
Operating Expenses:
Research and development		3,392			10,622			18,390			20,594			22,039
Selling, general and administrative		8,040			12,708			21,890			20,608			23,868
Equipment write-offs		—			—			1,526			—			8,034
Facility start-up		—			—			—			1,404			30,623
Restructuring charges		—			—			—			—			30,413
Total operating expenses		11,432			23,330			41,806			42,606			114,977
Operating loss		(18,909	)		(19,657	)		(29,864	)		(25,578	)		(96,091	)
Other income (expense), net		(454	)		1,146			1,851			6,806			2,721
Loss before minority interest, equity income and accretion		(19,363	)		(18,511	)		(28,013	)		(18,772	)		(93,370	)
Minority interest in Sovello AG		—			1,195			849			—			—
Equity income from interest in Sovello AG		—			—			495			2,170			8,435
Accretion, dividends and conversion premiums on Series A convertible preferred stock		(2,904	)		—			—			—			—
Net loss	$	(22,267	)	$	(17,316	)	$	(26,669	)	$	(16,602	)	$	(84,935	)
Net loss per share (basic and diluted)	$	(0.67	)	$	(0.29	)	$	(0.41	)	$	(0.19	)	$	(0.65	)
Weighted average shares used in computing basic and diluted net loss per share		33,204			59,631			65,662			86,799			130,675
	As of December 31,
	2004			2005			2006			2007			2008
BALANCE SHEET DATA:
Cash, cash equivalents and marketable securities *	$	11,942		$	116,207		$	49,421		$	140,703		$	177,509
Investment in and advances to Sovello AG		—			—			70,460			87,894			115,553
Working capital		14,281			124,404			57,590			112,228			156,792
Total assets		49,721			228,959			207,251			553,255			1,001,761
Subordinated convertible notes		—			90,000			90,000			90,000			—
Senior convertible notes		—			—			—			—			373,750
Total stockholders’ equity		41,520			87,450			92,847			393,293			519,679

* Includes restricted cash at December 31, 2007

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

EXECUTIVE OVERVIEW

     We develop, manufacture and market String Ribbon solar panels utilizing our proprietary wafer manufacturing technology. Our technology involves a unique process to produce multi-crystalline silicon wafers by growing thin strips of multi-crystalline silicon that are then cut into wafers. This unique process substantially reduces the amount of silicon and other processing costs required to produce a wafer when compared to wafer manufacturers utilizing conventional sawing processes. With current silicon consumption of less than five grams per watt, we believe we are the industry leader in efficient silicon consumption and use approximately 50% of the silicon used by wafer manufacturers utilizing conventional sawing processes. The wafers we produce are the primary components of photovoltaic (“PV”) cells which, in turn, are used to produce our String Ribbon 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 silicon-based PV technologies.

     Through intensive research and design efforts we have significantly enhanced our wafer manufacturing technology and our ability to manufacture multi-crystalline silicon wafers. Our Devens facility is using our quad wafer furnace equipment, which grows four thin strips of multi-crystalline silicon from one furnace as compared to the dual strip furnaces historically used in the Marlboro pilot facility. Our quad wafer furnace incorporates a state of the art automated wafer cutting technology that improves our manufacturing process.

     We began production of solar panels in our first Devens facility during the third quarter of 2008. Upon reaching full production capacity, which is scheduled to occur in the second half of 2009, the Devens facility is expected to be operating at an annual production capacity of approximately 160 MW.

     Since April 2007 we have entered into multi-year silicon supply agreements with four suppliers. Silicon is the key raw material in manufacturing multi-crystalline silicon wafers. Under our silicon 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), we have silicon under contract that provides over 12,000 metric tons of silicon through 2019 including 550 metric tons in 2009. During 2009, DC Chemical is expected to provide approximately 65% of our 2009 expected requirements.

     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 primarily include on-grid generation, in which supplemental electricity is provided to an electric utility grid. Our products are currently sold to customers primarily in Europe and the United States. During the year-ended December 31, 2008 we entered into seven multi-year solar panel supply agreements, a portion of which are denominated in Euros. The combined current estimated sales value for all seven agreements is approximately $2.8 billion at December 31, 2008 exchange rates, with deliveries scheduled through 2013.

     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 $166.7 million (net of underwriting discounts). The shares of common stock were sold at a per share price to the public of $9.50. In addition, on June 26, 2008, we entered into an underwriting agreement for the sale by us to the public of $325.0 million aggregate principal amount of 4% Senior Convertible Notes due 2013. We granted to the underwriters a 30-day option to purchase up to an additional $48.75 million aggregate principal amount of the Senior Convertible Notes. On July 2, 2008, we completed our public offering of $373.75 million aggregate principal amount of the Senior Convertible Notes which included the underwriter’s exercise of their option. We received net proceeds from the offering, including the cost of the capped call transaction (see Capped Call included in Note 6 of our consolidated financial statements), of approximately $325.8 million.

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     On December 29, 2008, as part of ongoing efforts to lower overhead costs and reduce overall cash requirements, we committed to a plan to cease operations at our pilot manufacturing facility in Marlboro, Massachusetts. Production at the facility ceased on December 31, 2008. Future advanced manufacturing piloting activities will be performed at our Devens manufacturing facility. Almost all of the Marlboro pilot manufacturing facility employees have transferred to the Devens manufacturing facility to fill open positions associated with the second phase of Devens. As a result of the cessation of manufacturing in Marlboro, we recorded restructuring costs, principally non-cash charges, of approximately $30.4 million associated with the write-off of manufacturing and development equipment, inventory and leasehold improvements of the Marlboro pilot facility. We may also incur occupancy, location restoration and moving costs of approximately $4.0 to $5.0 million during 2009. We believe that closing the Marlboro pilot facility and better utilizing existing equipment and facilities at our research and development center and at our Devens manufacturing facility will result in lower overhead costs and reduce overall cash requirements.

     At December 31, 2008, we had approximately $178 million of cash, cash equivalents and marketable securities, of which approximately $23 million was due to Sovello as their sales agent. Through mid-2009, the completion of the Devens factory, the first phase of our Midland factory and debt service interest payments will require approximately $120 million, leaving approximately $35 million available to fund our operations. Throughout the first half of 2009, we expect our working capital requirements will increase substantially as production and shipments increase from our Devens facility. Assuming we are able to execute our business plan as currently envisioned, we believe that our cash on hand combined with our expected large working capital balances will provide us with sufficient liquidity or access to liquidity to fund our operations and planned capital programs for the next 12 months. We also believe that given the current state of the worldwide economy and credit markets, it is prudent to pursue short-term financing options, including but not limited to renegotiation of existing or new working capital lines of credit, in order to provide us with the most flexible liquidity protection possible. If adequate capital does not become available when needed 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 Sovello AG

     On December 19, 2006, we became equal partners in Sovello 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 Sovello under the equity method of accounting, as opposed to consolidating the operating results of Sovello as we had in the past. Under the equity method of accounting, we report our one-third share of Sovello’s net income or loss as a single line item in our statement of operations and our investment in Sovello as a single line item in our balance sheet. We began applying the equity method with respect to Sovello on December 20, 2006.

     Until December 31, 2008, we marketed and sold all solar panels manufactured by Sovello under the Evergreen Solar brand, and managed customer relationships and contracts related to the sale of Sovello manufactured product. We receive selling fees from Sovello in connection with our sales of Sovello manufactured product and do not report gross revenue or cost of goods sold resulting from the sale of Sovello’s solar panels. During 2007 and 2008, we received a fee of 1.7% and 1.6% of gross Sovello revenue relating to the sales and marketing of solar panels. In addition, we received royalty payments for our ongoing technology agreement with Sovello. Taken together, the sales and marketing fee and royalty payments totaled approximately 6.0% and 5.2% of gross Sovello revenue for fiscal 2007 and 2008, respectively. We also received payments from Sovello of approximately $1.9 million and $384,000 in fiscal 2007 and 2008, respectively, to reimburse us for certain research and development and other support costs we incurred that could benefit Sovello. Income statement classification of these research and development reimbursement payments depend on how we are reimbursed. The best efforts arrangement we maintain with Sovello 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 2008 are therefore shown as a reduction of our expenses.

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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 any known changes in their financial condition. Royalty and fee revenue are recognized at contractual rates upon shipment of product by Sovello. Product revenues represented 100%, 83% and 85% for the years ended December 31, 2006, 2007 and 2008, respectively. International product sales accounted for approximately 63%, 18% and 42% for the years ended December 31, 2006, 2007 and 2008, respectively.

     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

     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. When we recognize revenue, we accrue a liability for the estimated future costs of meeting our warranty obligations. We make and revise this estimate based on the number of solar panels shipped and our historical experience with warranty claims. During 2008, we re-evaluated potential warranty exposure as a result of the substantial increase in production volumes at our Devens, Massachusetts manufacturing facility. As such, we increased our estimated future warranty costs to approximately $1.2 million as of December 31, 2008.

     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 affected not only by our 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 our 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.

Stock-based Compensation

     We measure compensation cost arising from the grant of share-based payments to employees at fair value and 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, in accordance with the provisions of Statement of Financial Accounting Standards No. 123 — (revised 2004), “Share-Based Payment"(“SFAS 123R”). 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, 2007 and 2008, was approximately $5.1 million, $6.4 million and $7.2 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 January 1, 2006 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 prior to 2012 and 2011, respectively. Of the 1.7 million shares granted, 100,000 shares have since been cancelled due to an employee termination. 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

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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 11 of our consolidated financial statements for further information regarding our stock-based compensation assumptions and expenses.

Inventory

     Inventory is valued at the lower of cost or market determined on a first-in, first-out basis. Certain factors may impact the net 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. In addition, we have made non-refundable prepayments under several of our multi-year polysilicon supply agreements which are presented on the balance sheet in Prepaid Cost of Inventory. These prepayments will be amortized as an additional cost of inventory as we receive and utilize the silicon. The prepayments are classified as short-term based upon the value of silicon contracted to be delivered during the next twelve months. The Company carries these prepayments on its balance sheet at cost and periodically evaluates the status of the vendor’s underlying project intended to fulfill the silicon contract.

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 Sovello, and fees from Sovello for our marketing and selling activities associated with sales of product manufactured by Sovello under the Evergreen Solar brand. Product revenues consist of revenues primarily from the sale of solar cells, panels and systems. Reported product revenues represented 100%, 83% and 85% of total revenues, in 2006, 2007 and 2008, respectively. International product sales accounted for approximately 63%, 18% and 42% of total product revenues for the years ended December 31, 2006, 2007 and 2008, respectively.

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     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 Sovello 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 substantially 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 the cost 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 and qualify new facilities.

     Restructuring charges. Restructuring charges consist of costs associated with the closure of our Marlboro pilot manufacturing facility on December 31, 2008. The charges primarily include severance costs, and the write-off of manufacturing equipment, leasehold improvements and inventory.

     Other income (expense), net. 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 Sovello AG. As of December 20, 2006, we began accounting for our share of Sovello’s results under the equity method of accounting, which requires us to record our one-third share of Sovello’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, Sovello recorded approximately $1.5 million in net income, of which we recorded approximately $495,000 in our consolidated statement of operations. For the years ended December 31, 2007 and 2008, Sovello recorded approximately $6.5 million and $26.4 million in net income, respectively, of which we recorded approximately $2.2 million and $8.4 million net of withholding taxes, respectively, in our consolidated statement of operations.

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

COMPARISON OF YEARS ENDED DECEMBER 31, 2008 AND 2007

     Revenues. Our product revenues for the year ended December 31, 2008 were $95.2 million, an increase of 63% or $36.9 million from $58.3 million for the year-ended December 31, 2007. This increase in product revenues resulted from an increase in sales volume of 61%which was generated from our new Devens facility which began shipping product late in the third quarter. To a lesser extent, product revenues benefited from higher average selling prices of approximately 2% that primarily resulted from a geographic shift in sales to Europe. Royalty revenue and marketing and selling fees from Sovello for the year ended December 31, 2008 were $16.7 million, an increase 45% or $5.2 million from $11.5 million for the year ended December 31, 2007. The increase in royalty revenue and marketing and selling fees from Sovello was mainly due to the increased sales volume at Sovello which started production at its second facility in the second quarter of 2007.

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     International product revenues accounted for 42% and 18% of total product revenues for the years ended December 31, 2008 and 2007, respectively. Throughout most of 2007 orders were largely fulfilled based upon geography. More than half of the product produced at Sovello was distributed to customers in Europe and the majority of the product produced at our Marlboro facility was distributed to customers in the United States which allowed us to efficiently manage worldwide distribution of product. However, during 2008 approximately 40% of our product shipments have been to Europe in order to respond to specific customer demand. As we increase our own capacity with the completion of our Devens facility, we expect that we will continually adjust our distribution strategy as markets for solar energy rapidly develop and change.

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

	2007			2008
By geography:
United States		82	%		58	%
Germany		7	%		28	%
All other		11	%		14	%
		100	%		100	%
By customer:
SunPower Corporation		31	%		31	%
Ralos Verriebs GmbH		1	%		15	%
SunEdison		14	%		2	%
groSolar		12	%		4	%
All other		42	%		48	%
		100	%		100	%

     Cost of product revenues and gross margin. Our cost of product revenues for the year ended December 31, 2008 was $93.1 million, an increase of approximately $40.2 million, or 76%, from $52.8 million for the year ended December 31, 2007. Gross margin for the year ended December 31, 2008 was 16.9% as compared to 24.4% for the year ended December 31, 2007. The decrease in gross margin primarily resulted from higher costs associated with the initial production at our new Devens facility and lower support costs allocated to research and development supporting pilot programs. These higher costs were offset by higher royalty and selling fees associated with the increase in Sovello’s sales volume, higher silicon scrap sales and the increase in the volume of our product sales. These higher initial production costs are temporary and resulted from inefficiencies we anticipated during the initial stages of our significant capacity expansion. We do anticipate that gross margins will improve as the Devens facility continues to increase its output and expects to reach its full production capacity during the second half of 2009.

     Research and development expenses. Our research and development expenses for the year ended December 31, 2008 were $22.0 million (net of $384,000 of reimbursements from Sovello), an increase of $1.4 million, or approximately 7%, from $20.6 million (net of $1.9 million of reimbursements from Sovello), for the comparable 2007 period. The increase was primarily attributable to higher depreciation expense of approximately $4.5 million associated with the expanded R&D facilities and associated equipment additions. This increase was offset primarily by lower compensation and related costs of approximately $811,000, the majority of which relates to realignment of personnel to directly support manufacturing and the Devens ramp, lower material usage of approximately $640,000, lower travel cost of approximately $358,000 in addition to lower allocated manufacturing support costs.

     Selling, general and administrative expenses. Our selling, general and administrative expenses for the year ended December 31, 2008 were approximately $23.9 million, an increase of $3.3 million, or approximately 16%, from $20.6 million in 2007. In general, our selling, general and administrative costs have increased as a result of our overall expansion of operations. As we continue to execute our expansion plans, we expect our selling, general and administrative expenses will increase to support such growth. Specifically, the increase in selling, general and administrative expense was primarily attributable to increased compensation and related costs of approximately $840,000 associated with additional personnel,

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higher marketing and communication costs of $600,000 associated with increased advertising and the grand opening of our new Devens facility, increased IT costs of approximately $873,000 to support the growth of our operations, higher insurance costs of $264,000 associated with our expanded facilities, higher depreciation costs of $192,000, and generally higher public company and regulatory compliance fees.

     Equipment write-offs. In conjunction with refocusing our research and development efforts, we incurred charges of approximately $8.0 million during the year ended December 31, 2008 as a result of the write-off of R&D equipment that supported now-obsolete technologies.

     Facility start-up. Facility start-up costs for the year ended December 31, 2008 were approximately $30.6 million, an increase of $29.2 million from $1.4 million in 2007. These expenses, which included salaries and personnel related costs, consulting costs, recruitment costs, consumable material costs, and miscellaneous other costs, were associated with the start-up of our new facility in Devens, Massachusetts on which construction began in September 2007 with the first solar panels produced late in the third quarter of 2008. In addition, these charges include similar costs associated with the start-up of our new manufacturing facility located in Midland, Michigan. When the Devens facility is completed in 2009, we expect that our total start up costs for Devens will be approximately $35 million. String factory start up in 2009 is expected to be approximately $6.0 million.

     Restructuring charges. We recorded a charge to continuing operations, principally non-cash, of approximately $30.4 million for the year ended December 31, 2008. These charges were incurred in conjunction with the closing of our Marlboro, Massachusetts pilot manufacturing facility on December 31, 2008, part of our ongoing efforts to lower overhead costs and reduce overall cash requirements. Virtually all of the Marlboro pilot manufacturing facility employees have transferred to the Devens manufacturing facility to fill open positions associated with its second phase. Future advanced manufacturing piloting activities will be performed at our Devens manufacturing facility. The charges we recorded were comprised primarily of leasehold improvements and other related building costs of $5.4 million, equipment of approximately $20.9 million, inventory and spare parts of $3.9 million, and salaries and personal related costs associated with severance of approximately $0.2 million. We may also incur occupancy, location restoration and moving costs of approximately $4.0 to $5.0 million during 2009.

     Other income (expense) net. Other income, net of $2.7 million for the year ended December 31, 2008 comprised $12.7 million in interest income, offset by $4.1 million of net foreign exchange losses, and $5.9 million in interest expense. Other income, net of $6.8 million for the year ended December 31, 2007 comprised $444,000 net foreign exchange gains, $9.8 million in interest income, and $3.4 million in interest expense. The increase in net foreign exchange losses was due to the timing of our Euro denominated transactions in addition to the mark-to-market adjustment on our Euro denominated loan to a silicon supplier. The increase in interest income is attributable to our higher average cash balance that resulted from the cash raised from our equity offering in the first quarter of 2008 and the senior convertible notes offering during the third quarter of 2008, in addition to interest earned on our loans receivable. The higher interest expense is attributable to our higher debt obligations which increased by approximately $284 million to support our capacity expansion plans offset by a slightly lower interest rate on the new borrowings and higher capitalized interest costs resulting primarily from the on-going construction of our Devens facility and our new facility in Midland, Michigan.

     Equity income from interest in Sovello AG. Equity income from our interest in Sovello of $8.4 million, net of withholding taxes, for the year ended December 31, 2008, which represents our one-third share of Sovello’s net income, increased $6.3 million over the year ended December 31, 2007. The increase in Sovello’s net income resulted primarily from incremental production volume associated with its expanded facilities.

     Net loss. As a result of the foregoing, net loss was $84.9 million for the year ended December 31, 2008 ($0.65 net loss per share, basic and diluted) compared to a net loss of $16.6 million for the year ended December 31, 2007 ($0.19 net loss per share, basic and diluted).

COMPARISON OF YEARS ENDED DECEMBER 31, 2007 AND 2006

     Through December 19, 2006, we owned 64% of Sovello and consolidated the financial statements of Sovello. As a result of our reduction in ownership in Sovello to one-third on December 19, 2006, we have applied the equity method of accounting for our share of Sovello’s operating results from December 20, 2006. This change in accounting has significantly impacted year-over-year comparability.

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     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 was attributable to Sovello product revenues, which we consolidated with our product revenues through December 19, 2006 but are not consolidated with our product revenues in 2007. Sovello, 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 Sovello in 2007 of approximately $11.5 million.

     In order to efficiently manage worldwide distribution of product manufactured based on our proprietary technology, we fulfill orders largely based on geography. More than half of the product produced at Sovello is distributed to customers in Europe and the majority of the product produced at our Marlboro facility was 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 Sovello which began product shipments in the second quarter of 2006 and primarily fulfilled European customer orders in 2007.

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

	2006			2007
By geography:
United States		37	%		82	%
Germany		48	%		7	%
Spain		13	%		—
All other		2	%		11	%
		100	%		100	%
By customer:
SunPower Corporation		10	%		31	%
SunEdison		—			14	%
groSolar		6	%		12	%
Donauer Solartechnik		13	%		1	%
All other		71	%		42	%
		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 Sovello. None of Sovello’s cost of product revenue was 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 Sovello 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 was to develop and prototype new manufacturing process technologies which, when developed, would be employed in new factories. As such, our manufacturing costs incurred in Marlboro were substantially burdened by additional engineering costs and also reflected inefficiencies typically inherent in pilot and development operations.

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     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 Sovello), an increase of $2.2 million, or 12%, from $18.4 million for the same period in 2006. The increase was 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. Sovello 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 Solar with a new logo, and increased insurance and legal costs associated with the growth of our operations and routine regulatory filings were incurred.

     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 was 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 Sovello loan facility with Deutsche Bank, which we consolidated with our interest expense for the year ended December 31, 2006 but was not consolidated with our interest expense in the comparable period in 2007. In addition, we had higher capitalized interest costs in 2007 associated with our on-going infrastructure improvement initiatives.

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

     Net loss. As a result of the foregoing, net loss was $16.6 million for the year ended December 31, 2007 ($0.19 net loss per share, basic and diluted) compared to a net loss of $26.7 million for the year ended December 31, 2006 ($0.41 net loss per share, basic and diluted).

LIQUIDITY AND CAPITAL RESOURCES

     We have historically financed our operations and met our capital expenditure requirements primarily through sales of our capital stock, issuance of debt and, to a lesser extent, product revenues; and beginning in 2007, fees from Sovello for our marketing and sale of Sovello panels and royalty payments for our technology contribution to Sovello. Research and development expenditures have historically been partially funded by government research contracts. At December 31, 2008, we had working capital of $156.8 million, including cash, cash equivalents and marketable securities of $177.5 million.

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     Net cash used in operating activities was $10.3 million, $12.0 million and $65.9 million for the years ended December 31, 2006, 2007 and 2008, respectively. The use of cash for operating activities in the year ended December 31, 2008 was due primarily to losses from our operations of $34.1 million, net of non-cash charges, increases in inventory levels of $15.4 million as we begin to scale Devens, increases in prepaid cost of inventory of $39.3 million which was mainly the result of nonrefundable payments required under our silicon supply agreements, and increases in our accounts receivable of approximately $26.2 million associated with our increase in revenue. These uses were offset by the receipt of $19.9 million of grants, an increase in other current liabilities of $10.0 million due to the timing of payments, and a decrease in other current assets of $9.1 million, the majority of which relates to the refund of VAT taxes. 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 Sovello as the first manufacturing facility ramped to full production by the end of the third quarter of 2006.

     Net cash used in investing activities was $85.5 million, $140.5 million and $355.4 million for the years ended December 31, 2006, 2007 and 2008, respectively. The net cash used in each of these years was primarily due to purchases of equipment and marketable securities, in addition to the construction of our manufacturing facility in Devens, Massachusetts most of which occurred in 2008. These use of funds were offset by proceeds from the sale and maturity of marketable securities. In addition, during the year ended December 31, 2008 two loans totaling $23.8 million were advanced to Sovello. As part of our silicon supply agreement with Silpro we provided a loan to them of Euro 30 million. The first installment of approximately $21.9 million was advanced to them at the end of 2007 and the second installment of $22.2 million advanced to them during 2008. Also, during the year ended December 31, 2007, we deposited approximately $41.0 million with Deutsche Bank associated with the guarantee of a Sovello loan. The restriction on the deposit, which was reported as restricted cash on our December 31, 2007 balance sheet, was released in 2008. As of December 31, 2006, we no longer consolidate the balance sheet of Sovello and therefore, our cash balance at December 31, 2006 excludes Sovello’s cash balances, and the decrease in Sovello’s cash balance is reflected as a use of cash in investing activities.

     Capital expenditures were $107.7 million, $50.7 million and $345.3 million for the years ended December 31, 2006, 2007 and 2008, respectively. Capital expenditures for the year ended December 31, 2006 were primarily for equipment needed for our Marlboro manufacturing facility and equipment for Sovello. The 2007 and 2008 expenditures were primarily for facility improvements and equipment for our Marlboro manufacturing facility in addition to expenditures for the construction of our new Devens, Massachusetts manufacturing facility which will ultimately increase our production capacity in Massachusetts to 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 has provided a low-cost, 30-year land lease in addition to approximately $20.0 million in grants. During 2008, we also began construction of our new high temperature filament manufacturing facility in Midland, Michigan. As of December 31, 2008, we had outstanding commitments for capital expenditures of approximately $60.4 million. Most of our commitments for capital expenditures are associated with our new Devens and Midland facilities.

     Net cash provided by financing activities was $75.0 million, $175.1 million and $492.8 million for the years ended December 31, 2006, 2007 and 2008, respectively. The cash provided by financing activities for the year ended December 31, 2008 resulted primarily from net proceeds of $364.0 million from the issuance of our senior convertible debt offering which closed during the third quarter of 2008 and the net proceeds of 18.4 million shares of our common stock sold in a public offering at $9.50 per share which closed in February 2008. These proceeds were offset by the up-front initial premium payment of $39.5 million associated with the capped call which was entered into concurrent with the senior convertible debt offering. 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 of our common stock were sold to DC Chemical for $12.07 per share in conjunction with a stock purchase agreement. The cash provided by financing activities for the year ended December 31, 2006 primarily represents an increase in Sovello debt through December 19, 2006 and cash received upon the exercise of stock options and warrants.

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     On June 26, 2008, we entered into an underwriting agreement for the sale to the public of $325.0 million aggregate principal amount of 4% Senior Convertible Notes due 2013 (or Senior Notes). We granted to the underwriters a 30-day option to purchase up to an additional $48.75 million aggregate principal amount of Senior Notes. On July 2, 2008, we completed the public offering of $373.75 million aggregate principal amount of Senior Notes which includes the underwriter’s exercise of their option. Net proceeds to us from the offering, including the cost of the capped call transaction, were approximately $325.8 million. Our financing costs associated with the Senior Notes are being amortized over the five year term.

     In June 2005, we issued convertible subordinated notes (or Notes) in the aggregate principal amount of $90.0 million with interest on the Notes payable semiannually at an annual rate of 4.375%. We had received proceeds of $86.9 million, net of offering costs, and the financing costs of approximately $3.1 million were being amortized over the seven year term of the Notes. All of the Notes were converted to shares of our common stock and we issued 12,178,607 shares of common stock to the note holders on July 22, 2008.

     For the years ended December 31, 2006, 2007 and 2008, we recorded approximately $3.6 million, $3.0 million and $5.4 million, respectively, in interest expense associated with the Notes and Senior Notes, net of capitalized interest of approximately $350,000, $983,000 and $5.0 million, respectively.

     In connection with our Senior Notes offering, we entered into a capped call transaction with respect to our common stock, the Capped Call, with an affiliate of the lead underwriter in order to reduce the dilution that would otherwise occur as a result of new common stock issuances upon conversion of the Senior Notes. The Capped Call was designed to reduce the potential dilution resulting from the conversion of the Senior Notes into shares of our common stock. The total premium for the Capped Call was approximately $68.1 million of which $39.5 million was paid contemporaneously with the closing of the Senior Notes offering and the remaining $28.6 million was required to be paid in nine equal semi annual installments beginning January 15, 2009. In addition, we entered into a common stock lending agreement with a second affiliate of the lead underwriter pursuant to which we loaned 30,856,538 shares of our common stock to this affiliate. These shares were considered issued and outstanding for corporate law purposes at the time they were loaned; however, at the time of the loan they were not considered outstanding for the purpose of computing and reporting earnings per share because these shares were to be returned to us no later than July 15, 2013, the maturity date of the Senior Notes. On September 15, 2008 and October 3, 2008, respectively, the lead underwriter and its affiliate filed for protection under Chapter 11 of the federal Bankruptcy Code. The bankruptcy filings represented events of default under the Capped Call. As a result of the defaults, our obligations under the agreement were suspended and the remaining premium liability was reversed against equity. In the event the defaults are cured, the remaining premium liability would be owed pursuant to the installment payment schedule. Unless we choose to implement a new capped call arrangement or the defaults are cured and we do not terminate the Capped Call as we believe we are entitled to under the terms of the Capped Call, the dilutive impact of conversion of the Senior Notes may be greater, based on the actual conversion price of $12.11 per share. The bankruptcy filing and the placement of the second Lehman affiliate into administration in the United Kingdom also contractually required the lead underwriter’s second affiliate to return to us the shares loaned under the common stock lending agreement. We have since demanded the return of all outstanding borrowed shares, however, the shares have not yet been returned. While we are exercising all of our legal remedies, including litigation against various Lehman Brothers entities and Barclays entities, we have included these shares in our per share calculation on a weighted average basis due to the uncertainty surrounding the recovery of the shares.

Sovello Debt Guarantee and Undertaking

     On April 30, 2007, we entered into a Guarantee and Undertaking Agreement with Q-Cells and REC in connection with Sovello entering into a loan agreement with a syndicate of lenders led by Deutsche Bank AG, (the Guarantee). The loan agreement provides Sovello with aggregate borrowing availability of up to 142.0 million Euros. Pursuant to the Guarantee, we along with Q-Cells and REC, each agreed to guarantee a one-third portion of the loan outstanding, up to 30.0 million Euros of Sovello’s repayment obligations

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under the loan agreement. At December 31, 2007 we had $41 million deposited in a Deutsche Bank account fulfilling our obligation under the Guarantee, which was classified as restricted cash on the balance sheet. Effective September 30, 2008 the Guarantee and associated restriction on our $41 million of cash deposited with Deutsche Bank were released. As of December 31, 2008, the total amount of debt outstanding under the loan agreement was 121.0 million Euros (approximately $168.4 million at December 31, 2008 exchange rates) of which 83.5 million Euros was current (approximately $116.2 million at December 31, 2008 exchange rates). Repayment of the loan is due in quarterly installments through December 31, 2011.

     In October 2008 in connection with a bank loan to Sovello, we provided an Undertaking to the bank syndicate that may require us to provide additional funding to Sovello under the following circumstances:

     • in the event that the cost of completing Sovello 3 exceeds budget;

     • if any government grants are required to be repaid by Sovello or are not provided to Sovello as previously approved; or

     • under certain conditions, in the event that Sovello is in violation of its financial covenants associated with its loan with the bank syndicate.

      As of December 31, 2008, Sovello is in violation of one of its bank loan financial covenants. The financial covenant violation allows the bank to exercise its termination rights and call the loan. However, the bank has temporarily waived the financial covenant violation and is negotiating with Sovello and its shareholders to amend the loan agreement. In accordance with an Undertaking made by us to the bank, we could be required to provide our pro rata share of any additional funding required to complete Sovello 3 under certain circumstances. Based on the current negotiation with the bank, we anticipate providing additional funds to Sovello in the form of a loan or additional equity investment. If we, Sovello, and Sovello’s other shareholders cannot obtain an amendment to Sovello’s loan agreement, this could adversely impact Sovello’s liquidity, require us to make additional investments in Sovello and potentially impact the net realizable value of our investment in Sovello.

     For additional information regarding the Undertaking, the grants and potential obligations to fund Sovello see Note 5 to our consolidated financial statements.

Evergreen Solar Loans to Sovello

     In January 2007, we, REC and Q-Cells entered into a new shareholder loan agreement with Sovello. Under the terms of the shareholder loan agreement, Sovello repaid all outstanding shareholder loans at that time, plus accrued interest, in exchange for a new shareholder loan of 30 million Euros from each shareholder. In addition, we, REC and Q-Cells entered into a shareholder agreement with Sovello in June 2008 for a total of approximately 11.7 million Euros from each shareholder with our share denominated in U.S. dollars. Also in December 2008, we, REC and Q-Cells entered into an additional shareholder agreement with Sovello for a total of approximately 8.0 million Euros from each shareholder with our share denominated in U.S. dollars. As of December 31, 2008 we had advanced one half of the dollar denominated 8.0 million Euros. The table below summarizes the principal and terms of our share of these outstanding loans as of December 31, 2008:

Date of Loan	Principal (EUR)		Principal (USD)		Interest Rate			Original Date Due
January 25, 2007	€	30,000,000	$	41,757,000		5.43	%	December 31, 2009	*
June 26, 2008	€	—	$	18,174,000		6.71	%	December 31, 2009	*
December 22, 2008	€	—	$	5,600,000		6.00	%	June 30, 2010	*

*    Due upon the earlier of the completion of an initial public offering or other liquidity event generating sufficient cash to repay the loan.

Liquidity Risk and Uncertainty

      At December 31, 2008, we had approximately $178 million of cash, cash equivalents and marketable securities, of which $23 million was due to Sovello that we collected as Sovello’s sales agent. Through mid-2009, the completion of the Devens factory, the first phase of the Midland factory and debt service interest payments will require about $120 million, resulting in a cash balance available to support operations of approximately $35 million.

      Although our current business plan indicates we will have adequate liquidity for the next 12 months, we are subject to risks common to companies in the high-technology and alternative energy industry including, but not limited to, the difficulty of successfully developing new technological innovations, competition from a number of qualified and better-funded companies, dependence on key personnel, dependence on key or sole source suppliers for materials, the challenge of protecting proprietary technology and complying with government regulations

      We have incurred net losses from operations and negative cash flow from operations since inception. We plan to increase our Devens production significantly in 2009, from 8.5 MW in the fourth quarter of 2008 to approximately 17 MW in the first quarter of 2009, 30 MW in the second quarter, and between 35 MW to 40 MW in both the third and fourth quarters, resulting in annual production of between 125 MW to 130 MW.

      We have sales contracts for approximately 80 MW of product to be manufactured at our Devens facility for delivery in 2009 at an average selling price of approximately $3.20 (assuming a U.S. dollar/Euro exchange rate of 1.25), which is about 10% less than our average selling price of about $3.55 in 2008. Our sales plan assumes there should be sufficient market demand to sell the remaining expected Devens manufacturing capacity. We expect to moderate our production levels depending on changes in market demands as the year progresses.

      We also plan to significantly reduce our manufacturing cost from approximately $3.50 per watt in the fourth quarter of 2008 to approximately $2.00 per watt by the end of 2009, primarily through increased volume and improved yields and cell conversion efficiency.

      We believe that our business plan will provide sufficient cash, cash equivalents and marketable securities to fund our planned capital programs, our share of any potential funding requirements related to our investment in Sovello and our operating needs for the next 12 months. While our business plan anticipates certain levels of potential risk, particularly in light of the difficult and uncertain current economic environment, we are exposed to particular risks and uncertainties including, but not limited to:

     • possible delays in the completion of our Devens plant, budget overruns or failure to meet expected production levels;

     • selling less than approximately 90 MW to 110 MW of Devens manufactured product at an average selling price of $2.90 to $3.10 per watt to credit worthy customers;

     • higher than planned manufacturing costs and failing to achieve expected Devens operating metrics, with any delays in our plan to scale capacity resulting in increased costs that could impair business operations;

     • further weakening of the Euro against the U.S. dollar, as a substantial portion of the contracted sales are denominated in Euros; and

     • increased funding requirements for Sovello to complete its third manufacturing facility and achieve its planned manufacturing cost and operating metrics, or to potentially address the loss of any prior or expected government grant funding for Sovello.

      Although our current business plan indicates we have adequate liquidity to operate under expected operating conditions, the risks noted above could result in liquidity uncertainty. Our plan with regard to this uncertainty includes, among other actions:

     • continually monitoring our operating results against expectations and, if required, further restrict operating costs and capital spending if events warrant;

     • possibly hedging our exposure to fluctuations in the U.S. dollar / Euro exchange rate to limit any adverse exposure, but there can be no assurance that hedges can be put in place at terms acceptable to us or that such hedging activities will be effective; and

     • negotiating with a number of banks to secure a borrowing base line of credit, without a minimum cash requirement, as is the case with our current line of credit, supported by the expected significant increase in our accounts receivable, inventory and overall working capital.

      If adequate capital does not become available if needed on acceptable terms, our ability to fund operations, further develop and expand our manufacturing operations and distribution network or otherwise respond to competitive pressures would be significantly limited.

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Contractual Obligations

     The following table summarizes our contractual obligations as of December 31, 2008 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	$	7,653	$	3,191	$	4,101	$	361	$	—
Maturity of Senior Convertible Debt		373,750		—		—		373,750		—
Interest expense associated with Senior Convertible Debt		75,290		15,490		44,850		14,950		—
Capital expenditure obligations		60,406		60,406		—		—		—
Raw materials purchase commitments		770,533		64,496		332,408		224,987		148,642
Total contractual cash obligations	$	1,287,632	$	143,583	$	381,359	$	614,048	$	148,642

     In January 2008, we entered into a second multi-year silicon supply agreement with one of our suppliers. The supply agreement provides the general terms and conditions pursuant to which the supplier will supply us with specified annual quantities of silicon at fixed prices beginning in 2009 and continuing through 2015. We made non-refundable prepayments totaling approximately $36.5 million in connection with this Agreement that will be amortized as an additional cost of inventory as silicon is delivered by the supplier and utilized by us. The prepayment is included in the balance sheet in Prepaid Cost of Inventory.

     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 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 the Company’s 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.

     On July 24, 2007, we entered into a multi-year polysilicon supply agreement with 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 in 2007. An additional prepayment of $5.0 million was made in 2008.

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     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 was disbursed to Silpro during the first quarter of 2008. The loan and interest are due within five years from the disbursement date of the second installment.

INCOME TAXES

     As of December 31, 2008, we had federal and state net operating loss carryforwards of approximately $146.3 million and $103.4 million, respectively, available to reduce future taxable income which begin to expire in 2009. In addition, we have excess tax deductions related to equity compensation of approximately $24.4 million of which the benefit will be realized when it results in a reduction of taxable income in accordance with SFAS 123R. We also has federal and state research and development tax credit carryforwards of approximately $3.1 million and $1.3 million, respectively, which begin to expire in 2018 and state Investment Tax Credit carryforwards of approximately $7.8 million which begin to expire in 2009, available to reduce future tax liabilities. Under the provisions of the Internal Revenue Code, certain substantial changes in the Company’s ownership may result in a limitation on the amount of net operating loss carryforwards and research and development credit carryforwards which can be used in future years.

     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, 2008, 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 June 2008, the FASB issued FSP EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities” (“FSP EITF 03-6-1”). FSP EITF 03-6-1 clarified that all outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends participate in undistributed earnings with common shareholders. Awards of this nature are considered participating securities and the two-class method of computing basic and diluted earnings per share must be applied. FSP EITF 03-6-1 is effective for fiscal years beginning after December 15, 2008. We are currently assessing the impact of FSP EITF 03-6-1 on our consolidated financial position and results of operations.

     In May 2008, the FASB issued FSP No. APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)” (“FSP No. APB 14-1”), which clarifies the accounting for convertible debt instruments that may be settled in cash (including partial cash settlement) upon conversion. The FSP No. APB 14-1 requires issuers to account separately for the liability and equity components of certain convertible debt instruments in a manner that reflects the issuer’s nonconvertible debt (unsecured debt) borrowing rate when interest cost is recognized. The FSP No. APB 14-1 requires bifurcation of a component of the debt, classification of that component in equity and the accretion of the resulting discount on the debt to be recognized as part of interest expense in a company’s consolidated statement of operations. The FSP No. APB 14-1 requires retrospective application to the terms of instruments as they existed for all periods presented. The FSP No. APB 14-1 is effective as of January 1, 2009 and early adoption is not permitted. We believe that FSP No. APB 14-1 is applicable to our 2008 Senior Convertible Notes which will primarily result in the recognition of additional interest expense. As a result, the adoption will be reflected in our first quarter 2009 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” (“SFAS No. 159”). 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. We adopted SFAS No. 159 effective January 1, 2008. Upon adoption, we did not elect the fair value option for any items within the scope of SFAS No. 159 and, therefore, the adoption of SFAS No. 159 did not have an impact on our consolidated financial statements.

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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

As we expand our manufacturing operations and distribution network internationally, our exposure to fluctuations in currency exchange rates may increase.

During 2007 and 2008, we entered into multi-year silicon supply agreements with four suppliers. The agreements have varied start and end dates. Additionally, from time to time we may agree to purchase equipment and materials internationally with delivery dates as much as six to twelve months in the future.

For the year ended December 31, 2008, approximately 38% of our product revenues were denominated in Euros. The portion of our sales that are denominated in Euros are expected to increase in future periods. During the year ended December 31, 2008 we entered into seven multi-year solar panel supply agreements, a portion of which are denominated in Euros. The combined current estimated sales value for all seven agreements is approximately $2.8 billion at December 31, 2008 exchange rates. These panel supply agreements provide the general terms and conditions pursuant to which certain customers will purchase from us specified annual quantities of solar panels which began in the second half of 2008 and continue through 2013.

We endeavor to denominate the purchase price of our equipment and materials and the selling price for our products outside of the European Union in U.S. dollars but are not always successful in doing so. To the extent that our purchases or sales are made in foreign currency, we will be exposed to currency gains or losses.

To date, we have not entered into any hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may enter into hedging transactions in the future, given that the availability and effectiveness of these transactions may be limited, we may not be able to successfully hedge our exposure.

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.

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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, 2008. 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.

Internal Control Over Financial Reporting

     During the fiscal quarter ended December 31, 2008, 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, 2008.

     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, 2008 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 2009 Annual Meeting of Stockholders on or about June 17, 2009.

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PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     Set forth below is certain information regarding our directors and executive officers. The age of each director and executive officer listed below is given as of January 31, 2009. Our stockholders elect members of the Board of Directors to serve until their respective successors are elected and qualified or until earlier resignation or removal.

Name	Age		Position
Richard M. Feldt		57	Chief Executive Officer, President and Chairman of the Board of Directors
Rodolfo Archbold		54	Vice President, Operations
Dr. J. Terry Bailey		54	Senior Vice President, Marketing and Sales
Richard G. Chleboski		43	Vice President, Strategy and Business Development
Michael El-Hillow		57	Chief Financial Officer and Secretary
Gary T. Pollard		49	Vice President, Human Resources
Carl Stegerwald		57	Vice President, Construction Management and Facilities Engineering
Dr. Brown F. Williams		68	Vice President, Science and Engineering
Tom L. Cadwell (1)(2)		63	Director
Allan H. Cohen (1)(3)		58	Director
Dr. Peter W. Cowden (2)(3)		57	Director
Edward C. Grady (1)(2)(3)		61	Lead Outside Director
Dr. Susan F. Tierney (2)		57	Director

(1)	Member of the Audit Committee.
(2)	Member of the Nominating and Corporate Governance Committee.
(3)	Member of the Compensation Committee.

Class III Directors (Term Expiring in 2009):

     Tom L. Cadwell has served as a director since April 2007. Mr. Cadwell is currently President and Chief Executive Officer of Confluence Solar, Inc., a private company formed to provide substrate materials to the solar industry. He has also served as the Executive Vice Chairman of the Board of Directors of Integrated Materials, Inc., a manufacturer of pure polysilicon products vital to semiconductor diffusion processes, since December 2006. From December 2002 until November 2006, Mr. Cadwell served as the President and Chief Executive Officer of Integrated Materials, Inc. From 2000 until February 2002, Mr. Cadwell served as the President and Chief Executive Officer of Tecstar, Inc., or Tecstar, a leader in metal organic chemical vapor deposition processes for solar cells for satellite power systems as well as light emitting diodes for leading edge applications. Prior to joining Tecstar, Mr. Cadwell held executive level positions in the semiconductor equipment and silicon wafer industries. Mr. Cadwell holds an MBA from Saint Louis University and a BS in Civil Engineering from the University of Missouri at Rolla.

     Dr. Peter W. Cowden has served as a director since October 2006. Dr. Cowden is the Founder and President of EDI, an executive level coaching and organizational consulting firm. His clients include Fortune 500 companies, venture backed startups and private equity firms. He started EDI in February 1998. Dr. Cowden’s corporate career includes five years as a corporate human resource executive with Eastman Kodak Company. Dr. Cowden has also held senior human resource positions with Agfa/Compugraphics and Stone & Webster Engineering Corporation. Dr. Cowden received his doctorate degree from Harvard University in 1977, a master’s degree from Yale University in 1976 and a bachelor’s degree from Claremont Men’s College in 1972.

     Class I Directors (Term Expiring in 2010):

     Richard M. Feldt has served as President and Chief Executive Officer and a director since December 2003 and Chairman of the Board of Directors since January 2007. Previously, he was employed by Perseid, a developer of optical phased array technology created by Raytheon, where he served as Chief Executive Officer in 2002. From 2000 to 2001, Mr. Feldt served as Chief Operating Officer of SupplierMarket.com, a B2B internet supply chain management company that was sold to Ariba. From 1995 to 2000, Mr. Feldt was Senior Vice President and General Manager of Worldwide Operations at Symbol Technologies, a data transaction systems company. In addition, Mr. Feldt has held senior positions at A.T. Cross Company, Eastman Kodak Company and Spectra-Physics, Inc. and has served as a director of ICF International Inc since March 2008. He received a BS in Industrial Engineering from Northeastern University.

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     Edward C. Grady has served as a director since September 2005. Mr. Grady was President and Chief Executive Officer of Brooks Automation, Inc., or Brooks, from October 2004 to September 2007 and a director of Brooks from September 2003 to February 2008. From February 2003 until October 2004, Mr. Grady was President and Chief Operating Officer of Brooks. From October 2001 until February 2003, Mr. Grady served as a consultant to Brooks. From September 2000 until January 2003, Mr. Grady was a principal at Propel Partners LLC, an investment firm headquartered in Palo Alto, California. From December 1994 through February 2003, Mr. Grady served in a variety of positions for KLA-Tencor Corp., including Executive Senior Business Advisor from September 2001 until February 2003 and Executive Group Vice President from March 1998 until September 2001. Prior to joining KLA-Tencor Corp., Mr. Grady was the President and Chief Executive Officer of Hoya Micro Mask. Mr. Grady also currently serves on the board of directors of Verigy Ltd, Molecular Imprints, Inc., Integrated Materials Inc. and Electro Scientific Industries Inc. Mr. Grady received his MBA from the University of Houston in 1980 and a BS in Engineering from Southern Illinois University in 1972.

Class II Director Nominee (Term Expiring in 2011):

     Allan H. Cohen has served as a director since September 2005. Mr. Cohen has been since May 2002, and continues to be, a senior member of the restructuring team of Arthur Andersen LLP, or Andersen, serving as one of a small number of individuals responsible for the winding down of Andersen’s professional services activities. Mr. Cohen was a partner with Andersen from 1984 through August 2002, serving in a variety of management roles. From 1996 to 2002, he served as the Tax Practice Director for Andersen’s northeast region (consisting of New York, New Jersey and New England) practice. From 1997 to 2002, Mr. Cohen served on both U.S. and global leadership teams with additional responsibility for knowledge and technology needs for Andersen Worldwide Societe Cooperative’s tax and legal practices. In April 2008, Mr. Cohen became the Director of Risk Management for Vitale, Caturano & Company, P.C., New England’s largest independent CPA firm, with responsibility for oversight of the firm’s compliance with its professional practice responsibilities. Since July 2005, Mr. Cohen has served on the board of directors of Plexus Financial Technologies, LLP, an early stage financial services software company. He is the immediate Past President of Temple Shalom of Newton, an 850 member Reform Jewish Congregation in the suburban Boston area. Mr. Cohen received his MBA from Rutgers Graduate School of Management in 1973 and his BA in Economics, with honors, from Rutgers College in 1972. Mr. Cohen is a Certified Public Accountant.

     Dr. Susan F. Tierney has served as a director since August 2008. Dr. Tierney has served as a Managing Principal since July 2003 at Analysis Group, an economic, financial, and business strategy consulting group, where she specializes in energy industry issues. Prior to joining Analysis Group, she served as a senior vice president from November 1995 to July 2003 at Lexecon, Inc. (formerly The Economics Resource Group, Inc.), an economic and strategy consulting company. Since June 2007, Dr. Tierney has served as a director of Renegy Holdings, Inc., a biomass to electricity company that is the successor to Catalytica Energy Systems, Inc. where she had served as a director since December 2001. Dr. Tierney is also chairperson of the Board of Directors of The Energy Foundation and Clean Air-Cool Planet, non-profit organizations; she also serves as a director of the Northeast States Center for a Clean Air Future. Additionally, she previously served as a director of the following non-profit organizations: American Council on Renewable Energy (ACORE) and Climate Policy Center. From 2002 to 2004, she served as chairperson of the board for the Electricity Innovations Institute (a subsidiary of the Electric Power Research Institute, Inc. (EPRI)), and she was a director of EPRI from 1998 to 2003 and from 2005 to 2006. From 1993 to 1995, she served as Assistant Secretary for Policy at the U.S. Department of Energy. Prior to her service at the Department of Energy, she held various positions in energy and environmental departments in the Commonwealth of Massachusetts from 1982 to 1993, including Secretary for Environmental Affairs and Commissioner of the Department of Public Utilities. She was an assistant professor at the University of California, Irvine from 1978 until 1982. Dr. Tierney received her doctorate and master’s degrees in regional planning from Cornell University, in 1980 and 1976, respectively, and her bachelor’s degree from Scripps College in 1973.

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Non-Director Executive Officers:

     Rodolfo Archbold has served as our Vice President, Operations since July 2007. Prior to joining us, Mr. Archbold served as an independent consultant to OEM’s and contract manufacturing companies from September 2006 to June 2007. He served as an operations consultant at Teradyne, Inc., a manufacturer of semiconductor test equipment, from September 2004 to September 2006. From September 2002 to March 2005, he served as vice president of technology and business development at NYPRO, a plastic injection molding company. Prior to joining NYPRO, Mr. Archbold served as Executive Vice President of Manufacturers Services Limited from December 1997 to March 2002, and Vice President of Manufacturers Services Limited from October 1995 to December 1997. In addition, he served as a Director of Mid-Range Service Products at Hewlett-Packard/Digital Equipment Corporation from October 1983 to October 1995. Mr. Archbold received a BS in Chemical Engineering from the University of Puerto Rico and an MBA from New York University.

     Dr. J. Terry Bailey has served as Senior Vice President, Marketing and Sales since August 2004. Prior to this position, Dr. Bailey was a consultant for GE Power Systems from April 2004 to August 2004. From February 2003 to April 2004, Dr. Bailey served as Vice President of Marketing and Sales for AstroPower, Inc., a leading solar technology supplier which filed for bankruptcy protection shortly after his commencement of employment and was acquired by General Electric in August 2004. Prior to that, Dr. Bailey served as the President and Chief Executive Officer of Solus Micro Technologies from February 1999 to November 2002. Dr. Bailey earlier served as Executive Vice President, Chief Operating Officer of NEC Technologies, Inc., or NEC Technologies, a wholly owned subsidiary of NEC Corporation. Dr. Bailey earlier served as Senior Vice President, Marketing and Sales at NEC Technologies. Prior to joining NEC Technologies, Dr. Bailey was an executive at Apple Inc., or Apple, where he served in various positions, including Senior Vice President and General Manager for Apple’s Imaging Division. Dr. Bailey received a Ph.D. in Analytical Chemistry from Florida State University, specializing in nuclear magnetic resonance research and computer system graphics integration, and he received a BS in Chemistry from the University of Alabama.

     Richard G. Chleboski has served as Vice President of Strategy and Business Development since December 2007. Prior to his current position he served as Vice President of Worldwide Expansion from February 2006 to December 2007, Treasurer from August 1994 to February 2006 and Secretary from May 2000 to February 2006. Mr. Chleboski served as Chief Financial Officer from August 1994 until February 2006. From June 1995 until May 2003, Mr. Chleboski served as one of our directors. From July 1987 until February 1994, Mr. Chleboski worked at Mobil Solar Energy Corporation, the solar power subsidiary of Mobil Corporation, where he was a Strategic Planner from March 1991 until February 1994 and a Process Engineer from 1987 until 1991. Mr. Chleboski received an MBA from Boston College and a BS in Electrical Engineering from the Massachusetts Institute of Technology.

     Michael El-Hillow served as Chairman of the Board of Directors from September 2005 to December 2006, and served as a director from August of 2004 until December 2006. Effective January 2007, Mr. El-Hillow was appointed Chief Financial Officer and Secretary, and resigned from our Board of Directors. Mr. El-Hillow was Chief Financial Officer of MTM Technologies, Inc. from January 2006 to September 2006. Mr. El-Hillow was Executive Vice President and Chief Financial Officer of Advanced Energy from October 2001 to December 2005. Prior to joining Advanced Energy, he was Senior Vice President and Chief Financial Officer of Helix Technology Corporation, a major supplier of high-vacuum products principally to the semiconductor capital equipment industry, from 1997 until 2001. Prior to joining Helix, he was Vice President of Finance, Treasurer and Chief Financial Officer at A.T. Cross Company and an audit partner at Ernst & Young. Mr. El-Hillow received an MBA from Babson College and a BS in Accounting from the University of Massachusetts and he is a Certified Public Accountant.

     Gary T. Pollard has served as Vice President, Human Resources since June 2004. Prior to joining us, Mr. Pollard worked as an independent consultant for regional and international companies in the high technology, healthcare, pharmaceuticals and food services sectors, developing hiring, recruitment and human resource programs, and designing benefit plans. From 1996 to 2002, he served as Vice President of Human Resources for The Mentor Network, a Boston-based company, which had 6,000 employees spread across 150 locations in 22 states at the time he left such company. He was also Vice President of Human Resources for Advantage Health Corporation, and Director of Human Resources for Critical Care America. He has also held positions at Signal Capital Corporation, Martin Marietta Aerospace and General Electric Information Services. Mr. Pollard received a BA in Economics from Saint Michael’s College.

     Carl Stegerwald has served as our Vice President, Construction Management and Facilities Engineering since December 2007. Prior to joining us, Mr. Stegerwald was the sole owner of North Bridge Properties, LLC, a real estate investment, development and consulting firm that provided project management services to our Devens I facility. Mr. Stegerwald served as a Senior Vice President of Meridian Investment Management, Inc., or Meridian, and directed its real estate investment and operational activities, including facilities leasing and acquisition and property management, from 1997 to 2006, and was with Meridian’s predecessor from 1996 to 1997. Prior to that, Mr. Stegerwald served for 17 years in corporate real estate planning and acquisition and design and construction with Digital Equipment Corporation. Mr. Stegerwald received a BS in Civil Engineering from Villanova University and an MBA from Northeastern University.

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     Dr. Brown F. Williams has served as Vice President, Science and Engineering since November 2004. Dr. Williams served as a director from 1999 and as Chairman of our Board of Directors from January 2004 until resigning from our Board of Directors in November 2004. From 1990 to 2003, Dr. Williams served as Chief Executive Officer and Chairman of the Board of Directors of Princeton Video Image, Inc., a company he founded in 1990. From 1988 to 1990, Dr. Williams was an independent consultant to venture capital firms. Dr. Williams has also held several research and managerial positions at RCA Laboratories from 1966 to 1998. He received his Ph.D., M.A. and A.B. degrees in Physics from the University of California Riverside and was both a University of California Regents Fellow and a National Science Foundation Fellow.

Section 16(a) Beneficial Ownership Reporting Compliance

     Section 16(a) of the Securities Exchange Act of 1934 requires our officers, directors and holders of more than 10% of our common stock to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock. Such persons, the reporting persons, are required by regulations of the SEC to furnish us with copies of all filings. Based solely on our review of the copies of such filings received by us with respect to the year ended December 31, 2008, or written representations by the reporting persons that no filings were required, we believe that all reporting persons complied with their Section 16(a) filing requirements during the year ended December 31, 2008, with the exception of Mr. Grady who reported two transactions on Form 4 late and Mr. Cohen who reported one transaction on Form 4 late. The foregoing late filings were due to errors by brokers and our staff.

Code of Business Conduct and Ethics

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

     The Code of Business Conduct and Ethics prohibits any waiver from its principles without the prior written consent of the Board of Directors. The Company intends to post on the Company’s website, www.evergreensolar.com, in accordance with the rules of the Securities and Exchange Commission any amendment of, and any waiver from, the Code of Business Conduct and Ethics that applies to our Chief Executive Officer, Chief Financial Officer, or any person performing similar functions.

Audit Committee

     The Audit Committee of the Board of Directors, established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended, currently consists of Messrs. Cohen (Chair), Cadwell and Grady. On March 11, 2008, the Board of Directors changed the composition of the Audit Committee, which previously consisted of Messrs. Cohen and Cadwell and Dr. Wilson, following Dr. Wilson’s resignation from the Board of Directors. Each of the members of the Audit Committee is independent within the meaning of our director independence standards and the applicable standards of Nasdaq and the SEC for audit committee membership. The Board of Directors has determined that Mr. Cohen is an “audit committee financial expert” under the rules of the SEC.

     The Audit Committee met five times during fiscal 2008. The Audit Committee oversees our accounting and financial functions and periodically meets with our management and independent registered public accounting firm to review internal controls over financial reporting and quarterly and annual financial reports.

     The primary functions of the Audit Committee are to (i) oversee the appointment, compensation and retention of the Company’s independent registered public accounting firm and to oversee the work performed by such accountants; (ii) establish policies for finance and accounting related consulting and advisory work, including but not limited to, tax and internal audit related issues; (iii) assist the Board of Directors in fulfilling its responsibilities by reviewing: (a) the financial reports provided by the Company to the SEC, our stockholders or to the general public, and (b) our internal controls over financial reporting; (iv) recommend, establish and monitor procedures designed to improve the quality and reliability of the disclosure of our financial condition and results of operations; and (v) establish procedures designed to facilitate (a) the receipt, retention and treatment of complaints relating to accounting, internal controls over accounting or auditing matters and (b) the receipt of confidential, anonymous submissions by employees of concerns regarding questionable accounting or auditing matters.

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     The Audit Committee operates under a written charter adopted by the Board of Directors setting out the functions the Audit Committee is to perform, which charter was originally adopted by the Board of Directors in May 2000 and restated most recently in May 2008. A current copy of the Audit Committee Charter is available under the “Investors” section of our website at www.evergreensolar.com. The charter of the Audit Committee is reviewed on an annual basis by the Audit Committee.

Director Nominations

     No material changes have been made to the procedures by which security holders may recommend nominees to our board of directors. On February 4, 2009, our Board of Directors amended Article I, Section 1.10 of our bylaws. The amendment, among other things, (i) eliminates the notice as a means to properly bring business before an annual meeting of our stockholders, (ii) further clarifies that the advance notice bylaw provisions apply to all stockholder proposals and nominations and (iii) requires our stockholders who provide advance notice of proposals or nominations to disclose additional information as part of such notice, including information as to whether the stockholder has entered into any hedging, derivative or other transactions with respect to securities issued by Evergreen Solar.

ITEM 11. EXECUTIVE COMPENSATION.

COMPENSATION DISCUSSION AND ANALYSIS

Overview

     Our executive compensation policies are designed to:

• provide compensation that attracts, motivates and retains experienced and well-qualified executives capable of helping us meet our business objectives;

• recognize and reward performance of our executive officers, both as individuals and as members of a cohesive management team, in meeting certain strategic objectives;

• align the interests of our executive team with the corporate strategies and our business objectives; and

• align the interests of our executive team with that of stockholders through long-term equity-based incentives.

     Executive Summary

     Our executive officers receive a compensation package consisting of base salary, incentive cash bonuses, long-term equity incentive awards, and participation in benefit plans generally available to all of our employees including 401(k), life, health, disability and dental insurance. We have chosen these elements of compensation to create a flexible package that reflects the long-term nature of our business and can reward both short and long-term performance of the business and of each executive officer. We also enter into employment agreements with our executive officers that provide for certain severance benefits upon termination of employment following a change of control of the Company.

     In setting executive officer compensation levels, the Compensation Committee, which is comprised entirely of independent directors, is guided by the following considerations:

• recommendations from the Chief Executive Officer based on individual executive performance and benchmarking data;

• our goal of having a portion of each executive officer’s compensation contingent upon the achievement of specific predetermined corporate objectives;

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• ensuring compensation levels reflect the Company’s past performance and expectations of future performance;

• ensuring compensation levels are competitive with compensation generally being paid to executives we seek to recruit to ensure our ability to attract and retain experienced and well-qualified executives; and

• ensuring a significant portion of executive officer compensation is paid in the form of equity-based incentives to closely link stockholder and executive interests.

     The Compensation Committee sets target and actual compensation for our Chief Executive Officer using the same considerations it uses for other executive officers.

     The Compensation Committee periodically benchmarks all of the compensation components for our executive officer pay programs with data on individuals in similar positions at other organizations. In 2008, the Compensation Committee continued to use executive compensation consulting company, Pearl Meyer & Partners (“PM&P”) to provide competitive benchmark data that the Company used to establish pay levels for Evergreen Solar’s executive management team. PM&P was retained by the Compensation Committee.

     In 2007 the Compensation Committee, with assistance from PM&P, developed a peer group of public companies for use in setting 2008 compensation. In 2008 the Committee reassessed the peer group and determined that no changes were needed. The 2008 peer group includes the following companies:

Applied Micro Circuits Corp.	First Solar, Inc.	Opnext, Inc.
Atheros Communications	Hittite Microwave Corporation	Semtech Corporation
ATMI, Inc.	MEMC Electronic Materials, Inc.	SunPower Corporation
Cree, Inc.	Microsemi Corporation	Tessara Technologies, Inc.
Energy Conversion Devices, Inc.	Monolithic Power Systems, Inc.

     The Compensation Committee, as a matter of practice, will periodically reassess the relevance of the peer group companies and will make changes when appropriate.

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Executive Compensation Philosophy

     Our executive compensation philosophy is designed to have strong pay-for-performance features. The Committee believes base salaries at the 50th percentile are appropriate as base compensation is primarily determined based on, and is representative of, past professional experience and success. By contrast, establishing target bonus compensation and equity-based compensation at the 75th percentile accomplishes the objective of providing greater incentives for the executive team to accomplish the Company’s near-term and long-term financial and strategic goals. Accordingly, the Compensation Committee generally adhered to the following precepts in establishing pay for its executive officers based on the comprehensive benchmarking study prepared by PM&P.

• Establish base salaries at the 50 ^th percentile;

• Set target total cash compensation at the 75^th percentile and set corresponding financial goals at the 75^th percentile of the market consensus amounts developed from a combination of survey and peer group data; and

• Set total direct compensation (base salary, bonus and equity) at the 75^th percentile.

Elements of Compensation

     Base Salary

     Base salaries are used to recognize the experience, skills, knowledge and responsibilities required of all our employees, including our executive officers. Fiscal 2008 base salaries for our executive officers were determined by the Compensation Committee after considering the base salary level of the executive officers in prior years, and taking into account for each executive officer the amount of base salary as a component of total compensation. Generally, salary decisions for our executive officers are made at the beginning of each fiscal year. Base salary, while reviewed annually, is only adjusted as deemed necessary by the Compensation Committee in determining total compensation. Base salary levels for each of our executive officers, other than the Chief Executive Officer, were also set based in part upon evaluations and recommendations made by the Chief Executive Officer. In addition, the Compensation Committee took into consideration the benchmarking data presented by PM&P, to generally set the base pay for each of the executive officers at the 50th percentile.

     In February 2007, the Compensation Committee increased Mr. Feldt’s base salary based on the Compensation Committee’s assessment of PM&P’s comprehensive benchmarking study which indicated that Mr. Feldt’s 2006 salary was below the market median salary for chief executive officers. The Compensation Committee then determined that it was appropriate to move Mr. Feldt’s salary to the 50^th percentile over a two-year period. Accordingly, an additional increase of Mr. Feldt’s base salary to $500,000 was approved and went into effect in February 2008.

     Fiscal 2008 base salaries for our other executive officers were determined by the Compensation Committee after considering the base salary level of the executive officers in prior years and taking into account for each executive officer the amount of base salary as a component of total compensation. Base salary levels for each of our

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executive officers, other than our Chief Executive Officer, were also based upon evaluations and recommendations made by our Chief Executive Officer. These recommendations include an assessment of the individual’s responsibilities, experience, individual performance and contribution to our performance, and also generally take into account the competitive environment for attracting and retaining executives consistent with our business needs and the base salaries of executives at our comparator group of companies as described above.

     The fiscal 2008 annual base salaries of our named executive officers were as follows:

Name	2008 Base Salary
Richard M. Feldt	$	500,000
Michael El-Hillow	$	338,000
Rodolfo Archbold	$	290,000
Carl Stegerwald	$	225,000
Dr. Brown F. Williams	$	338,000

     Annual base salaries for our executive officers are set by our Compensation Committee and generally take effect in January or February of each year. We believe that the base salaries paid to our executive officers during our fiscal year 2008 serve our executive compensation objectives, compare favorably to our comparator group of companies and, in light of our overall compensation program, are within our target of providing base compensation at the market median. In addition to the increase in Mr. Feldt’s salary described above, our other executive officers received salary increases ranging from approximately 4% to approximately 9%.

     Annual Incentive

     Annual incentives are designed to reward our executive officers for short-term financial performance and achievement of designated strategic objectives. Therefore, in determining bonus compensation for our executive officers, the Compensation Committee evaluates the achievement of corporate strategic objectives, generally set on a fiscal-year basis, as well as the actual performance of each executive officer. Future incentive compensation, if any, will be awarded based on the factors described above as well as any additional factors the Compensation Committee deems necessary. In addition the Compensation Committee took into consideration the survey data presented by PM&P to set the overall target cash compensation at the 75th percentile.

     We designed our Management Incentive Plan to focus our executives on achieving key corporate financial objectives, and to reward substantial achievement of these company financial objectives, as well as to achieve additional strategic and tactical objectives. The criteria selected linked the incentive compensation to the achievements of measurable corporate performance objectives. The following table sets forth the annual target incentive amounts under our Management Incentive Plan for each of our named executive officers (for 2008 and each year thereafter) as a percentage of base salary and the actual amounts paid based on performance in 2008.

	Target Annual			2008 Bonus
Name	Bonus			Paid in 2009
Richard M. Feldt		100	%	$	332,494
Michael El-Hillow		75	%	$	168,578
Rodolfo Archbold		75	%	$	144,634
Carl Stegerwald		75	%	$	112,216
Dr. Brown F. Williams		75	%	$	168,578

     Target cash bonus amounts were set in February 2008 at levels the Compensation Committee determined were appropriate in order to achieve our objective of retaining those executives who perform at or above the levels necessary for us to achieve our business plan, which, among other things, involves growing our company in a cost-effective way. Under our Management Incentive Plan, the Compensation Committee may award amounts in excess of or below the target bonus awards to all of our named executive officers.

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     For the 2008 annual incentive plan, 60% of the target award was dependent upon attainment of financial objectives for fourth quarter operating income for Devens and annual total company consolidated operating loss as established by the Compensation Committee. The Compensation Committee believes that the Devens operating income objective and the consolidated operating loss are the best indicators of the progress that the Company has made in advancing its growth objectives. The table below details the two financial objectives, a target goal for each financial objective and the impact that performance below and above each target goal would have on each executive officer’s award. Based on actual achievement each executive officer was able to earn more than or less than 60% of the target award - - from a threshold at 30% to the maximum at 90%. The minimum bonus is 0% of salary.

	Portion of Target Award Earned
	Threshold Goal			Target Goal			Maximum Goal
	(15% for each			(30% for each			(45% for each
2008 Financial Objectives	objective)			objective)			objective)
Fourth Quarter Devens Phase 1 Operating Income	$	4,000,000		$	8,750,000		$	11,000,000
Consolidated Annual Operating Loss	$	(70,000,000	)	$	(40,000,000	)	$	(41,400,000	)

     For 2008, 60% of the target bonus payout was dependent upon attainment of up to five key strategic company objectives, such as technology milestones, factory expansion goals, and other key strategic initiatives. The strategic objectives were the same for each executive officer and the Compensation Committee believes that these strategic objectives appropriately focus our named executive officers on improving the strategic positioning of our business. Each strategic objective was given a unique payout percentage by the Compensation Committee, based on the perceived importance to the Company of achieving the goal. Each executive officer was able to earn up to 60% of the target bonus if all strategic goals were achieved — with the lowest strategic objective payout for each goal at 5% and the highest strategic objective payout for each goal out at 20%.

     Based on a consolidated annual operating loss of $96.1 million, adjusted primarily for strategic decisions, and achieving all five of our strategic objectives, the Compensation Committee determined that each executive officer was entitled to receive 66.5% of his target bonus amount which was paid in February 2009. Further details about our Management Incentive Plan and the payments made to our named executive officers in 2008 are provided below in the “Summary Compensation Table” and “Grants of Plan-Based Awards” tables and the footnotes to each table.

     Long-Term Equity Incentive Awards

     Equity-based compensation and ownership ensures that our executive officers have a continuing stake in the long-term success of the Company. The Compensation Committee believes that equity award participation aligns the interests of executive officers with those of the stockholders. In addition, the Compensation Committee believes that equity ownership by executive officers helps to balance the short-term focus of annual incentive compensation with a longer term view and may help to retain such persons. Long-term equity incentive compensation, in the form of restricted stock awards, allows executive officers to share in any appreciation in the value of our common stock, while encouraging executive officers to remain with the Company and promote the Company’s success. When establishing equity award grant levels, the Compensation Committee considers general corporate performance, individual performance, the Chief Executive Officer’s recommendations (except with respect to the Chief Executive Officer’s own equity award grant levels), level of seniority and experience, the current stock price and a number of other factors.

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     Consistent with our target compensation objectives described above, in March 2008, our Chief Executive Officer, Chief Financial Officer, and Vice President Science & Engineering received restricted stock awards for 100,000, 40,000 and 40,000 shares, respectively. Our Vice President of Manufacturing Operations received an award of 5,000 shares in March 2008 which represents a prorated award based on his mid-year start date with the Company in 2007. Our Vice President of Construction Management and Facilities Engineering did not receive a restricted stock award in 2008 because he received an initial stock award in December 2007 in connection with his transition from a consulting role to his current position as an executive officer.

     In keeping with an industry trend towards using restricted stock awards in lieu of option grants and as a result of tax code changes in recent years, we began using restricted stock awards heavily at the end of 2006 for all of our employees and executive officers and have continued to do so since that time. The Compensation Committee has, however, continued to evaluate and may in future years provide a combination of awards, including time-based or performance-based restricted stock, stock options or other equity-based awards authorized pursuant to the Company’s current or future equity incentive plans. All of our time-based restricted stock grants, including the restricted stock awards made to the named executive officers in 2008, vest in four equal annual installments over the four year period following the grant date.

     In February 2006 and 2007, our executive officers were granted performance-based restricted stock awards which vest 100% upon the achievement of certain financial objectives within a fiscal year, including certain levels of: (a) revenue, (b) gross margin and (c) net income. These awards were established to reward our executive officers for the attainment of ambitious performance objectives. At the present time the Company believes that it is unlikely that the performance criteria for these performance-based stock awards will be achieved and, accordingly, does not expect such shares to vest. The 2006 and 2007 performance-based restricted stock awards will expire on January 1, 2011 and January 1, 2012, respectively, if they have not yet vested. Further details about the equity awards held by our Chief Executive Officer and other executive officers are provided below in the “Summary Compensation Table”, “Grants of Plan-Based Awards”, “Outstanding Equity Awards at Fiscal Year-End”, and “Option Exercises and Stock Vested” tables and the footnotes to each table.

     Other Compensation

     We also offer various broad-based employee benefit plans. Executive officers participate in these plans on the same terms as eligible, non-executive employees, subject to any legal limits on the amounts that may be contributed or paid to executive officers under these plans. We offer a stock purchase plan, under which employees may purchase shares of the Company’s common stock at a discount, and offer a 401(k) Plan, which allows employees to invest in a wide array of funds on a pre-tax basis. We also entered into change of control agreements with our executive officers providing for certain benefits which may be triggered upon a change of control and as a result of the termination of such officer’s employment following a change of control under certain circumstances. We offer no perquisites to our executive officers that are not otherwise available to all of our employees.

Executive Change of Control Severance Agreements and Other Agreements

     In 2007, we entered into change of control severance agreements with each of our executive officers. We believe these agreements enable us to retain executive officers during times of unforeseen events when the executive’s future is uncertain but continued employment of the executive may be necessary for the company. We also believe it is beneficial to have agreements in place that specify the exact terms and benefits an executive receives if we elect to separate an executive officer from the company involuntarily. We periodically review the prevalence of severance and change-of-control agreements among our comparator groups’ executives as well as the provisions of such agreements to benchmark the competitiveness of the Company’s agreements. Specifically, we reviewed the cash severance multiple, equity vesting provisions, benefit continuation practices, excise tax gross-up prevalence, and the length of the protection period in the event of a change of control. Based upon our review, we believe our agreements are generally consistent with those of our comparator groups. None of our executive change of control severance agreements are intended to provide “deferred compensation” within the meaning of Section 409A of the Internal Revenue Code and immaterial modifications were made to these agreements in December 2008 in an effort to comply with the particular requirements of Section 209A.

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     Equity Provisions

     Our agreement with Mr. Feldt provides that, if we experience a change of control, (i) all of Mr. Feldt’s outstanding equity awards will immediately vest and become exercisable or released from the Company’s repurchase or reacquisition right, and (ii) all of the performance targets for all Mr. Feldt’s performance-based equity awards will be deemed fully achieved. The agreements with our other executive officers provide that, if we experience a change of control: (i) all of the employee’s outstanding equity awards will immediately vest and become exercisable or released from the Company’s repurchase or reacquisition right as to (A) that number of unvested shares that would have vested during the period between the equity awards’ most recent vesting date (or the grant date, if no vesting date has been reached) and the change of control as if the equity awards had been granted with a monthly vesting schedule and (B) that number of unvested shares that would have otherwise vested during the last twelve months of each equity awards’ vesting schedule, and (ii) all performance targets for the executive officer’s performance-based equity awards will be deemed fully achieved on the first anniversary of the change of control if the employee is employed on such date.

     Cash Severance and Continued Benefits

     Each change of control severance agreement also provides severance benefits. If any executive officer’s employment is terminated without cause within twelve months of a change of control, or if an executive officer terminates his employment for certain reasons including a substantial reduction in salary or geographic movement within twelve months of a change of control, that executive officer will receive continued payment of his base salary and health benefits for twelve months (or eighteen months, in the case of Mr. Feldt) and his target bonus amount for the year of termination. Payment of the severance benefits under the change of control severance agreements will be delayed as required by Section 409A of the Code.

     In the event that the severance and other benefits provided for in the change of control severance agreements with Messrs. Feldt, El-Hillow and Williams constitute “parachute payments” within the meaning of Section 280G of the Code and would be subject to the excise tax imposed by Section 4999 of the Code, the executive will receive (i) a payment from the Company sufficient to pay such excise tax, and (ii) an additional payment from the Company sufficient to pay the federal and state income and employment taxes and additional excise taxes arising from the payments made to the employee by the Company. In the event that the severance and other benefits provided Messrs. Bailey and Chleboski constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code and would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code, such employee’s benefits under the Agreement shall be either delivered in full or delivered as to such lesser extent which would result in no portion of such benefits being subject to the excise tax, whichever results in the receipt by the employee, on an after-tax basis, of the greatest amount of benefits.

     We have also entered into indemnification agreements with certain of our executive officers, providing for indemnification against expenses and liabilities reasonably incurred in connection with their service for us on our behalf.

Tax Deductibility of Executive Compensation

     In general, under Section 162(m) of the Internal Revenue Code, we cannot deduct, for federal income tax purposes, compensation in excess of $1,000,000 paid to certain executive officers. This deduction limitation does not apply, however, to compensation that constitutes “qualified performance-based compensation” within the meaning of Section 162(m) of the Code and the regulations promulgated there under. The Compensation Committee considers the limitations on deductions imposed by Section 162(m) of the Internal Revenue Code, and it is the Compensation Committee’s present intention that, for so long as it is consistent with its overall compensation objectives, executive compensation paid will not be subject to the deduction limitations of Section 162(m) of the Internal Revenue Code.

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     The Compensation Committee also takes into consideration the Company Stock Ownership Guidelines which are intended to encourage executive officers to have a portion of their personal wealth tied to the Company’s share value. The Compensation Committee also considers the impact of accounting for the various elements of compensation when deciding to grant equity awards to executive officers.

REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS

     The Compensation Committee has reviewed and discussed with management the foregoing Compensation Discussion and Analysis for the year ended December 31, 2008 that precedes this report (the “CD&A”). In reliance on its reviews and discussions, the compensation committee recommended to the Board of Directors, and the Board of Directors has approved, that the inclusion of the CD&A in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 for filing with the SEC.

     No portion of this Compensation Committee Report shall be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, through any general statement incorporating by reference in its entirety the Annual Report on Form 10-K in which this report appears, except to the extent that the Company specifically incorporates this report or a portion of it by reference. In addition, this report shall not be deemed filed under either the Securities Act or the Exchange Act.

Respectfully submitted by the Compensation Committee,

THE COMPENSATION COMMITTEE

Dr. Peter W. Cowden (Chair)

Edward C. Grady

Allan H. Cohen

Compensation Committee Interlocks and Insider Participation

     No current member of the Compensation Committee or person who was a member of such committee at any time during 2008 was at any time during the past year an officer or employee of the Company (or any of its subsidiaries), was formerly an officer of the Company (or any of its subsidiaries), or had any relationship with the Company requiring disclosure herein. The Compensation Committee operates under a written charter adopted by the Board of Directors setting out the functions the Compensation Committee is to perform.

     During the last fiscal year, none of our executive officers served as (i) a member of the compensation committee (or other committee of the Board of Directors performing equivalent functions or, in the absence of any such committee, the entire Board of Directors) of another entity, one of whose executive officers served on ourCompensation Committee; (ii) a director of another entity, one of whose executive officers served on our Compensation Committee; or (iii) a member of the compensation committee (or other committee of the Board of Directors performing equivalent functions or, in the absence of any such committee, the entire Board of Directors) of another entity, one of whose executive officers served as a director of our Board of Directors.

Summary Compensation Table

     The following table sets forth the annual and long-term compensation of our Chief Executive Officer and Chief Financial officer plus each of our three other most highly compensated executive officers who were serving as executive officers as of December 31, 2008, 2007 and 2006, except for Mr. El-Hillow who only served as an executive officer in 2007 and 2008, and whose salary and bonus exceeded $100,000 for Fiscal years 2008, 2007 and 2006 (collectively, the “Named Executive Officers”).

61

Summary Compensation Table

													(h)
													Change in Pension
													Value and
											(g)		Nonqualified
											Non-Equity		Deferred		(i)
			(c)		(d)		(e)		(f)		Incentive Plan		Compensation		All Other
(a)	(b)		Salary		Bonus		Stock Awards		Option Grants		Compensation		Earnings		Compensation		Total
Name and Principal Position(s)	Year		($)		($)(2)		($)(1)(3)(4)(5)		($)		($)		($)		($)(6)(7)		($)
Richard M. Feldt, Chief Executive Officer, President and Chairman of the Board of Directors		2008		507,692		332,494		229,226		842,918		N/A		N/A		—		1,912,330
		2007		396,154		400,000		95,236		1,482,856		N/A		N/A		—		2,374,246
		2006		298,075		263,790		—		1,440,484		N/A		N/A		—		2,002,349
Michael El-Hillow, Chief Financial Officer and Secretary		2008		351,900		168,578		481,432		—		N/A		N/A		57,360		1,059,270
		2007		318,750		268,082		380,943		36,738		N/A		N/A		27,907		1,032,420
Rodolfo Archbold, Vice President, Operations		2008		302,087		144,634		313,394		—		N/A		N/A		750		760,865
		2007		102,353		—		131,423		—		N/A		N/A		750		234,526
Carl Stegerwald, Vice President, Construction Mangement and Facilities Engineering		2008		225,000		112,216		351,847		—		N/A		N/A		—		689,063
		2007		4,327		—		19,287		—		N/A		N/A		—		23,614
Dr. Brown F. Williams, Vice President, Science and Engineering		2008		336,500		168,578		352,506		241,989		N/A		N/A		750		1,100,323
		2007		321,154		243,750		307,940		251,856		N/A		N/A		—		1,124,700
		2006		224,038		131,895		260,322		218,282		N/A		N/A		—		834,537

(1)	We did not grant any stock appreciation rights or make any long-term incentive plan payouts to the Named Executive Officers during Fiscal 2007.
(2)	Represents bonuses earned during the fiscal year and paid in the following fiscal year. Mr. El-Hillow’s 2007 bonus includes a one time sign-on of $25,000.
(3)	Michael El-Hillow’s 2007 restricted stock grant was based on his commencement of employment with the Company and was granted on February 12, 2007. Rodolfo Archbold’s 2007 restricted stock grant was based on his commencement of employment with the Company and was granted on July 30, 2007. Carl Stegerwald’s 2007 restricted stock grant was based on his commencement of employment with the Company and was granted on December 17, 2007.
(4)	The stock awards include grants to the Named Executive Officers based on performance for the year ended December 31, 2006 and 2007. Mr. Feldt received 50,000 and 100,000, respectively, Mr. El-Hillow received 40,000 shares of restricted common stock for 2007, Mr. Archbold received 5,000 shares of restricted common stock for 2007 and Dr. Williams received 25,000 and 40,000 shares of restricted common stock, respectively. These restricted shares vest over four years. The stock option awards are valued using the Black-Scholes method.
(5)	Performance-based restricted stock awards were granted to the Named Executive Officers on February 12, 2007 and February 27, 2006. For fiscal year 2007, Mr. Feldt received 300,000 restricted shares, while Mr. El-Hillow, Mr. Archbold and Dr. Williams each received 100,000 restricted shares. For fiscal year 2006, Mr. Feldt received 300,000 restricted shares, while Dr. Williams received 100,000 restricted shares. The shares are subject to performance vesting conditions. The shares for fiscal 2007 will vest only upon the achievement of all of the following accomplishments within a calendar year by December 31, 2011: (a) $400 million in revenue, (b) 35% gross margin and (c) 10% net income, as adjusted by the plan. The shares for fiscal 2006 will vest only upon the achievement of all of the following accomplishments within a calendar year by December 31, 2010: (a) $300 million in revenue, (b) 35% gross margin and (c) 7% net income, as adjusted by the plan. All amounts will include the Company’s pro rata share of any joint venture operating results. At the present time the Company believes that it is unlikely that the performance criteria for these performance-based stock awards will be achieved and, accordingly, does not expect such shares to vest.
(6)	Mr. El-Hillow received $27,157 and $56,610 during fiscal 2007 and 2008, respectively, for relocation fees as part of his commencement of employment with the company. No Named Executive Officers received any other perquisites or other personal benefits in excess of $10,000 during fiscal 2008, 2007 or 2006. The compensation described in this table does not include medical, group life insurance and other benefits received by the Named Executive Officers which are available generally to all of our salaried employees.
(7)	Amounts for Messrs. El-Hillow (2007 and 2008), Archbold (2007 and 2008) and Williams (2008) include matching contributions to the 401(k) plan account of the Named Executive Officer.

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Grants of Plan-Based Awards

The following table sets forth information regarding all equity based incentive plan awards that were made to the Named Executive Officers during fiscal 2008.

Grants of Plan-Based Awards for
Fiscal Year Ended December 31, 2008

(i)

All Other Stock

Awards:

(l)

(d)

Number of

Grant Date/Fair

(b)

(c)

Future

(e)

Shares of Stock

Value of Stock and

(a)

Grant

Estimated

Incentive

Payouts Under

or Units

Option Awards

Name

Date

Equity

(3)(5)

Plan Awards

(#)(1)

($)(2)

Threshold

Target

Maximum

(#)

(#)

(#)

Richard M. Feldt

3/18/2008

—

—

—

100,000

778,000

Michael El-Hillow

3/18/2008

—

—

—

40,000

311,200

Rodolfo Archbold

3/18/2008

—

—

—

5,000

38,900

Carl Stegerwald

3/18/2008

—

—

—

—

—

Dr. Brown F. Williams

3/18/2008

—

—

—

40,000

311,200

(1)

The awards include grants to the Named Executive Officers based on performance for the year ended December 31, 2007. Mr. Feldt received restricted stock grants of 100,000 shares, Mr. El-Hillow and Dr. Williams received restricted stock grants of 40,000 each and Mr. Archbold received restricted stock grants of 5,000 shares (which were prorated based on his start date with the company in 2007). Mr. Stegerwald was not eligible for a grant for 2007. These restricted stock grants vest over four years.

(2)

Grant date value is used for the valuation of all restricted stock awards.

Outstanding Equity Awards at Fiscal Year-End

          The following table sets forth all outstanding equity awards as of December 31, 2008. Options vest equally over a four year period and have an expiration date of 10 years from grant date. Time based restricted stock awards vest in four equal installments on the anniversary of grant date.

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OUTSTANDING EQUITY AWARDS AT FISCAL 2008 YEAR END

	Options									Stock Awards
														Equity		Equity
														Incentive		Incentive Plan
					Equity									Plan		Awards:
					Incentive Plan									Awards:		Market or
					Awards:									Number of		Payout Value
					Number of					Number of				Unearned		of Unearned
	Number of		Number of		Securities					Shares or		Market Value		Shares, Units		Shares, Units
	Securities		Securities		Underlying					Units of		of Share or		or Other		or Other
	Underlying		Underlying		Unexercised	Option				Stock That		Units of Stock		Rights That		Rights That
	Unexercised		Unexercised		Unearned	Exercise		Option		Have Not		That Have		Have Not		Have Not
	Options (#)		Options (#)		Options	Price		Expiration		Vested		Not Vested		Vested		Vested
Name	Exercisable		Unexercisable		(#)	($)		Date		(#)(2)		($)		(#)(1)		($)
Richard M. Feldt		1,638,000		—			1.61		12/10/2013
		187,500		62,500			7.30		3/3/2015
		75,000		75,000			15.09		2/24/2016
											37,500		119,625
											100,000		319,000
															300,000		957,000
															300,000		957,000
Michael El-Hillow		6,192		—			6.51		7/14/2015
		3,750		—			11.44		12/7/2015
		7,500		—			12.42		6/7/2016
		5,000		—			12.42		6/7/2016
											150,000		478,500
											40,000		127,600
															100,000		319,000
Rodolfo Archbold											112,500		358,875
											5,000		15,950
															100,000		319,000
Carl Stegerwald											75,000		239,250
Dr. Brown F. Williams		923		—			4.55		3/14/2010
		923		—			4.55		5/31/2010
		923		—			4.55		7/10/2010
		923		—			6.50		8/1/2010
		923		—			6.50		8/23/2010
		923		—			6.50		9/6/2010
		923		—			6.50		9/28/2010
		1,000		—			19.00		11/2/2010
		1,000		—			7.88		12/13/2010
		1,000		—			10.00		2/15/2011
		1,000		—			10.00		2/16/2011
		1,000		—			11.04		4/18/2011
		1,000		—			12.65		5/31/2011
		1,000		—			7.59		7/25/2011
		2,000		—			5.00		9/5/2011
		39,999		—			3.36		11/11/2014
		15,000		5,000			7.30		3/3/2015
		32,500		32,500			15.09		2/24/2016
											25,000		79,750
											18,750		59,813
											40,000		127,600
															100,000		319,000
															100,000		319,000

(1)

Represents performance-based restricted stock awards under the 2000 Plan granted on February 27, 2006 and February 12, 2007. The shares are subject to performance vesting conditions. The shares for fiscal 2006 will vest only upon the achievement of all of the following accomplishments within a calendar year by December 31, 2010: (a) $300 million in revenue, (b) 35% gross margin and (c) 7% net income, as adjusted by the plan. The shares for fiscal 2007 will vest only upon the achievement of all of the following accomplishments within a calendar year by December 31, 2011: (a) $400 million in revenue, (b) 35% gross margin and (c) 10% net income, as adjusted by the plan. All amounts will include the Company’s pro rata share of any joint venture operating results. At the present time the Company believes that it is unlikely that the performance criteria for these performance-based stock awards will be achieved and, accordingly, does not expect such shares to vest. For purposes of this table, the performance based awards are valued based upon our closing stock price on December 31, 2008 ($3.19).

(2)

These restricted stock grants vest over four years.

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Options Exercises and Stock Vested

The following table sets forth all stock options that were exercised or restricted stock awards that vested in fiscal 2008, including the value realized upon exercise or vesting.

Option Exercises and Stock Vested
for Fiscal Year Ended December 31, 2008

	Option Awards				Stock Awards
	Number of
	Shares		Value		Number of Shares		Value
	Acquired on		Realized on		Acquired on		Realized on
	Exercise		Exercise		Vesting		Vesting
Name of Executive Officer	(#)		($)		(#)		($)
Richard M. Feldt		—		—		12,500		125,250
Michael El-Hillow (1)		1,849		2,736		50,000		501,000
Rodolfo Archbold (1)		1,269		1,878		37,500		346,500
Carl Stegerwald		—		—		25,000		70,500
Dr. Brown F. Williams (1)		2,693		2,597		31,250		133,625

(1) The shares and value realized include shares purchased through the Company’s 2000 Employee Stock Purchase Plan.

Potential Benefits upon Change of Control or Termination following a Change of Control

     Change of Control Severance Arrangements in General. The company has entered into change of control severance agreements with each of its Chief Executive Officer, named executive officers and other executive officers. The executive change of control and severance agreements described in the Compensation Discussion and Analysis above provide for accelerated vesting of equity awards following a change of control and severance payments in the event the executive’s employment is terminated within twelve months following a change of control. Mr. Feldt will receive full acceleration of the vesting of his equity awards upon a change of control and Messrs. El-Hillow and Chleboski and Drs. Williams and Bailey, each will receive 12 months acceleration upon a change of control. Mr. Feldt will receive 18 months severance in the case of a change of control followed by termination without cause or resignation for good reason. Mr. El-Hillow, Dr. Bailey, Mr. Chleboski and Dr. Williams each will receive 12 months severance in the case of a change of control followed by termination without cause or resignation for good reason.

     As described below in more detail, our change of control severance agreements with our executive officers also provide for either (1) an excise tax gross-up reimbursement or (2) a possible reduction in the level of acceleration of vesting if either the value of the acceleration on a change of control or the value of the acceleration and other benefits on a change of control followed by an involuntary termination of employment would constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code and would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code.

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     Automatic Acceleration of Vesting Following a Change of Control. The following table provides the intrinsic value (that is, the value based upon our closing stock price on December 31, 2008 ($3.19), less any applicable exercise price) of stock options and restricted stock that would become exercisable or vested as a result of a change of control as of December 31, 2008. The Value of Unvested Restricted Stock Awards and Value of Performance Share Program Awards included in the table are also based on the closing price of our common stock on December 31, 2008.

			Value of		Value of				Total
			Unvested		Unvested				Payments
			Restricted		Performance		280G excise		and Value of
	Value of		Stock		Share Program		Tax and Gross-		Equity
	Unvested Stock		Awards		Awards		up Payment		Awards
	Options ($)		($)		($)		($)		($)
Richard M. Feldt		—		438,625		1,914,000		—		2,352,625
Michael El-Hillow		—		348,243		319,000		—		667,243
Rodolfo Archbold		—		176,445		319,000		—		495,445
Carl Stegerwald		—		79,750		—		—		79,750
Dr. Brown F. Williams		—		172,126		638,000		—		810,126

     Automatic Acceleration of Vesting upon an Involuntary Termination Following a Change of Control. Assuming the employment of our named executive officers was terminated involuntarily and without cause, or such officers resigned with good reason, during the twelve months following a change of control occurring on December 31, 2008, in accordance with the terms of our executive change of control severance agreements our named executive officers would be entitled to cash payments in the amounts set forth opposite their names in the below table, subject to any deferrals required under Section 409A of the Internal Revenue Code of 1986, as amended, and acceleration of vesting for outstanding equity awards, as set forth in the below table. The following table provides the value of compensation and benefits payable and intrinsic value (that is, the value based upon our closing stock price on December 31, 2008 ($3.19), less any applicable exercise price) of stock options and restricted stock that would become exercisable or vested as a result of a termination occurring immediately following a change of control as of December 31, 2008. The Value of Unvested Restricted Stock Awards and Value of Performance Share Program Awards included are also based on the closing price of our common stock on December 31, 2008.

													Value of
											Value of		Unvested				Total
							Accrued		Value of		Unvested		Performance		280G Excise		Payments and
					Continuation		Vacation		Unvested		Restricted		Share Program		Tax and Gross-		Value of
	Base Salary		Bonus		of Benefits		Pay		Stock Options		Stock Awards		Awards		up Payment		Equity
	($)		($)		($)		($)		($)		($)		($)		($)		Awards ($)
Richard M. Feldt		750,000		750,000		19,284		20,192		—		438,625		1,914,000		1,203,187		5,095,288
Michael El-Hillow		338,000		253,500		12,856		18,850		—		606,100		319,000		426,973		1,975,279
Rodolfo Archbold		290,000		217,500		18,464		13,942		—		374,825		319,000		—		1,233,731
Carl Stegerwald		225,000		168,750		20,655		12,980		—		239,250		—		—		666,635
Dr. Brown F. Williams		338,000		253,500		15,719		19,500		—		267,163		638,000		510,796		2,042,678

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     Excise Tax Related Change of Control Benefits. Pursuant to their change of control severance agreements with the Company, in the event that acceleration or other benefits provided for in the change of control severance agreements with Messrs. Feldt, El-Hillow and Dr. Williams constitute “parachute payments” within the meaning of Section 280G of the Code and would be subject to the excise tax imposed by Section 4999 of the Code, such executive will receive (i) a payment from the Company sufficient to pay such excise tax, and (ii) an additional payment from the Company sufficient to pay the federal and state income and employment taxes and additional excise taxes arising from the payments made to the employee by the Company.

     In the event that the severance and other benefits provided Mr. Archbold and Mr. Stegerwald constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code and would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code, such executive’s benefits under the Agreement shall be either delivered in full or delivered as to such lesser extent which would result in no portion of such benefits being subject to the excise tax, whichever results in the receipt by the employee, on an after-tax basis, of the greatest amount of benefits.

     Each of the two forgoing tables sets forth the amount payable by the Company to each named executive officer to (1) offset the estimated excise tax imposed by Section 4999 of the Internal Revenue Code that result from 280G “parachute payments” and (2) provide “gross-up payments” to offset the tax amounts that would result from payment of the estimated excise tax imposed on the executive.

NON-EMPLOYEE DIRECTOR COMPENSATION

     Our compensation program for non-employee directors is designed to attract and retain qualified directors by offering compensation that is competitive with other growing technology companies and recognizes the time, expertise and accountability required by Board service. Each year, the Compensation Committee reviews the current compensation program as well as director compensation data prepared by an external consulting firm. Based upon this review, the Compensation Committee recommends to the full Board of Directors what changes, if any, should be made to the director compensation program. The Board must approve any changes to the director compensation program.

     In June 2007, our Board of Directors approved a revised Compensation Policy for Directors effective July 1, 2007. The plan was modified again in March 2008.

     Under the current policy, each director serving in July 2007 received a grant of 10,000 restricted shares of our common stock on July 25, 2007 and will receive a grant of 5,000 restricted stock units at each annual meeting beginning in 2008. New directors will receive a grant of 10,000 restricted stock units upon their election to the Board of Directors and receive a grant of 5,000 restricted stock units at each annual meeting of stockholders following the director’s first six months of service on the Board of Directors. Each director must hold his or her initial grant of restricted shares or restricted stock units until he or she leaves the Board, at which time the shares fully vest (in the case of restricted shares) or will be paid in full (in the case of restricted stock units) if the director has served on the Board of Directors for at least two years. The annual 5,000 restricted stock units vest immediately but the shares subject to those awards will only be paid when the director leaves the Board of Directors.

     The current policy also provides for cash compensation for directors. Each non-employee director receives an annual retainer of $20,000 ($30,000 for the lead outside director) and $1,500 for each in person meeting and $750 for each telephonic meeting, of the full Board and each committee. In addition, the committee chairs receive the following annual retainers: Audit Committee-$12,000; Compensation Committee-$6,000 and Nominating and Corporate Governance Committee-$6,000. In connection with Board and committee meetings, our non-employee directors are reimbursed for their reasonable out-of-pocket expenses incurred in attending meetings of the Board of Directors and any committees of the Board of Directors on which they serve.

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     The following table sets forth information regarding the compensation earned by or awarded to each non-employee director who served on our Board of Directors for fiscal 2008.

Non-Employee Director Summary Compensation Table

Director Compensation
For Fiscal Year Ended December 31, 2008

	(b)
	Fees Earned
	or Paid in		(c)		(d)			(l)
(a)	Cash		Option Awards		Stock Awards			Total
Name	($)		($)		($)			($)
Tommy L. Cadwell		42,500		—		102,214	(2)		144,714
Allan H. Cohen		59,000		—		51,100	(3)		110,100
Dr. Peter W. Cowden		48,500		—		107,419	(4)		155,919
Edward C. Grady		66,000		—		51,100	(5)		117,100
Dr. Susan F. Tierney		4,500		—		81,500	(6)		86,000
Dr. Gerald L. Wilson (1)		1,500		—		62,100			63,600

(1)	On February 1, 2008, Dr. Wilson resigned from the Board of Directors.
(2)	As of December 31, 2008, Mr. Cadwell held 16,270 shares of common stock underlying unexercised options, 10,000 shares of unvested restricted stock and 5,000 shares of unvested restricted stock units. The grant date fair value of stock awards granted to Mr. Cadwell during 2008 was $51,500.
(3)	As of December 31, 2008, Mr. Cohen held 36,875 shares of common stock underlying unexercised options, 10,000 shares of vested restricted stock and 5,000 shares of vested restricted stock units. The grant date fair value of stock awards granted to Mr. Cohen during 2008 was $51,500.
(4)	As of December 31, 2008, Dr. Cowden held 19,644 shares of common stock underlying unexercised options, 10,000 shares of vested restricted stock and 5,000 shares of vested restricted stock units. The grant date fair value of stock awards granted to Dr. Cowden during 2008 was $51,500.
(5)	As of December 31, 2008, Mr. Grady held 28,125 shares of common stock underlying unexercised options, 10,000 shares of vested restricted stock and 5,000 shares of vested restricted stock units. The grant date fair value of stock awards granted to Mr. Grady during 2008 was $51,500.
(6)	As of December 31, 2008, Dr. Tierney held 10,000 shares of unvested restricted stock units. The grant date fair value of stock awards granted to Dr. Tierney during 2008 was $81,500.

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

Equity Compensation Plan Information

     The following table provides information as of December 31, 2008 with respect to shares of our common stock that may be issued under equity compensation plans:

					Number of Securities
	Number of Securities to				Remaining Available for
	Be Issued Upon Exercise				Future Issuance Under
	Of Outstanding Options,		Weighted-average		Equity Compensation
	Stock Awards, Stock		Exercise Price of		Plans (Excluding
	Stock Awards, Stock Units,		Outstanding Options,		Securities Reflected in
	Warrants and Rights		Warrants and Rights		Column (a))
Plan category	(a)(1)		(b)(2)		(c)(3)
Equity compensation plans approved by security holders		6,849,977	$	4.65		2,197,996
Equity compensation plans not approved by security holders		—		—		—
Total		6,849,977	$	4.65		2,197,996

(1)	Includes 3,162,087 shares of restricted stock awards and restricted stock units granted under the 2000 Stock Option and Incentive Plan. The remaining balance consists of outstanding stock option grants.
(2)	The weighted average exercise price does not take into account the shares issuable upon vesting of outstanding restricted stock awards which have no exercise price.
(3)	1,500,000 shares were added to the equity compensation plan and approved by the stockholders at our 2008 annual meeting.

Securities Ownership of Certain Beneficial Owners and Management

     The following table sets forth certain information regarding beneficial ownership of our common stock as of February 13, 2009, or the measurement date by: (i) each person which is know by us to own beneficially more than 5% of the outstanding shares of common stock; (ii) each of our directors; (iii) each of our executive officers named in the Summary Compensation Table below; and (iv) all of our current directors and executive officers as a group. Unless otherwise indicated the address for each beneficial owner is c/o Evergreen Solar, Inc. 138 Bartlett Street, Marlboro, Massachusetts 01752.

69

	Number of Shares		Percentage of
	Beneficially Owned		Shares of
Name and Address of Beneficial Owner	(1)		Common Stock (2)
5% Stockholders:
FMR LLC (3) 82 Devonshire Street Boston, MA 02109		18,891,778		11.5	%
DC Chemical (4) Oriental Chemical Building 50, Sogong-dang, Jong-gu, Seoul, 100-718 Korea		15,698,125		9.5	%
Barclays PLC (5) 1 Churchhill Place London, E14 5HP, England		12,220,128		7.4	%
Current Executive Officers and Directors:
Richard M. Feldt (6)		2,893,490		1.7	%
Michael El-Hillow (7)		379,291		*
Rodolfo Archbold (8)		245,362		*
Dr. J. Terry Bailey (9)		418,290		*
Richard G. Chleboski (10)		646,534		*
Gary T. Pollard (11)		311,578		*
Carl Stegerwald		83,900		*
Dr. Brown F. Williams (12)		475,556		*
Tom L. Cadwell (13)		31,270		*
Allan H. Cohen (14)		54,875		*
Dr. Peter W. Cowden (15)		34,644		*
Edward C. Grady (16)		60,125		*
Susan F. Tierney		10,000		*
All current executive officers and directors as a group (13 persons) (17)		5,664,915		3.4	%

*	Less than one percent of the outstanding shares of class.
(1)	The persons named in the table have sole voting and investment power with respect to all shares shown as beneficially owned by them, except as noted in the footnotes below.
(2)	Applicable percentage ownership is based upon 164,877,650 shares of common stock outstanding as of the measurement date. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and includes voting and investment power with respect to shares. Shares of common stock subject to options currently exercisable or exercisable within 60 days after the measurement date are deemed outstanding for computing the percentage ownership of the person holding such options, as the case may be, but are not deemed outstanding for computing the percentage ownership of any other person.
(3)	FMR LLC reported sole voting power over 56,471 shares, shared voting power over no shares, and sole dispositive power over 18,891,778 shares beneficially owned.
(4)	DC Chemical Co., Ltd. reported sole voting power and sole dispositive power over 15,698,125 shares beneficially owned. Includes 10,750,000 shares of restricted common stock. The restrictions on these shares will be removed when 500,000 kilograms of polysilicon are delivered to us by DC Chemical Co., Ltd.

70

(5)	Barclays PLC reported sole voting power over 12,220,128 shares and sole dispositive power over all 12,220,128 shares beneficially owned.
(6)	Includes 2,000,500 shares of common stock issuable upon the exercise of options that may be exercised within 60 days from the measurement date.
(7)	Includes 22,442 shares of common stock issuable upon the exercise of options that may be exercised within 60 days from the measurement date.
(8)	Includes 1,000 shares of common stock held by spouse.
(9)	Includes 175,000 shares of common stock issuable upon the exercise of options that may be exercised within 60 days from the measurement date.
(10)	Includes 374,664 shares of common stock issuable upon the exercise of options that may be exercised within 60 days from the measurement date.
(11)	Includes 104,375 shares of common stock issuable upon the exercise of options that may be exercised within 60 days from the measurement date.
(12)	Includes 124,210 shares of common stock issuable upon the exercise of options that may be exercised within 60 days from the measurement date.
(13)	Includes 16,270 shares of common stock issuable upon the exercise of options that may be exercised within 60 days from the measurement date.
(14)	Includes 36,875 shares of common stock issuable upon the exercise of options that may be exercised within 60 days from the measurement date.
(15)	Includes 19,644 shares of common stock issuable upon the exercise of options that may be exercised within 60 days from the measurement date.
(16)	Includes 28,125 shares of common stock issuable upon the exercise of options that may be exercised within 60 days from the measurement date. Mr. Grady’s address is 922 Tyner Way, PO Box 5998, Incline Village, NV 89450.
(17)	Includes 2,902,105 shares of common stock issuable upon the exercise of options that may be exercised within 60 days from the measurement date and 1,000 shares of common stock held by spouse.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Related Party Transaction Approval Policy

     We have adopted a policy that all related party transactions will be on terms no less favorable to the Company than could be obtained from unaffiliated third parties, and must be reviewed and approved on an ongoing basis by the Audit Committee of our Board of Directors. A “related party transaction” is a transaction or relationship involving a director, executive officer or 5% stockholder or their immediate family members that is reportable under the SEC’s rules regarding such transactions. Prior to April 2008, related party transactions were subject to the review and approval of our Nominating and Corporate Governance Committee and our full Board of Directors.

Certain Relationships and Related Party Transactions

     Transactions with Mr. Stegerwald. Mr. Feldt, our President, Chief Executive Officer and Chairman of the Board of Directors, is the brother-in-law of Carl Stegerwald, our Vice President of Construction Management and Facilities Engineering. Mr. Stegerwald’s annual salary is $225,000 and his target bonus is 75% of his annual salary. He is also eligible for an equity award in 2009 based on his service in 2008.

71

     Transactions with DC Chemical. Since the beginning of 2007 we have entered into four agreements with DC Chemical Co., Ltd., a holder of more than 5% of our outstanding common stock. On April 17, 2007, we entered the following agreements:

• Polysilicon Supply Agreement — Our April 2007 polysilicon supply agreement with DC Chemical 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 2008 and continuing through 2014. In January 2008, we entered into a second supply agreement with DC Chemical that 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. The January 2008 agreement required us to pay approximately $36.5 million in prepayments during the first year of the agreement. Under the two supply contracts with DC Chemical, we are obligated to make cash payments to DC Chemical of approximately $450 million, subject to certain adjustments based on market related factors.

• Stock Purchase Agreement — Concurrently with the April 2007 polysilicon supply agreement, pursuant to a stock purchase agreement, we sold DC Chemical 3 million shares of our common stock for $12.07 per share and issued DC Chemical an additional 4.5 million shares of transfer restricted common stock and 625 shares of transfer restricted preferred stock (which subsequently converted into 6.25 million shares of transfer restricted common stock). The restrictions on the common stock will lapse upon the delivery of 500,000 kilograms of polysilicon to the Company.

• Stockholders Agreement — Also concurrently with the April 2007 polysilicon supply agreement, we entered into a stockholder agreement with DC Chemical which prohibits, without our consent, certain acquisitions of our common stock by DC Chemical, certain proxy solicitation activities, as well as DC Chemical’s ability to publicly announce or make certain proposals regarding business combinations involving our company, among other things. The stockholders agreement also provides DC Chemical with the right to participate in certain of our future securities offerings in order to maintain its pro rata percentage ownership of the Company. In addition, the stockholders agreement provides DC Chemical with certain registration rights, including a requirement that we file a registration statement covering the restricted stock within 15 days of when transfer restrictions on DC Chemical’s shares lapse. Finally, the stockholders agreement prohibits, without our consent, DC Chemical from transferring its shares of Evergreen Solar common stock to any person who, after the transfer, would have beneficial ownership of 10% or more of the voting power of the Company. As permitted pursuant to the stockholders agreement, DC Chemical purchased 525,000 shares of our common stock in February 2008 from our underwriters in connection with a public offering we completed at the public offering price of $9.50 per share.

     Other Transactions. Other than compensation agreements and other arrangements which are described in Officer Compensation — Compensation Discussion and Analysis and Non-Employee Director Compensation, in 2008, including immaterial amendments to our change of control severance agreements with each of our executive officers, there was not, and there is not currently proposed, any other related party transactions.

Independence of Members of the Board of Directors and Committees

     The Board of Directors has determined that each of Messrs. Cadwell, Cohen, and Grady and Dr. Cowden and Dr. Tierney has no relationship with the Company other than as a stockholder and as a director, and each is independent within the meaning of our director independence standards and the applicable Nasdaq director independence standards for service on the Board of Directors and the applicable committees of the Board of Directors. Our director independence standards are contained in the Board of Directors’ Corporate Governance Guidelines, a copy of which is available under the “Investors” section of our website at www.evergreensolar.com.

72

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

          Audit and Related Fees for Fiscal 2007 and 2008

     The following table sets forth a summary of the fees and expenses billed to us by PricewaterhouseCoopers LLP for professional services rendered for the fiscal years ended December 31, 2007 and 2008, respectively:

	2007		2008
Audit Fees (1)	$	698,824	$	644,333
Audit-Related Fees (2)		—		—
Tax Fees (3)		4,841		13,550
All Other Fees (4)		1,500		—
Total	$	705,165	$	657,883

(1)	Audit Fees represent fees for professional services relating to the audit of our financial statements and the review of the financial statements included in our quarterly reports, advice on accounting matters directly related to the audit and audit services provided in connection with other regulatory filings.
(2)	Audit-Related Fees represent fees for consultation and other attestation services and not reported under “Audit Fees.”
(3)	Tax Fees principally represent fees for professional services for tax compliance, tax advice and tax return preparation relating to our fiscal year end.
(4)	All Other Fees include licenses to technical accounting research software.

     The Audit Committee meets regularly with PricewaterhouseCoopers LLP throughout the year and reviews both audit and non-audit services performed by PricewaterhouseCoopers LLP as well as fees charged by PricewaterhouseCoopers LLP for such services. In engaging PricewaterhouseCoopers LLP for the services described above, the Audit Committee has determined that the provision of such services is compatible with maintaining PricewaterhouseCoopers LLP’s independence in the conduct of its auditing functions pursuant to the auditor independence rules of the SEC.

     Pre-approval Policies and Procedures. The chairman of the Audit Committee is appointed to provide pre-approval for further audit and permissible non-audit services proposed by PricewaterhouseCoopers LLP up to $50,000, subject to presenting such decision to the full Audit Committee at its next scheduled meeting. Such an appointment allows PricewaterhouseCoopers LLP to commence an engagement without being delayed due to scheduling. Following an approval of non-audit services by the Chairman of the Audit Committee, the full Audit Committee, at its next scheduled meeting, would make full approval of further services.

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 or because the required information is given in the consolidated financial statements or notes thereto.

          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.

73

LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE

Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, 2007 and 2008	F-3
Consolidated Statements of Operations for the years ended December 31, 2006, 2007 and 2008	F-4
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2006, 2007 and 2008	F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2007 and 2008	F-6
Notes to Consolidated Financial Statements	F-7
Schedule I — Condensed Financial Information of the Registrant	F-37

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, 2008 and 2007, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2008 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, 2008, 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.

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
March 2, 2009

F-2

EVERGREEN SOLAR, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

	December 31,
	2007			2008
Assets
Current assets:
Cash and cash equivalents	$	29,428		$	100,888
Marketable securities		70,275			76,621
Restricted cash		41,000			—
Accounts receivable, net of allowance for doubtful accounts of $85 and $80 at December 31, 2007 and December 31, 2008, respectively		9,297			35,458
Due from Sovello AG		4,331			1,949
Inventory		8,094			23,500
Prepaid cost of inventory		—			11,696
VAT receivable, net		10,549			1,474
Other current assets		9,216			5,723
Total current assets		182,190			257,309
Investment in and advances to Sovello AG		87,894			115,553
Restricted cash		414			212
Deferred financing costs		1,991			7,494
Loan receivable from silicon supplier		21,904			41,757
Prepaid cost of inventory		143,035			172,193
Fixed assets, net		114,641			403,664
Other assets		1,186			3,579
Total assets	$	553,255		$	1,001,761
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and accrued expenses	$	32,798		$	62,652
Due to Sovello AG		29,615			22,840
Accrued employee compensation		4,875			6,451
Accrued interest		1,969			7,392
Accrued warranty		705			1,182
Total current liabilities		69,962			100,517
Subordinated convertible notes		90,000			—
Senior convertible notes		—			373,750
Deferred income taxes		—			7,815
Total liabilities		159,962			482,082
Commitments and Contingencies (Notes 7 and 20)
Stockholders’ equity:
Common stock, $0.01 par value, 150,000,000 and 250,000,000 shares authorized at December 31, 2007 and December 31, 2008, respectively, 102,252,965 and 164,874,850 issued and outstanding at December 31, 2007 and December 31, 2008, respectively		1,023			1,649
Additional paid-in capital		521,695			737,615
Accumulated deficit		(136,280	)		(221,215	)
Accumulated other comprehensive income		6,855			1,630
Total stockholders’ equity		393,293			519,679
Total liabilities and stockholders’ equity	$	553,255		$	1,001,761

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

F-3

EVERGREEN SOLAR, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

	For the Years Ended December 31,
	2006			2007			2008
Product revenues	$	102,252		$	58,334		$	95,245
Royalty and fee revenues		—			11,532			16,714
Total revenues		102,252			69,866			111,959
Cost of revenues		90,310			52,838			93,073
Gross profit		11,942			17,028			18,886
Operating expenses:
Research and development		18,390			20,594			22,039
Selling, general and administrative		21,890			20,608			23,868
Equipment write-offs		1,526			—			8,034
Facility start-up		—			1,404			30,623
Restructuring charges		—			—			30,413
Total operating expenses		41,806			42,606			114,977
Operating loss		(29,864	)		(25,578	)		(96,091	)
Other income (expense):
Foreign exchange gains (losses), net		3,322			444			(4,078	)
Interest income		4,613			9,774			12,695
Interest expense		(6,084	)		(3,412	)		(5,896	)
Other income (expense), net		1,851			6,806			2,721
Loss before minority interest and equity income from interest in Sovello AG		(28,013	)		(18,772	)		(93,370	)
Minority interest in Sovello AG		849			—			—
Equity income from interest in Sovello AG		495			2,170			8,435
Net loss	$	(26,669	)	$	(16,602	)	$	(84,935	)
Net loss per share (basic and diluted)	$	(0.41	)	$	(0.19	)	$	(0.65	)
Weighted average shares used in computing basic and diluted net loss per share		65,662			86,799			130,675

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

F-4

EVERGREEN SOLAR, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

														Accumulated
					Additional									Other			Total
	Common Stock				Paid-In			Deferred			Accumulated			Comprehensive			Stockholders’			Comprehensive
	Shares		Amount		Capital			Compensation			Deficit			Income (Loss)			Equity			Loss
Balance at January 1, 2006		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 Sovello AG 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 with DC Chemical Agreement		3,000		30		36,180												36,210
Issuance of restricted stock in connection with 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 Sovello AG 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
Issuance of common stock pursuant to exercise of options		442		4		1,012												1,016
Issuance of common stock in connection with public offering, net of offering costs		18,400		184		166,542												166,726
Compensation expense associated with equity compensation plans, including restricted share grants		634		7		7,686												7,693
Shares of common stock issued under ESPP		111		1		620												621
Deferred tax associated with gains on investment in Sovello AG						(7,059	)											(7,059	)
Shares loaned in connection with share lending agreement		30,856		308		(305	)											3
Debt conversion net of deferred financing costs write-off		12,179		122		88,137												88,259
Capped call premium, net of financing costs						(64,950	)											(64,950	)
Capped call reversal						24,237												24,237
Comprehensive loss:
Net loss												(84,935	)					(84,935	)	$	(84,935	)
Unrealized losses on marketable securities															(34	)		(34	)		(34	)
Foreign currency translation adjustment, net of deferred taxes															(5,191	)		(5,191	)		(5,191	)
Comprehensive loss																				$	(90,160	)
Balance at December 31, 2008		164,875	$	1,649	$	737,615		$	—		$	(221,215	)	$	1,630		$	519,679

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

F-5

EVERGREEN SOLAR, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	For the Years Ended December 31,
	2006			2007			2008
Cash flows from operating activities:
Net loss	$	(26,669	)	$	(16,602	)	$	(84,935	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense		9,311			7,418			18,156
Amortization of deferred grant credits		(2,004	)		—			—
Loss on disposal of fixed assets		2,383			—			34,496
Minority interest in Sovello AG		(849	)		—			—
Equity income from Sovello AG		(495	)		(2,170	)		(8,435	)
Amortization of deferred debt financing costs		443			444			1,010
Bad debt expense and provision for early payment discounts		85			(1	)		(7	)
Imputed interest and accretion of bond premiums		(955	)		(1,210	)		(2,472	)
Accretion of caped call discount		—			—			345
Compensation expense associated with employee equity awards		5,062			6,382			7,246
Provision for warranty		—			58			585
Changes in operating assets and liabilities:
Accounts receivable		(12,415	)		10,952			(26,168	)
Grants receivable		18,962			—			19,908
Inventory		(10,958	)		(3,327	)		(15,406	)
Prepaid cost of inventory		—			(23,121	)		(39,318	)
Interest receivable		(134	)		13			115
Other current assets		(6,652	)		(10,687	)		9,148
Accounts payable		(728	)		16,588			5,854
Other current liabilities		15,285			1,872			10,048
Interest payable		—			1,352			2,290
Other		—			43			1,659
Net cash used in operating activities		(10,328	)		(11,996	)		(65,881	)
Cash flows from investing activities:
Purchases of fixed assets and deposits on fixed assets under construction		(107,667	)		(50,744	)		(345,256	)
Proceeds from the disposal of fixed assets		—			—			12
Decrease in cash related to conversion of Sovello AG consolidated entity to equity method affiliate		(22,274	)		—			—
Decrease (increase) in restricted cash		891			(41,000	)		41,178
Increase in Sovello AG loan		(389	)		—			(23,774	)
Increase in other loans		—			(22,386	)		(22,164	)
Purchases of marketable securities		(63,290	)		(108,386	)		(98,500	)
Proceeds from sale and maturity of marketable securities		107,186			81,975			93,059
Net cash used in investing activities		(85,543	)		(140,541	)		(355,445	)
Cash flows from financing activities:
Proceeds from issuances of common stock, net of offering costs		—			170,637			166,726
Proceeds from issuance of DC Chemical restricted shares		—			107			—
Proceeds from issuance of senior convertible debt, net of offering costs		—			—			363,963
Payment of capped call up-front premium		—			—			(39,543	)
Proceeds from share lending agreement		—			—			3
Increase in Sovello AG debt		58,708			—			—
Proceeds from exercise of stock options and warrants, and shares purchased under Employee Stock Purchase Plan		16,277			4,393			1,637
Net cash flow provided by financing activities		74,985			175,137			492,786
Effect of exchange rate changes on cash and cash equivalents		(3,028	)		—			—
Net increase (decrease) in cash and cash equivalents		(23,914	)		22,600			71,460
Cash and cash equivalents at beginning of year		30,742			6,828			29,428
Cash and cash equivalents at end of year	$	6,828		$	29,428		$	100,888
Supplemental cash flow information:
Interest paid		5,201			986			—
Gain on investment in Sovello AG by Q-Cells and REC		8,466			9,526			—
Non-cash cost of prepaid inventory		—			119,914			—

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

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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. In November 2008, EverQ was converted into a German stock corporation and changed its name to Sovello AG (“Sovello”). The purpose of Sovello is to operate facilities to manufacture, market and sell solar products based on the Company’s proprietary wafer manufacturing technology. Sovello has accelerated the availability of wafer, cell and panel manufacturing capacity based on our technology and provided the Company with greater access to the European Union solar market.

     Until December 31, 2008, we marketed and sold all solar panels manufactured by Sovello under the Evergreen Solar brand, and managed customer relationships and contracts related to the sale of Sovello manufactured product. We receive selling fees from Sovello in connection with our sales of Sovello manufactured product and do not report gross revenue or cost of goods sold resulting from the sale of Sovello’s solar panels. For 2008, the Company received a fee of 1.6% of gross Sovello revenue. In addition, the Company receives royalty payments for its ongoing technology contributions to Sovello.

     In September 2007, the Company began constructing its own manufacturing facility in Devens, Massachusetts and began production of solar panels at the this facility during the third quarter of 2008. Upon reaching full production capacity, which the Company expects to take place in the second half of 2009, Devens is expected to be operating at an annual capacity of 160 megawatts, or MW.

     In connection with our expansion plans, since April 2007 we have entered into multi-year silicon supply agreements with four suppliers. Under our silicon 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), we have silicon under contract that provides over 12,000 metric tons of silicon through 2019. During 2009, DC Chemical is expected to provide approximately 65% of our 2009 expected requirements.

 

     In October 2007, Sovello agreed to license the Company’s new wafer furnace technology, the quad wafer furnace, and the Company and its two Sovello partners approved the construction of Sovello’s third manufacturing facility, Sovello 3, in Thalheim, Germany, which is expected to increase Sovello’s annual production capacity from approximately 100 MW to approximately 180 MW by the second half of 2009. Sovello agreed to pay the Company a royalty based on actual cost savings realized using the quad wafer furnaces in Sovello 3 as compared to

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dual wafer furnaces used by Sovello’s first two manufacturing facilities, which are in use at Sovello’s two current facilities. The Company and its partners have also agreed to pursue an initial public offering of Sovello’s stock and expand Sovello’s annual production capacity to approximately 600 MW by 2012. If Sovello were to become publicly traded prior to December 31, 2009, REC will supply Sovello an additional supply agreement for silicon to support this planned capacity expansion.

     On December 29, 2008, as part of ongoing efforts to lower overhead costs and reduce overall cash requirements, management committed the Company to a plan to cease production at its pilot manufacturing facility in Marlboro, Massachusetts. Production at the facility ceased on December 31, 2008. Future advanced manufacturing piloting activities will be performed at its Devens manufacturing facility. Almost all of the Marlboro pilot manufacturing facility employees have transferred to the Devens manufacturing facility to fill open positions associated with the second phase of Devens. As a result of the cessation of manufacturing in Marlboro, the Company recorded restructuring costs, principally non-cash charges, of approximately $30.4 million associated with the write-off of manufacturing and development equipment, inventory and leasehold improvements of the Marlboro pilot facility. The Company may also incur occupancy, location restoration and moving costs of approximately $4.0 to $5.0 million during 2009. The Company believes that closing the Marlboro pilot facility and better utilizing existing equipment and facilities at its research and development center and at its Devens manufacturing facility will result in lower overhead costs and reduce overall cash requirements.

     Although the Company’s current business plan indicates it will have adequate liquidity for the foreseeable future, the Company is subject to risks common to companies in the high-technology and alternative energy industry including, but not limited to, the difficulty of successfully developing new technological innovations, competition from a number of qualified and better-funded companies, dependence on key personnel, dependence on key or sole source suppliers for materials, the challenge of protecting of proprietary technology and complying with government regulations

     The Company has incurred net losses from operations and negative cash flow from operations since inception. The Company plans to increase its Devens production significantly in 2009, from 8.5 MW in the fourth quarter of 2008 to approximately 17 MW in the first quarter of 2009, 30 MW in the second quarter, and between 35 MW to 40 MW in both the third and fourth quarters, resulting in annual production of between 125 MW to 130 MW.

     At December 31, 2008, the Company had approximately $178 million of cash, cash equivalents and marketable securities, of which $23 million was due to Sovello that the Company collected as Sovello’s sales agent. Through mid-2009, the completion of the Company’s Devens factory, the first phase of the Midland factory and debt service interest payments will require about $120 million, resulting in a cash balance available to support operations of approximately $35 million.

     The Company has sales contracts for approximately 80 MW of product to be manufactured at its Devens facility for delivery in 2009 at an average selling price of approximately $3.20 (assuming a U.S. dollar/Euro exchange rate of 1.25), which is about 10% less than the Company’s average selling price of about $3.55 in 2008. The Company’s sales plan assumes there should be sufficient market demand to sell the remaining expected Devens manufacturing capacity. The Company expects to moderate its production levels depending on changes in market demands as the year progresses.

     The Company also plans to significantly reduce its manufacturing cost from approximately $3.50 per watt in the fourth quarter of 2008 to approximately $2.00 per watt by the end of 2009, primarily through increased volume and improved yields and cell conversion efficiency.

     The Company believes that its business plan will provide sufficient cash, cash equivalents and marketable securities to fund its planned capital programs, its share of any potential funding requirements related to its investment in Sovello and its operating needs for the next 12 months. While the Company’s business plan anticipates certain levels of potential risk, particularly in light of the difficult and uncertain current economic environment, the Company is exposed to particular risks and uncertainties including, but not limited to:

• possible delays in completion of the Devens plant, budget overruns or failure to meet expected production levels;

• selling less than approximately 90 MW to 110 MW of Devens manufactured product at an average selling price of $2.90 to $3.10 per watt to credit worthy customers;

• higher than planned manufacturing costs and failing to achieve expected Devens operating metrics, with any delays in the Company’s plan to scale capacity resulting in increased costs that could impair business operations;

• further weakening of the Euro against the U.S. dollar, as a substantial portion of the contracted sales are denominated in Euros; and

• increased funding requirements for Sovello to complete its third manufacturing facility and achieve its planned manufacturing cost and operating metrics, or to potentially address the loss of any prior or expected government grant funding for Sovello (see Note 5 regarding the Undertaking and how Sovello’s failure to meet its business plan may require the Company to provide additional funding).

     Although the Company’s current business plan indicates it has adequate liquidity to operate under expected operating conditions, the risks noted above could result in liquidity concerns. Management’s plan with regard to this uncertainty includes, among other actions:

• continually monitoring its operating results against expectations and, if required, further restrict operating costs and capital spending if events warrant;

• possibly hedging the Company’s exposure to fluctuations in the U.S. dollar / Euro exchange rate to limit any adverse exposure, but there can be no assurance that hedges can be put in place at terms acceptable to us or that such hedging activities will be effective; and

• negotiating with a number of banks to secure a borrowing base line of credit, without a minimum cash requirement, as is the case with the Company’s current line of credit, supported by the expected significant increase in the Company’s accounts receivable, inventory and overall working capital.

     If adequate capital does not become available if needed on acceptable terms, the Company’s ability to fund operations, further develop and expand its manufacturing operations and distribution network or otherwise respond to competitive pressures would be significantly limited.

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. Operating results of its foreign subsidiary 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. Evergreen Solar has operated as one reportable segment since 2007.

F-8

     Through December 19, 2006, the Company owned 64% of Sovello AG (“Sovello”), a joint venture created to develop and operate facilities in Germany, and consolidated the financial statements of Sovello 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 Sovello to one-third on December 19, 2006, the Company has applied the equity method of accounting for its share of Sovello’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 Sovello through December 19, 2006 and the Company’s one-third share of Sovello net income for the period December 20, 2006 through December 31, 2006 and the years ended December 31, 2007 and 2008. The Company’s Consolidated Balance Sheets at December 31, 2007 and 2008 include the Company’s investment in Sovello as a single line item. The functional currency for Sovello is the Euro.

     The Company’s preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reported periods. Estimates are used when accounting for the collectability of receivables, valuing deferred tax assets, provisions for warranty claims and inventory obsolescence.

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

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, 2007 and 2008, 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, 2007 and 2008, there were unrealized gains of $59,000 and $26,000, respectively, which are reported as part of stockholders’ equity.

     The following table summarizes the Company’s marketable securities as of December 31, 2007, with maturity dates ranging from January 2008 through August 2009 (in thousands):

	Amortized		Unrealized		Fair
	Cost		Gains		Value
Commercial paper	$	41,473	$	18	$	41,491
Corporate bonds		25,770		32		25,802
Asset backed securities		2,973		9		2,982
Marketable Securities	$	70,216	$	59	$	70,275

F-9

     The following table summarizes the Company’s marketable securities as of December 31, 2008, with maturity dates ranging from January 2009 through August 2009 (in thousands):

			Unrealized
	Amortized		Gains			Fair
	Cost		(Losses)			Value
Government Obligations	$	9,997	$	3		$	10,000
Commercial paper		44,852		24			44,876
Corporate bonds		21,746		(1	)		21,745
Marketable Securities	$	76,595	$	26		$	76,621

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.

     The table below summarizes the Company’s concentration of accounts receivable for the years ended December 31, 2006, 2007 and 2008:

	2006			2007			2008
% of accounts receivable
Donauer Solartechnik		14	%		—			—
NVT, LLC		33	%		—			—
SunPower Corporation (formerly PowerLight)		15	%		27	%		20	%
Ralos Vertriebs GmbH		2	%		—			13	%
Solar City		—			—			14	%
AEE Solar		11	%		4	%		6	%
EWS GmbH & Co. KG		8	%		10	%		4	%
Targray		—			13	%		—
Top 5 customers		81	%		67	%		64	%

     In addition, since April 2007 we have entered into multi-year silicon supply agreements with four suppliers. Under our silicon supply agreements with DC Chemical, Wacker, Nitol, and Silpro, we have silicon under contract that provides over 12,000 metric tons of silicon through 2019. During 2009, DC Chemical is expected to provide approximately 65% of our 2009 expected requirements.

INVENTORY

     Inventory is valued at lower of cost or market determined on a first-in, first-out basis. Certain factors may impact the net 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

F-10

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 considers 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 and 2008, the Company entered into multi-year polysilicon supply agreements with several suppliers, most of which required a prepayment under the contract. These prepayments, which are included on the balance sheet in Prepaid Cost of Inventory, are not refundable and would be difficult to recover if a supplier defaults on its obligations. The amount of prepayments classified as short-term is based upon the value of the silicon contracted to be delivered during the upcoming year.

GUARANTOR ARRANGEMENTS

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 is due to expire upon termination of the lease in 2010. In connection with this arrangement, the Company invested in a certificate of deposit pledged to a commercial bank which was classified as restricted cash in the Company’s 2007 balance sheet. The restriction on the cash has since been released and security for the letter of credit has been provided under the Company’s line of credit.

FIXED ASSETS

     Fixed assets are recorded at cost. Provisions for depreciation are based on their estimated useful lives using the straight-line method over a period of three to seven years for all laboratory and manufacturing equipment, computers, and office equipment, and forty years for the building. The costs for constructing assets are recorded in assets under construction and are depreciated from the date these assets are put to use. For those assets requiring a period of time to get them ready for their intended use, the Company capitalizes a portion of its interest costs as part of the historical cost of acquiring the asset. Leasehold improvements are depreciated over the shorter of the remainder of the lease’s term or the estimated life of the improvements. Upon retirement or disposal, the cost of the disposed asset 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.

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 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, 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.

F-11

REVENUE RECOGNITION AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

     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 Sovello.

     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.

     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.

VALUE-ADDED TAXES

     The Company accounts for foreign 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

     Other 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

F-12

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 11 for further information regarding the Company’s stock-based compensation assumptions and expenses.

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, 2006, 2007 and 2008 does not include approximately 19.4 million, 19.7 million and 38.2 million potential shares of common stock equivalents outstanding at December 31, 2006, 2007 and 2008, respectively, as their inclusion would be anti-dilutive. Common stock equivalents include outstanding common stock options, unvested restricted stock awards, common stock warrants and convertible debt.

     In connection with the sale of notes on June 26, 2008, the Company entered into a common stock lending agreement with an affiliate of the lead underwriter pursuant to which the Company loaned 30,856,538 shares of its common stock to the affiliate (see Note 10). These shares were considered issued and outstanding for corporate law purposes at the time they were loaned; however, at the time of the loan they were not considered outstanding for the purpose of computing and reporting earnings per share because these shares were to be returned to the Company no later than July 15, 2013, the maturity date of the notes. On September 15, 2008 and October 3, 2008, respectively, the lead underwriter and its affiliate filed for protection under Chapter 11 of the federal Bankruptcy Code. As a result of the bankruptcy filing, the lead underwriter’s affiliate was contractually required to return the shares to the Company. The Company has since demanded the immediate return of all outstanding borrowed shares, however, the shares have not yet been returned. While the Company believes it is exercising all of its legal remedies, it has included these shares in its per share calculation on a weighted average basis due to the uncertainty regarding the recovery of the borrowed shares.

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. The Company currently operates as one segment.

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, and forty years for the building. 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.

F-13

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, 2007 and 2008. 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 June 2008, the FASB issued FSP EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities” (“FSP EITF 03-6-1”). FSP EITF 03-6-1 clarified that all outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends participate in undistributed earnings with common shareholders. Awards of this nature are considered participating securities and the two-class method of computing basic and diluted earnings per share must be applied. FSP EITF 03-6-1 is effective for fiscal years beginning after December 15, 2008. The Company is currently assessing the impact of FSP EITF 03-6-1 on its consolidated financial position and results of operations.

     In May 2008, the FASB issued FSP No. APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)” (“FSP No. APB 14-1”), which clarifies the accounting for convertible debt instruments that may be settled in cash (including partial cash settlement) upon conversion. The FSP No. APB 14-1 requires issuers to account separately for the liability and equity components of certain convertible debt instruments in a manner that reflects the issuer’s nonconvertible debt (unsecured debt) borrowing rate when interest cost is recognized. The FSP No. APB 14-1 requires bifurcation of a component of the debt, classification of that component in equity and the accretion of the resulting discount on the debt to be recognized as part of interest expense in the Company’s consolidated statement of operations. The FSP No. APB 14-1 requires retrospective application to the terms of instruments as they existed for all periods presented. The FSP No. APB 14-1 is effective as of January 1, 2009 and early adoption is not permitted. The Company believes that FSP No. APB 14-1 is applicable to its 2008 Senior Convertible Notes which will primarily result in the recognition of additional interest expense and, as a result, will be reflected in its first quarter 2009 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” (“SFAS No. 159”). 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. The Company adopted SFAS No. 159 effective January 1, 2008. Upon adoption, the Company did not elect the fair value option for any items within the scope of SFAS No. 159 and, therefore, the adoption of SFAS No. 159 did not have an impact on its consolidated financial statements.

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3. INVENTORY

     Inventory consisted of the following (in thousands):

	December 31,
	2007		2008
Raw materials	$	6,468	$	17,928
Work-in-process		1,014		3,910
Finished goods		612		1,662
	$	8,094	$	23,500
Prepaid cost of inventory	$	143,035	$	183,889
Less: current portion		—		11,696
Noncurrent portion	$	143,035	$	172,193

     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 $12.5 million at December 31, 2008 exchange rates).

     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 $15.0 million in prepayments to Nitol.

     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. Prepayments are classified as short-term based upon the value of silicon contracted to be delivered during the next twelve months. The Company carries these prepayments on its balance sheet at cost and periodically evaluates the status of the vendor’s underlying project intended to fulfill the silicon contract.

     On December 7, 2007, the Company entered into a multi-year silicon 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 silicon 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 $41.8 million at December 31, 2008 exchange rates) at an interest rate of 3.0% compounded annually. The difference between this rate and prevailing market rates at that time is recorded as an adjustment to the cost of inventory. This loan is presented on the balance sheet as loan receivable from silicon supplier.

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4. FIXED ASSETS

     Fixed assets consisted of the following at December 31 (in thousands):

	Useful	December 31,
	Life	2007			2008
Land		$	—		$	119
Building	40 years		—			97,957
Laboratory and manufacturing equipment	3-7 years		53,323			182,109
Computer and office equipment	3-7 years		1,320			4,594
Leasehold improvements	Lesser of 15 to 20		13,592			16,413
	years or lease term
Assets under construction			67,125			173,353
			135,360			474,545
Less: Accumulated depreciation and fixed asset write-offs			(20,719	)		(70,881	)
		$	114,641		$	403,664

     During 2007, the Commonwealth of Massachusetts support program awarded the Company $20.0 million in grants towards the construction of its Devens, Massachusetts manufacturing facility, virtually all of which has been received as of December 31, 2008. The grant has been capitalized as a reduction of the construction costs. 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 per annum that are not created. Because 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.

     In conjunction with the closing of the Company’s Marlboro, Massachusetts pilot manufacturing facility on December 31, 2008, it recorded write-offs of leasehold improvements and other related building costs with a net book value of approximately $5.4 million and equipment of approximately $20.9 million. In addition to the closure of Marlboro, the Company incurred charges of approximately $8.0 million to write-off R&D equipment that supported now-obsolete technologies. 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 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.

     Depreciation expense for the years ended December 31, 2006, 2007 and 2008 was $9.3 million, $7.4 million and $18.2 million, respectively, exclusive of the write downs noted above.

     As of December 31, 2008, the Company had outstanding commitments for capital expenditures of approximately $60.4 million, primarily for the construction and equipment for its Devens facility and for its new Midland, Michigan facility.

5. INVESTMENT IN SOVELLO AG

     Through December 19, 2006, the Company owned 64% of Sovello and consolidated the financial statements of Sovello 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 Sovello to one-third on December 19, 2006, the Company has applied the equity method of accounting for its share of Sovello’s operating results from December 20, 2006 forward in accordance with APB 18 “Equity Method of Accounting for Investments in Common Stock.”

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     The financial information for Sovello for the years ended December 31, 2006, 2007 and 2008 is as follows (in thousands):

	For the Years Ended December 31,
	2006			2007		2008
Revenue	$	59,295		$	193,613	$	323,911
Cost of goods sold		51,160			159,781		247,567
Other expenses		9,006			27,320		50,034
Net income (loss)		(871	)		6,512		26,310

	As of December 31,
	2007		2008
Current assets	$	205,460	$	241,871
Non-current assets		350,155		408,347
Current liabilities		141,068		181,550
Non—current liabilities		282,293		318,627

     The European Commission is currently reviewing certain investment grants relating to the construction of the Sovello 1 and Sovello 2 facilities. Grants of approximately 9 million Euros relating to Sovello 1 (which have been received by Sovello) and up to 18 million Euros relating to the combined Sovello 1 and Sovello 2 facilities (which have been earned but are yet to be received) are under review.

     If an unfavorable ruling by the European Commission is received by Sovello, which would require repayment of any grants already received, or if any of the grants earned but not yet received by Sovello are denied payment, then the Company would be obligated to fund its pro-rata share of the lost grant amounts through further loans or equity contributions. Sovello believes that it qualified for the investment grants and continues to challenge the European Commission’s assertions. Accordingly, Sovello has not recorded any repayment provisions in its financial statements for the year ended December 31, 2008. Sovello and its shareholders, including the Company, agree with Sovello’s position on the matter.

     As of December 31, 2008, Sovello is in violation of one of its bank loan financial covenants. The financial covenant violation allows the bank to exercise its termination rights and call the loan. However, the bank has temporarily waived the financial covenant violation and is currently negotiating with Sovello and its shareholders to amend the loan agreement. In accordance with an Undertaking made to the bank syndicate by the Company, the Company could be required to provide its pro rata share of any additional funding required to complete Sovello 3 under certain circumstances. Based on the current negotiation with the bank, the Company anticipates providing additional funds to Sovello in the form of a loan or additional equity investment. If the Company, Sovello, and Sovello’s other shareholders cannot obtain an amendment to Sovello’s loan agreement, this could adversely impact Sovello’s liquidity, require the Company to make additional investments in Sovello and potentially impact the Company’s net realizable value of its investment in Sovello.

Evergreen Solar Loans to Sovello

     In January 2007, the Company, REC and Q-Cells entered into a new shareholder loan agreement with Sovello. Under the terms of the shareholder loan agreement, Sovello repaid all outstanding shareholder loans at that time, plus accrued interest, in exchange for a new shareholder loan of 30 million Euros from each shareholder. In addition, the Company, REC and Q-Cells entered into two additional shareholder agreements with Sovello in June 2008 and December 2008. The June 2008 agreement was for a total of approximately 11.7 million Euros from each shareholder with the Company’s share denominated in U.S. dollars. The December 2008 agreement was for a total of approximately 8.0 million Euros from each shareholder with the Company’s share denominated in U.S. dollars of which half was advanced as of December 31, 2008. The table below summarizes the principal and terms of the Company’s share of these outstanding loans as of December 31, 2008:

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Date of Loan	Principal (EUR)		Principal (USD)		Interest Rate			Original Date Due
January 25, 2007	€	30,000,000	$	41,757,000		5.43	%	December 31, 2009	*
June 26, 2008	€	—	$	18,174,000		6.71	%	December 31, 2009	*
December 22, 2008	€	—	$	5,600,000		6.00	%	June 30, 2010	*

* Due upon the earlier of the completion of an initial public offering or other liquidity event generating sufficient cash to repay the loan.

6. LONG TERM DEBT

Subordinated Convertible Notes

     On June 29, 2005, the Company issued Convertible Subordinated Notes (“Notes”) in the aggregate principal amount of $90.0 million with interest on the Notes semiannually at the annual rate of 4.375%. The Company received proceeds, net of offering costs, of $86.9 million a portion of which was used to increase research and development spending on promising next generation technologies, to explore further expansion opportunities and to fulfill its commitments with Sovello. On July 7, 2008, the Company announced that it had requested U.S. Bank National Association, a trustee under the indenture, to issue a notice of redemption to holders of the Notes to redeem on July 22, 2008 (the “Redemption Date”) all outstanding Notes at a redemption price of 100% of the principal amount thereof, plus accrued and unpaid interest to the Redemption Date. All of the notes were converted to common stock of the Company and the Company issued 12,178, 607 shares of common stock to the note holders on July 22, 2008.

Senior Convertible Notes

     On June 26, 2008, the Company entered into an underwriting agreement for the sale by the Company to the public of $325.0 million aggregate principal amount of 4% Senior Convertible Notes due 2013 (the “Senior Notes”). The Company granted to the underwriters a 30-day option to purchase up to an additional $48.75 million aggregate principal amount of Senior Notes. On July 2, 2008, the Company completed its public offering of $373.75 million aggregate principal amount of its Senior Notes which includes the underwriter’s exercise of their option. Net proceeds to the Company from the offering, including the cost of the capped call transaction (see Capped Call), were approximately $325.8 million. The Company’s financing costs associated with the Senior Notes are being amortized ratably over the five year term.

The Senior Notes bear interest at the rate of 4% per year, payable semi-annually in arrears on January 15 and July 15 of each year, beginning on January 15, 2009, with an effective interest cost of approximately 4.4%. The Senior Notes will mature on July 15, 2013 unless previously repurchased by the Company or converted in accordance with their terms prior to such date. The Senior Notes will not be redeemable at the Company’s option prior to the stated maturity date. If certain fundamental changes occur at any time prior to maturity, holders of the Senior Notes may require the Company to repurchase their Senior Notes in whole or in part for cash equal to 100% of the principal amount of the Senior Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the date of repurchase. The fair value of the Company’s Senior Notes is estimated based on quoted market prices which were trading at an average of approximately 33% of par value as of December 31, 2008, or approximately $123.3 million.

F-18

At maturity and upon certain other events, including a change of control and when the trading price of the Company’s common stock exceeds 130% of the then effective conversion price, the Senior Notes are convertible into cash up to their principal amount and shares of the Company’s common stock for the remainder, if any, of the conversion value in excess of such principal amount at the initial conversion rate of 82.5593 shares of common stock per $1,000 principal amount of Senior Notes (equivalent to an initial conversion price of $12.1125 per share). Subject to certain exceptions and limitations, the holder of a note for $1,000 principal amount that is converted when the Company’s common stock is trading at the conversion price of $12.1125 (or lower) would receive $1,000 (or less) in cash, and the holder of a note for $1,000 principal amount that is converted when the Company’s common stock is trading above the conversion price of $12.1125 would receive $1,000 in cash and shares of the Company’s common stock to the extent that the market value of the Company’s common stock multiplied by the conversion rate, which is initially 82.5593, exceeds $1,000. If a non-stock change of control occurs and a holder elects to convert Senior Notes in connection with such non-stock change of control, such holder may be entitled to an increase in the conversion rate. The conversion rate may also be adjusted under certain other circumstances, including, but not limited to, the issuance of stock dividends and payment of cash dividends. In accordance with EITF 90-19 “Convertible Bonds with Issuer Option to Settle Cash Upon Conversion and the subsequent guidance in EITF 03-07, “Accounting for the Settlement of the Equity Settled Portion of a Convertible Debt Instrument That Permits or Requires the Conversion Spread to be Settled in Stock”, the Senior Notes have been accounted for like traditional convertible debt, with no bifurcation of the conversion feature recognized as a separate asset or liability.

For years ended December 31, 2006, 2007 and 2008, the Company recorded approximately $3.6 million, $3.0 million and $9.4 million, respectively, in combined interest expense associated with its Senior Notes and Notes prior to their redemption, and capitalized interest of approximately $350,000, $983,000 and $5.0 million, respectively.

Capped Call

In connection with the Company’s Senior Notes offering on June 26, 2008, the Company entered into a capped call transaction with respect to the Company’s common stock (the “Capped Call”) with an affiliate of the lead underwriter in order to reduce the dilution that would otherwise occur as a result of new common stock issuances upon conversion of the Senior Notes. The Capped Call had an initial strike price of $12.1125 per share, subject to certain adjustments, which matched the initial conversion price of the Senior Notes, and had a cap price of $19.00 per share.

The capped call transaction was designed to reduce the potential dilution resulting from the conversion of the Senior Notes into shares of common stock, and effectively increase the conversion price of the Senior Notes for the Company to $19.00 per share from the actual conversion price to the note holders of $12.11 per share. The total premium to be paid by the Company for the capped call was approximately $68.1 million, of which $39.5 million was paid contemporaneously with the closing of the Senior Notes offering and the remaining $28.6 million was required to be paid in nine equal semi annual installments beginning January 15, 2009. In accordance with FAS 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity” and EITF 00-19, “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock”, the capped call instrument has been classified as equity and therefore the up-front capped call premium plus the present value of the future installments were recorded in additional paid-in capital. As this instrument does not qualify as a derivative under FAS 133, “Accounting for Derivative Instruments and Hedging Activities”, it will not be subject to mark to market adjustments in future periods.

On September 15, 2008 and October 3, 2008, respectively, the lead underwriter and its affiliate, filed for protection under Chapter 11 of the federal Bankruptcy Code, each an event of default under the transaction. As a result of the default, the affiliate is not expected to perform its obligations if such obligations were to be triggered and the Company’s obligations under the agreement have been suspended. The Company believes it has the right to terminate the Capped Call based on the defaults that occurred. Accordingly the remaining premium liability under the Capped Call was reversed against equity.

In connection with the sale of the Senior Notes, the Company also entered into a common stock lending agreement (see Note 10 Common Stock Lending Agreement).

F-19

7. LINE OF CREDIT

     On October 16, 2008, the Company entered into a Loan and Security Agreement with a bank for a credit facility that provides for a $40 million secured revolving line of credit, which may be used to borrow revolving loans or to issue letters of credit on its behalf, and includes a foreign exchange sublimit and a cash management services sublimit. This credit facility replaces a $25 million secured revolving line of credit which matured on July 4, 2008. The interest rates on borrowings under the line of credit will be 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. The credit facility matures on October 16, 2010, 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, 2008, there were approximately $3.0 million of outstanding letters of credit. As collateral and support for the loans to be made under the credit facility, the Company pledged controlling interests in its domestic subsidiaries to the bank, and the Company’s domestic subsidiaries have made unconditional guaranties of the Company’s indebtedness and entered into security agreements with the bank.

     The credit facility contains a financial covenant requiring the Company to maintain during the term of the credit facility a combination of cash and available borrowing base under the line of at least $80 million, including at least $40 million in cash in an account with 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 Company was in compliance with these covenants at December 31, 2008.

     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.

8. 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

     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. When we recognize revenue, we accrue a liability for the estimated future costs of meeting our warranty obligations. We make and revise this estimate based on the number of solar panels shipped and our historical experience with warranty claims. During 2008, we re-evaluated potential warranty exposure as a result of the substantial increase in production volumes at our Devens, Massachusetts manufacturing facility. As such, we increased our estimated future warranty costs to approximately $1.2 million as of December 31, 2008.

     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 affected not only by our 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 our 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.

F-20

     The following table summarizes the activity regarding the Company’s warranty accrual for the years ended December 31, 2007 and 2008, respectively (in thousands):

	2007			2008
Balance at beginning of year	$	705		$	705
Warranty costs accrued		58			585
Warranty costs incurred		(58	)		(108	)
Balance at end of year	$	705		$	1,182

Sovello Debt Guarantee

On April 30, 2007, the Company, Q-Cells and REC entered into a Guarantee and Undertaking Agreement in connection with Sovello entering into a loan agreement with a syndicate of lenders led by Deutsche Bank AG (the “Guarantee”). The loan agreement provides Sovello with aggregate borrowing availability of up to 142.0 million Euros. Pursuant to the Guarantee, the Company, Q-Cells and REC each agreed to guarantee a one-third portion of the loan outstanding, up to 30.0 million Euros of Sovello’s repayment obligations under the loan agreement. At December 31, 2007 the Company had $41 million deposited in a Deutsche Bank AG account fulfilling its obligation under the Guarantee, which was classified as restricted cash on the balance sheet. Effective September 30, 2008 the Guarantee and associated restriction on the Company’s $41 million of cash deposited with Deutsche Bank AG were released.

9. FAIR VALUE MEASUREMENTS

     In September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 157, “Fair Value Measurements,” (“SFAS 157”), which was effective for fiscal years beginning after November 15, 2007 and for interim periods within those years. This statement defines fair value, establishes a framework for measuring fair value and expands the related disclosure requirements. This statement applies under other accounting pronouncements that require or permit fair value measurements. The statement indicates, among other things, that a fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. SFAS 157 defines fair value based upon an exit price model.

     Relative to SFAS 157, the FASB issued FASB Staff Positions (FSP) 157-1 and 157-2. FSP 157-1 amends SFAS 157 to exclude SFAS No. 13, “Accounting for Leases,” and its related interpretive accounting pronouncements that address leasing transactions, while FSP 157-2 delays the effective date of the application of SFAS 157 to fiscal years beginning after November 15, 2008 for all nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis. The Company adopted SFAS 157 as of January 1, 2008, with the exception of the application of the statement to non-recurring nonfinancial assets and nonfinancial liabilities, and there was no significant impact of adoption on its consolidated financial statements.

     In October 2008, the FASB issued FSP 157-3 “Determining Fair Value of a Financial Asset in a Market That Is Not Active” (FSP 157-3). FSP 157-3 clarified the application of SFAS No. 157 in an inactive market. It demonstrated how the fair value of a financial asset is determined when the market for that financial asset is inactive. FSP 157-3 was effective upon issuance, including prior periods for which financial statements had not been issued. The implementation of this standard did not have a material impact on the Company’s consolidated financial position and results of operations.

Valuation Hierarchy

     SFAS 157 establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows:

F-21

          Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

          Level 2-Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

          Level 3-Unobservable inputs that reflect the Company’s assumptions about the assumptions that market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available, including its own data.

A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

The following table provides the assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2008 (in thousands):
 

Fair Value Measurements
Year ended December 31, 2008

			Quoted Prices		Using Significant		Using Significant
	Total		in Active		Other Observable		Unobservable
	Carrying		Markets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)
Money markets	$	65,599	$	65,599	$	—	$	—
Government obligation		10,000		—		10,000		—
Marketable securities		66,621		—		66,621		—

Valuation Techniques

     Money Market funds are measured at fair value using unadjusted quoted prices in active markets for identical securities and are classified within Level 1 of the valuation hierarchy. Marketable securities are measured using quoted prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (for example interest rates and yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks, and default rates) and inputs that are derived principally from or corroborated by observable market data by correlation or other means and are classified within Level 2 of the valuation hierarchy.

10. STOCKHOLDER’S EQUITY

     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. At the Company’s annual meeting of stockholders on June 18, 2008, the stockholders approved a resolution increasing the number of authorized shares of common stock from 150,000,000 to 250,000,000, the amount reflected on the Company’s balance sheet as of December 31, 2008. In addition, 1,500,000 shares were authorized for future issuance under the Company’s 2000 Stock Option and Incentive Plan. At December 31, 2008, 12,150,000 shares of common stock were authorized for

F-22

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 a June 2004 warrant agreement.

     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 which began in late 2008 and continuing through 2014. Concurrent with the execution of the supply agreement, DC Chemical purchased 3.0 million shares of the Company’s common stock at the then current market value. In addition the company issued and additional 10.75 million shares of transfer restricted common stock. The restrictions on the common stock will lapse upon the delivery of 500 metric tons of silicon 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.

     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).

     Net proceeds to the Company from the combined DC Chemical stock purchase and public offering transactions were approximately $170.7 million.

     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). The net proceeds to the company from the public offering were approximately $166.7 million.

Common Stock Lending Agreement

     Concurrent with the offering and sale of the Senior Notes on June 26, 2008, the Company entered into a common stock lending agreement (the “Common Stock Lending Agreement”) with an affiliate (the “Common Stock Borrower”) of the lead underwriter, pursuant to which the Company loaned 30,856,538 shares of its common stock (the “Borrowed Shares”) to the Common Stock Borrower. The Common Stock Borrower offered the 30,856,538 shares in a separate registered offering. The Common Stock Borrower received all of the proceeds from the sale of the borrowed common stock. In consideration for the issuance of the Borrowed Shares, the Common Stock Borrower paid the Company a nominal loan fee. The Common Stock Borrower is required to deliver to the Company 30,856,538 shares of its common stock upon the earliest of (i) July 15, 2013, (ii) the Company’s election, at such time that the entire principal amount of notes ceases to be outstanding, (iii) the mutual agreement of the Company and the Common Stock Borrower, (iv) the Company’s election, upon a default by the Common Stock Borrower, and (v) the Common Stock Borrower’s election, at any time. The obligations of the Common Stock Borrower under the Common Stock Lending Agreement are guaranteed by the lead underwriter.

     These shares were considered issued and outstanding for corporate law purposes at the time they were loaned; however, at the time of the loan they were not considered outstanding for the purpose of computing and reporting earnings per share because these shares were to be returned to the Company no later than July 15, 2013, the maturity date of the notes. On September 15, 2008, the lead underwriter filed for protection under Chapter 11 of the federal Bankruptcy Code and the Common Stock Borrower was placed into administration proceeding in the United Kingdom. As a result of the bankruptcy filing and the administration proceeding, the Common Stock Lending Agreement automatically terminated and the Common Stock Borrower was contractually required to return the shares to the Company. The Company has since demanded the immediate return of all outstanding borrowed shares, however, the shares have not yet been returned. While the Company believes it is exercising all of its legal remedies, it has included these shares in its per share calculation on a weighted average basis due to the uncertainty regarding the recovery of the borrowed shares.

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11. 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):

	For the Years ended December 31,
	2006		2007		2008
Cost of revenue	$	420	$	617	$	1,214
Research and development expenses		1,562		1,633		1,538
Selling, general and administrative expenses		3,080		4,008		3,548
Facility start-up		—		124		946
	$	5,062	$	6,382	$	7,246

     Stock-based compensation costs capitalized as part of the construction costs of the Company’s Devens manufacturing facility were approximately $25,000 and $447,000 for the years ended December 31, 2007 and 2008, respectively.

Stock Incentive Plans

     The Company is authorized to issue up to 12,150,000 shares of common stock pursuant to its Amended and Restated 2000 Stock Option and Incentive Plan (the “2000 Plan”), of which 2,197,996 shares are available and reserved for future issuance or future grant as of December 31, 2008. 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.

F-24

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

				Average
	Shares			Exercise Price
	(in thousands)
Outstanding at January 1, 2006		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
Granted		—			—
Exercised		(442	)		2.38
Forfeited		(55	)		6.44
Outstanding at December 31, 2008		3,688		$	4.65

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     The following table summarizes information about stock options outstanding at December 31, 2008:

						Options Outstanding				Options Exercisable
						Weighted
						Average		Weighted				Weighted
Range of						Remaining		Average				Average
Exercise				Number		Contractual		Exercise		Number		Exercise
Prices				Outstanding		Life (Years)		Price		Exercisable		Price
				(in thousands)						(in thousands)
$	0.87	$	1.60		37		4.22	$	1.49		37	$	1.49
	1.61		1.61		1,638		4.94		1.61		1,638		1.61
	1.68		2.40		483		4.88		2.12		483		2.12
	2.45		5.00		379		5.15		3.65		339		3.53
	5.27		7.30		480		6.10		7.01		372		6.99
	7.59		13.39		278		6.61		9.83		247		9.92
	13.97		13.97		7		7.07		13.97		4		13.97
	14.00		14.00		35		1.84		14.00		35		14.00
	15.09		15.09		335		7.15		15.09		167		15.09
	19.00		19.00		16		1.84		19.00		16		19.00
					3,688		5.39	$	4.65		3,338	$	4.00

     The aggregate intrinsic value of outstanding options as of December 31, 2008 was $3.2 million. 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, 2006, 2007 and 2008 were approximately $10.2 million, $11.5 million and $4.3 million, respectively. The weighted average grant-date fair value of stock options granted during the year ended December 31, 2007 was $9.39 and no options were granted during 2008. As of December 31, 2008, there was $1.7 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 0.8 years. Total cash received for the exercise of stock options was $2.5 million, $3.3 million and $1.0 million for the years ended December 31, 2006, 2007 and 2008, respectively.

     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 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, 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 assumptions:

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

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     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 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. There were no options granted for the year ended December 31, 2008.

     The Company values restricted stock units and restricted stock awards at the grant date fair value of the underlying shares, adjusted for expected forfeitures. Restricted stock activity is summarized as follows:

				Weighted-
				Average
				Grant Date
	Shares			Fair Value
	(in thousands)
Outstanding at January 1, 2006		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
Granted		696			9.21
Vested		(339	)		8.12
Forfeited		(62	)		10.64
Outstanding at December 31, 2008		3,132		$	10.94

     For the year ended December 31, 2008, included in grants of restricted shares are 696,000 shares of the Company’s common stock with a fair value of $6.4 million that were granted to employees, and which vest over a four year period.

     Included in the outstanding restricted shares are 1.6 million shares of performance-based restricted stock. The Company granted 800,000 shares of performance-based restricted stock to the Company’s executive officers in February 2007 and 100,000 to an 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. Also, in February 2006, the Company granted 800,000 shares of performance-based restricted stock to the Company’s executive officers, of which 100,000 shares have since been cancelled due to an employee termination, 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

F-27

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. These Restricted Share Awards expire five years after issuance if they have not vested.

     The aggregate intrinsic value of outstanding restricted stock awards, including performance based awards, as of December 31, 2008 was $10.0 million. During the years ended December 31, 2006, 2007 and 2008, approximately 32,000, 133,000 and 339,000 shares of restricted stock vested, respectively, with an aggregate vest-date fair value of approximately $280,000, $1.4 million and $2.8 million, respectively.

     As of December 31, 2008, there was $12.2 million of unrecognized compensation expense 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 2.4 years.

12. FACILITY START-UP COSTS

     In preparing for the operation of its Devens, Massachusetts facility and its Midland, Michigan facility, the Company incurred start-up costs of approximately $1.4 million and $30.6 million for the years ended December 31, 2007 and 2008, respectively. Start-up costs include salaries and personnel related costs, consulting costs, consumable material costs, and other miscellaneous costs associated with preparing and qualifying these facilities for production. Construction on the facility in Devens began in September 2007 with the first solar panels produced late in the third quarter of 2008. Construction on the facility in Midland began during the third quarter of 2008 with production scheduled to begin during the second half of 2009.

13. RESTRUCTURING CHARGES

On December 31, 2008, the Company ceased production at its Marlboro pilot manufacturing facility as part of its restructuring plan to lower overhead costs and reduce overall cash requirements. Ongoing R&D activities will continue to be performed at its research and development facility in Marlboro and advanced manufacturing piloting activities will be performed at its Devens manufacturing facility with little or no impact to overall production capacity. Virtually all of the Marlboro pilot manufacturing facility employees were transferred to the Devens manufacturing facility to fill open positions associated with its second phase. The charges recorded were comprised primarily of leasehold improvements and other related building costs of $5.4 million, equipment of approximately $20.9 million, inventory and spare parts of $3.9 million, and salaries and personal costs related associated with severance of approximately $0.2 million.

14. 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):

	2006			2007			2008
Income tax benefit at US federal statutory tax rate	$	(9,068	)	$	(5,696	)	$	(28,878	)
State income taxes, net of federal tax effect		(1,844	)		(1,160	)		(9,503	)
Permanent items		1,409			1,188			938
Other items – tax credits, expiration of NOL’s, other		(8,112	)		(207	)		(288	)
Change in deferred tax asset valuation allowance		17,615			5,875			37,731
	$	—		$	—		$	—

F-28

     As of December 31, 2008, the Company had federal and state net operating loss carryforwards of approximately $148.8 million and $105.9 million, respectively, available to reduce future taxable income which begin to expire in 2009. In addition, the Company has excess tax deductions related to equity compensation of approximately $24.4 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 $3.1 million and $1.3 million, respectively, which begin to expire in 2018 and state Investment Tax Credit carryforwards of approximately $7.8 million which began to expire in 2009, available to reduce future tax liabilities.

     Under the provisions of the Internal Revenue Code, certain substantial changes in the Company’s ownership may result in a limitation on the amount of net operating loss carryforwards and research and development credit carryforwards which can be used in future years.

     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.

     Deferred tax assets consist of the following at December 31, 2007 and 2008, respectively (in thousands):

	2007			2008
Gross deferred tax assets
Net operating loss carryforwards	$	35,777		$	57,265
Tax credit carryforwards		2,771			7,322
Capitalized R&D expenses		14,856			18,044
Accrued expenses and deferred compensation		3,347			4,882
Basis difference in synthetic debt		—			14,876
Other, net		—			3,050
Total gross deferred tax assets		56,751			105,439
Less: gross deferred tax liabilities
Depreciation		(4,301	)		(1,626	)
Basis difference in Sovello AG investment in foreign partnership		(8,504	)		(7,692	)
Other, net		(556	)		—
Deferred tax asset valuation allowance		(43,390	)		(103,813	)
Net deferred tax liability	$	—		$	(7,692	)

     The Company 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. The Company has approximately $1.7 million of reserves related to uncertain tax positions on research and development tax credits as of December 31, 2008.  The Company is in the process of completing a study of its research and development tax credits which could result in additional changes to these credits.  Since a full valuation allowance has been provided against these carryforwards, any adjustment to the carryforwards upon completion of the study would be offset by a corresponding reduction to the valuation allowance.

F-29

     A reconciliation of the Company’s gross changes to uncertain tax positions from January 1, 2008 through December 31, 2008 is as follows (in thousands):

Balance at January 1, 2008	$	—
Additions based on current year tax positions		141
Additions based on prior year tax positions		1,854
Reductions based on prior year tax positions		—
Settlements		—
Balance at December 31, 2008	$	1,995

     Interest and penalties charges, if any, related to unrecognized tax benefits would be classified as income tax expense in the accompanying statement of operations. At December 31, 2007 and December 31, 2008 the Company did not have any interest or penalties accrued related to uncertain tax positions. In many cases, the Company’s uncertain tax position are related to years that remain subject to examination by relevant tax authorities. Since the Company is in a loss carryforward position, the Company is generally subject to examination by the U.S. federal, state and local income tax authorities for all tax years in which a loss carryforward is available.

     As a result of additional investments made in Sovello by the Company’s strategic partners in 2006 and 2007, the Company has recorded a deferred income tax liability of $7.4 million associated with the gains recognized from these additional investments, in addition to cumulative translation adjustments. The corresponding amounts are included in shareholders equity. Certain of these amounts should have been recorded with the corresponding gains recorded in 2006 and 2007. Management has concluded that the impact of these adjustments on the current and prior periods is immaterial.

15. 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 Sovello AG. 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 initial purpose of Sovello was to develop and operate facilities to manufacture solar products based on the Company’s proprietary wafer manufacturing 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 technology.

Segment Revenue and Gross Profit

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

	Evergreen
	Solar, Inc.			Sovello AG			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-30

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:

	For the Years Ended December 31,
	2006			2007			2008
By geography:
United States		37	%		82	%		58	%
Germany		48	%		7	%		28	%
Spain		13	%		—			7	%
All other		2	%		11	%		7	%
		100	%		100	%		100	%
By customer:
SunPower Corporation		10	%		31	%		31	%
Ralos Verriebs GmbH		10	%		1	%		15	%
SunEdison		—			14	%		2	%
groSolar		6	%		12	%		4	%
Donauer Solartechnik		13	%		1	%		—
All other		61	%		41	%		48	%
		100	%		100	%		100	%

16. RELATED PARTY TRANSACTIONS

     In the normal course of business, the Company purchases silicon from REC and DC Chemical under existing supply agreements. For the years ended December 2007 and 2008, the Company purchased silicon from REC for approximately $3.0 million and $2.6 million, respectively. For the year ended December 31, 2008 the Company purchased silicon from DC Chemical for approximately $9.2 million. As of December 31, 2007 and 2008, the Company had nothing outstanding to REC. As of December 31, 2007 and 2008, the Company had $0 and $1.3 million outstanding to DC Chemical, respectively.

     The Company receives fees from Sovello for its marketing and sale of Sovello panels, as well as management of customer relationships and contracts, and royalty payments for its technology contribution to Sovello, which combined totaled approximately $11.5 million and $16.7 million for the years ended December 31, 2007 and 2008, respectively. The Company also receives payments from Sovello as a reimbursement of certain research and development and other support costs it incurs that benefit Sovello. For the years ended December 31, 2007 and 2008, the Company earned $1.9 million and $384,000, respectively, from Sovello 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 from/to Sovello. For the years ended December 31, 2007 and 2008, the Company purchased $6.7 million and $280,000 in materials from Sovello, respectively, and sold $88,000 and $425,000 in materials to Sovello, respectively. At December 31, 2007 and 2008 amounts due from Sovello of $4.3 million and $1.9 million, respectively, and amounts due to Sovello of $29.6 million and $22.8 million, respectively, are included on the Company’s balance sheet.

17. 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

F-31

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, 2008, employees paid the company approximately $621,000 to purchase approximately 110,000 shares of common stock and the Company recognized approximately $521,000 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, 2008, there were approximately 222,000 shares issued under the ESPP since its inception and approximately 278,000 shares of common stock available and reserved for future issuance or future grant under the ESPP.

18. 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, 2008, no holders of warrants associated with the Company’s Common Stock Private Placement exercised their warrants to purchase shares of the Company’s common stock.

19. 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 $110,000, $144,000 and $219,000 to participating employees during the fiscal years ended December 31, 2006, 2007, and 2008, respectively.

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20. 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 was 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, 2007 balance sheet. During 2008 the restriction on the cash was released as security for the letter of credit has now been provided under the Company’s line of credit.

     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, 2008 (in thousands):

2009	$	3,191
2010		2,189
2011		1,020
2012		892
2013		361
Thereafter		—
Total	$	7,653

     Occupancy expense, which includes rent, property taxes, and other operating expenses associated with all of the Company’s Marlboro locations, was $1.3 million, $1.4 million and $1.5 million for the years ended December 31, 2006, 2007, and 2008, respectively.

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OTHER COMMITMENTS

     As of December 31, 2008, the Company had outstanding commitments for capital expenditures of approximately $60.4 million, expected to be fulfilled in 2009, primarily for the construction and equipment for its Devens facility and equipment for its new Midland facility. Additionally, the Company had approximately $752.8 million in commitments for raw material purchases over the next 11 years as of December 31, 2008.

21. 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
(In thousands, except per share data)
Unaudited

	Mar 31,			Jun 30,			Sept 29,			Dec 31,			Mar 29,			Jun 28,			Sept 27,			Dec 31,
	2007			2007			2007			2007			2008			2008			2008			2008
Revenues:
Product	$	12,627		$	13,407		$	15,383		$	16,917		$	18,259		$	18,118		$	17,803		$	41,065
Royalty and fee		1,471			1,985			2,807			5,269			4,688			4,638			4,264			3,124
Total revenues		14,098			15,392			18,190			22,186			22,947			22,756			22,067			44,189
Cost of revenues		11,269			11,952			13,660			15,957			15,231			14,863			20,820			42,159
Gross profit (loss)		2,829			3,440			4,530			6,229			7,716			7,893			1,247			2,030
Operating expenses:
Research and development		5,224			5,144			5,381			4,845			4,943			5,887			5,541			5,668
Selling, general and administrative		4,740			5,536			5,079			5,253			4,992			5,894			6,174			6,808
Equipment write-offs		—			—			—			—			—			—			—			8,034
Facility start-up		—			—			358			1,046			3,419			8,573			8,956			9,675
Restructuring charges		—			—			—			—			1,862			2,708			2,709			23,134
Total operating expenses		9,964			10,680			10,818			11,144			15,216			23,062			23,380			53,319
Operating loss		(7,135	)		(7,240	)		(6,288	)		(4,915	)		(7,500	)		(15,169	)		(22,133	)		(51,289	)
Other income (expense), net
Foreign exchange gains (losses), net		599			145			(133	)		(167	)		3,814			(158	)		(5,017	)		(2,717	)
Interest income		1,250			2,160			3,268			3,096			3,027			2,735			4,242			2,691
Interest expense		(909	)		(927	)		(914	)		(662	)		(316	)		(46	)		(2,500	)		(3,034	)
Other income (expense), net		940			1,378			2,221			2,267			6,525			2,531			(3,275	)		(3,060	)
Loss before minoritiy interest and equity income		(6,195	)		(5,862	)		(4,067	)		(2,648	)		(975	)		(12,638	)		(25,408	)		(54,349	)
Minority interest in Sovello AG		—			—			—			—			—			—			—			—
Equity income (loss) from interest in Sovello AG		(24	)		(1,646	)		404			3,436			950			3,716			1,558			2,211
Net income (loss)	$	(6,219	)	$	(7,508	)	$	(3,663	)	$	788		$	(25	)	$	(8,922	)	$	(23,850	)	$	(52,138	)
Net income (loss) per share:
Basic	$	(0.09	)	$	(0.09	)	$	(0.04	)	$	0.01		$	(0.00	)	$	(0.08	)	$	(0.18	)	$	(0.32	)
Diluted	$	(0.09	)	$	(0.09	)	$	(0.04	)	$	0.01		$	(0.00	)	$	(0.08	)	$	(0.18	)	$	(0.32	)
Weighted average shares used in computing basic and diluted net income (loss) per share:
Basic		67,001			82,562			98,343			98,802			108,816			118,327			132,034			161,678
Diluted		67,001			82,562			98,343			102,656			108,816			118,327			132,034			161,678

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22. 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, 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			(5,279	)		43,390
Allowance for doubtful accounts		100		(1	)		(14	)		85
Year ended December 31, 2008
Reserves and allowances deducted from assets accounts:
Income tax valuation allowance		43,390		37,731			22,692			103,813
Allowance for doubtful accounts		85		(5	)		—			80

F-35

Schedule 1 — Condensed Financial Information of the Registrant
Condensed Statement of Operations

(In thousands, except per share data)

	For the Year
	Ended
	December 31,
	2006
Product revenues	$	44,866
Cost of revenues		42,184
Gross profit		2,682
Operating expenses:
Research and development		17,109
Selling, general and administrative		16,339
Loss on disposal of fixed assets		1,526
Total operating expenses		34,974
Operating loss		(32,292	)
Other income, net		3,787
Equity income from interest in Sovello AG		495
Net loss	$	(28,010	)
Net loss per share (basic and diluted)	$	(0.43	)
Weighted average shares used in computing basic and diluted net loss per share		65,662

F-36

Schedule 1 — Condensed Financial Information of the Registrant
Condensed Statement of Cash Flows

(In thousands)

	For the Year
	Ended
	December 31,
	2006
Net cash used in operating activities	$	(17,431	)
Net cash used in investing activities		(21,936	)
Net cash provided by financing activities		16,277
Net decrease in cash and cash equivalents		(23,090	)
Cash and cash equivalents at beginning of year		29,918
Cash and cash equivalents at end of year	$	6,828

F-37

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 2^nd day of March, 2009, 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)	March 2, 2009
/s/ MICHAEL EL-HILLOW Michael El-Hillow	Chief Financial Officer and Secretary (Principal Financial and Accounting Officer)	March 2, 2009
/s/ ALLAN H. COHEN	Director	March 2, 2009
Allan H. Cohen
/s/ EDWARD C. GRADY	Director	March 2, 2009
Edward C. Grady
/s/ DR. PETER W. COWDEN	Director	March 2, 2009
Dr. Peter W. Cowden
/s/ TOMMY CADWELL	Director	March 2, 2009
Tommy Cadwell
/s/ DR. SUSAN F. TIERNEY	Director	March 2, 2009
Dr. Susan F. Tierney

EXHIBIT INDEX

Number	Description
3.1(1)	Third Amended and Restated Certificate of Incorporation (Exhibit 3.2)
3.2(1)	Second Amended and Restated By-laws (Exhibit 3.3)
3.3(2)	Certificate of the Powers, Designations, Preferences and Rights of the Series A Convertible Preferred Stock of the Registrant (Exhibit 4.4)
3.4(3)	Certificate of Designations of Rights, Preferences and Privileges of Series B Preferred Stock of the Registrant (Exhibit 3.4)
3.5(4)	Certificate of Amendment of Third Amended and Restated Certificate of Incorporation (Exhibit 3.1)
4.1(5)	Indenture between the Registrant and U.S. Bank National Association, as Trustee, dated as of July 2, 2008 (Exhibit 4.1)
4.2(5)	First Supplemental Indenture between the Company and U.S. Bank National Association, as Trustee, dated as of July 2, 2008 (Exhibit 4.2)
4.3(5)	Form of 4% Senior Convertible Note due 2013 (Exhibit 4.2)
4.4(1)	Specimen Certificate for Shares of the Registrant’s Common Stock (Exhibit 4.1)
10.1(1)§	1994 Stock Option Plan (Exhibit 10.1)
10.2(4)§	Amended and Restated 2000 Stock Option and Incentive Plan (Exhibit 10.1)
10.3§	First Amendment to Amended and Restated 2000 Stock Option and Incentive Plan
10.4(6)§	Amended and Restated 2000 Employee Stock Purchase Plan (Exhibit 99.2)
10.5(4)§	First Amendment to Amended and Restated 2000 Employee Stock Purchase Plan (Exhibit 10.2)
10.6(1)	Lease Agreement between the Registrant and W9/TIB Real Estate Limited Partnership, dated January 31, 2000, as amended (Exhibit 10.5)
10.7(1)	Form of Indemnification Agreement between Registrant and each of its directors and executive officers (Exhibit 10.9)
10.8(7)	Stock and Warrant Purchase Agreement, dated June 16, 2004 (Exhibit 10.1)
10.9(7)	Warrant Agreement, dated June 21, 2004 (Exhibit 10.2)

E-1

Number	Description
10.10(7)	Form of Warrants (Exhibit 10.3)
10.11(7)	Registration Rights Agreement, dated June 21, 2004 (Exhibit 10.4)
10.12(8)	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)
10.13(9)†	Amended and Restated License and Technology Transfer Agreement by and between the Registrant and Sovello AG (f/k/a EverQ GmbH)(“Sovello”), dated September 29, 2006 (Exhibit 10.18)
10.14(10)	Stock Purchase Agreement by and between the Registrant and DC Chemical Co., Ltd. (“DC Chemical”), dated April 17, 2007 (Exhibit 10.1)
10.15(10)	Stockholders Agreement by and between the Registrant and DC Chemical, dated April 17, 2007 (Exhibit 10.2)
10.16(11)†	Supply Agreement by and between the Registrant and DC Chemical, dated April 17, 2007 (Exhibit 10.3)
10.17(12)	Addendum to the Amended and Restated License and Technology Transfer Agreement between the Registrant and Sovello, dated April 30, 2007 (Exhibit 10.2)
10.18(13)†	Supply Agreement between the Registrant and Wacker Chemie AG, effective as of August 31, 2007 (Exhibit 10.1)
10.19(14)†	Supply Agreement between the Registrant and Solaricos Trading Ltd., dated as of October 24, 2007 (Exhibit 10.34)
10.20(14)†	Memorandum of Understanding by and among the Registrant, Sovello, Q-Cells and REC, dated as of October 25, 2007 (Exhibit 10.35)
10.21(14)	Lease Agreement between the Registrant and the Massachusetts Development Finance Agency (“MDFA”), dated November 20, 2007 (Exhibit 10.36)
10.22(14)	Project Grant Agreement between the Registrant and MDFA, dated November 20, 2007 (Exhibit 10.37)
10.23(14)	Project Grant Agreement between the Registrant and Massachusetts Technology Park Corporation, dated November 20, 2007 (Exhibit 10.38)
10.24(14)†	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 (Exhibit 10.39)
10.25(14)	Subordinated Loan Agreement between the Registrant and Silpro, dated December 7, 2007 (Exhibit 10.40)
10.26(14)†	Supply Agreement by and between the Registrant and DC Chemical, dated January 30, 2008 (Exhibit 10.41)

E-2

Number	Description
10.27(15)†	Master Supply Agreement by and between the Registrant and Ralos Vertriebs GmbH, dated May 21, 2008 (Exhibit 10.1)
10.28(15)†	Master Supply Agreement by and between the Registrant and Wagner & Co Solartechnik GmbH, dated June 18, 2008 (Exhibit 10.2)
10.29(15)	Share Lending Agreement dated as of June 26, 2008 between the Registant and Lehman Brothers International (Europe), through Lehman Brothers Inc. (Exhibit 10.5)
10.30(15)	Capped Call Transaction agreement dated June 26, 2008 between the Registrant and Lehman Brothers OTC Derivatives Inc. (Exhibit 10.6)
10.31(16)	Loan and Security Agreement, dated as of October 16, 2008, by and between the Registrant and Silicon Valley Bank (Exhibit 10.1)
10.32††	Master Supply Agreement by and between the Registrant and IBC Solar AG, dated July 14, 2008
10.33††	Amended and Restated Sales Representative Agreement by and Between the Registrant and Sovello dated October 6, 2008
10.34††	Quad Technology License Agreement by and Between the Registrant and Sovello dated October 6, 2008
10.35	Addendum to Quad Technology License Agreement by and Between the Registrant and Sovello dated October 6, 2008
10.36	Undertaking of the Registrant dated October 6, 2008
10.37††	Amended and Restated Master Joint Venture Agreement by and among the Registrant, Q-Cells, REC and Sovello AG, dated November 6, 2008
10.38§	Form of Amended and Restated Change of Control Severance Agreement between the Registrant and Richard M. Feldt
10.39§	Form of Amended and Restated Change of Control Severance Agreement between the Registrant and each of Michael El-Hillow and Brown Williams
10.40§	Form of Amended and Restated Change of Control Severance Agreement between the Registrant and each of Rodolfo Archbold, J. Terry Bailey, Richard G. Chleboski, Gary T. Pollard and Carl Stegerwald
10.41§	Amended and Restated Management Incentive Policy
10.42††	PV License Agreement by and between ESLR1, LLC and TISICS Ltd. dated September 5, 2007
23.1	Consent of PricewaterhouseCoopers LLP, an Independent Registered Public Accounting Firm
23.2	Consent of Leipzig, Germany PricewaterhouseCoopers AG

E-3

Number	Description
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
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	Sovello AG (f/k/a EverQ GmbH) balance sheet for the period ended December 31, 2006
99.2	Sovello AG (f/k/a EverQ GmbH) income statement for the period December 20 to December 31, 2006
99.3	Sovello AG (f/k/a EverQ GmbH) cash flow for the period December 20 to December 31, 2006
99.4	Sovello AG (f/k/a EverQ GmbH) notes to the financial statements for the period December 20 to December 31, 2006
99.5	Sovello AG (f/k/a EverQ GmbH) Opinion Letter, Leipzig, Germany PricewaterhouseCoopers AG

†	Confidential treatment granted as to certain portions.
††	Confidential treatment requested as to certain portions.
§	Indicates a management contract or compensatory plan, contract or arrangement.
(1)	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.
(2)	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.
(3)	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.
(4)	Incorporated herein by reference to the exhibits to the Registrant’s Current Report on Form 8-K dated June 18, 2008 and filed on June 23, 2008. The number given in parenthesis indicates the corresponding exhibit number in such Form 8-K.

E-4

(5)	Incorporated herein by reference to the exhibits to the Registrant’s Current Report on Form 8-K dated July 2, 2008 and filed on July 7, 2008. 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 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.
(9)	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.
(10)	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.
(11)	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.
(12)	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.
(13)	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.
(14)	Incorporated herein by reference to the exhibits to the Registrant’s Annual Report on Form 10-K for the period ended December 31, 2007 filed on February 27, 2008. The number given in parenthesis indicates the corresponding exhibit number in such Form 10-K.
(15)	Incorporated herein by reference by reference to exhibits to the Registrant’s Quarterly Report on Form 10-Q for the period ended June 28, 2008 filed on August 4, 2008. The number given in parenthesis indicated the corresponding exhibit number in such Form 10-Q.
(16)	Incorporated herein by reference to the exhibits to the Registrant’s Current Report on Form 8-K, dated October 16, 2008 and filed on October 16, 2008. The number given in parenthesis indicates the corresponding exhibit number in such Form 8-K.

E-5

EX-10.3

Exhibit 10.3

EVERGREEN SOLAR, INC.

First Amendment to Amended and Restated
2000 Stock Option and Incentive Plan

     The Evergreen Solar, Inc. Amended and Restated 2000 Stock Option and Incentive Plan (the “Plan”) is hereby amended as follows, effective January 1, 2009, pursuant to a resolution adopted by the Board of Directors at its meeting held December 16, 2008:

1. The final sentence of Section 7(f) is amended to read as follows:

After the grant of a Performance Unit or Performance Share, the Board, in its sole discretion, may reduce or waive any performance objective or other vesting provisions for such Performance Unit or Performance Share in the event of a Participant’s death or disability, or upon the occurrence of an Acquisition (as defined in Section 9(e)).

2. The following new section 10(g) is added to the Plan:

(g) SECTION 409A REQUIREMENTS. Notwithstanding anything to the contrary in this Plan or any Award agreement, the following provisions shall apply to any payments and benefits otherwise payable to or provided to a Participant under this Plan and any Award:

     (i) For purposes of Section 409A of the Code, each “payment” (as defined by Section 409A of the Code) made under this Plan or an Award shall be considered a “separate payment.” In addition, for purposes of Section 409A of the Code, payments shall be deemed exempt from the definition of deferred compensation under Section 409A of the Code to the fullest extent possible under (x) the “short-term deferral” exemption of Treasury Regulation § 1.409A-1(b)(4), and (y) (with respect to amounts paid as separation pay no later than the second calendar year following the calendar year containing the Participant’s “separation from service” (as defined for purposes of Section 409A of the Code)) the “two years/two-times” separation pay exemption of Treasury Regulation § 1.409A-1(b)(9)(iii), which are hereby incorporated by reference.

     (ii) If the Participant is a “specified employee” as defined in Section 409A of the Code (and as applied according to procedures of the Company and its affiliates) as of his or her separation from service, to the extent any payment under this Plan or an Award constitutes deferred compensation (after taking into account any applicable exemptions from Section 409A of the Code), and to the extent required by Section 409A of the Code, no payments due under this Plan or an Award may be made until the earlier of: (x) the first day of the seventh month following the Participant’s separation from service, or (y) the Participant’s date of death; provided, however, that any payments delayed during this six-month period shall be paid in the aggregate in a lump sum, without interest, on

the first day of the seventh month following the Participant’s separation from service.

     (iii) If this Plan or any Award fails to meet the requirements of Section 409A of the Code, neither the Company nor any of its affiliates shall have any liability for any tax, penalty or interest imposed on the Participant by Section 409A of the Code, and the Participant shall have no recourse against the Company or any of its affiliates for payment of any such tax, penalty or interest imposed by Section 409A of the Code.

3. The following clause is added to the end of section 9(i): “provided that Board’s ability to accelerate the vesting of Awards under the Plan for any participant is limited to change in control transactions and the death, disability and retirement of such participant.

     IN WITNESS WHEREOF, the Company has caused this First Amendment to the Plan to be executed on this 16th day of December, 2008.

EVERGREEN SOLAR, INC.
By:	/s/ Michael El-Hillow
	Name:	Michael El-Hillow
	Title:	Chief Financial Officer

2

EX-10.32

Exhibit 10.32

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.

EXECUTION COPY

MASTER SUPPLY AGREEMENT

     This Master Supply Agreement (“Agreement”) is entered into as of this 14th day of July 2008, (“Effective Date”) by and between Evergreen Solar, Inc., having its principal place of business at 138 Bartlett Street, Marlboro, MA 01752-3016 USA (“Evergreen”), and IBC Solar AG., having its principal place of business at Am Hochgericht 10, 96231 Bad Staffelstein, DE (“Purchaser”).

     1. DEFINITIONS

          (a) “Affiliate” means any entity controlled by a party at the relevant time. For the purposes of this definition, “control” means the beneficial ownership of more than fifty percent (50%) of the voting rights of the respective entity.

          (b) “Flash Test Data” means the flash test data specified by Evergreen in this Agreement or relevant documentation provided by Evergreen, a sample of which is included in Schedule 4.

          (c) “Listed Port” means any one of the ports listed on Schedule 1.

          (d) “Purchase Order” means a purchase order for the purchase of Products properly placed under this Agreement.

          (e) “Product” means any Product set forth in Schedule 2 to be supplied by Evergreen to Purchaser under this Agreement.

          (f) “Quarter” means calendar quarter (i.e., any of (i) January, February and March, (ii) April, May and June, (iii) July, August and September, or (iv) October, November and December). Notwithstanding the foregoing, in the event of a change of Evergreen’s fiscal year end, upon Evergreen’s request, the parties shall promptly discuss and mutually agree to corresponding adjustments, if any, to the definition of “Quarter,” and references to the calendar year, to the extent necessary or appropriate.

          (g) “Specifications” means the technical specifications for a Product, as expressly set forth in Schedule 2 for the respective Product, and as may be changed from time to time as set forth in Section 7 below.

          (h) “Termination Date” means the Termination Date as defined in Schedule 1 under the heading “Supply Period.”

          (i) “Territory” means the Territory specified in Schedule 1.

          (j) “User Documentation” means end user documentation for the Products provided by Evergreen to Purchaser for distribution to end users with the Products.

     2. SCOPE

          This Agreement is intended by Evergreen and Purchaser to serve as the operating requirements, terms and conditions regarding their respective business relationship. It is the intent of the parties that this Agreement shall prevail over the terms and conditions of any Purchase Order, acknowledgment form or other instrument even if such Purchase Order, acknowledgment form or other instrument purports to supersede these terms and is accepted by Evergreen unless such Purchase Order, acknowledgment form or other instrument expressly references this Section 2. Any other additional or different terms in Purchase Orders that are not signed by both Parties, or other such documents of Purchaser in connection with orders or acknowledgements are hereby deemed to be material alterations and notice of objection to and rejection of them is hereby given.

     3. ANNUAL AND QUARTERLY COMMITMENTS

          (a) Annual Commitments. Evergreen agrees to sell to Purchaser, and Purchaser agrees to buy Products, in each case, on an annual, firm commitment basis, the aggregate quantities for the specified years set forth on Schedule 1 (for each applicable year, the “Annual Commitment”). Nothing in Section 3(b) (Quarterly Commitments) or Section 3(c)(Product Type Allocation) shall require Evergreen to sell to Purchaser more than, or allow Purchaser to purchase or Evergreen to sell less than, the Annual Commitment.

          (b) Quarterly Commitments. No later than [****] of each calendar year, Purchaser shall provide Evergreen with a binding forecast of the quantities of total Product and corresponding quantities of each Product type that Purchaser wishes to purchase in each respective Quarter of such upcoming year, which quarterly quantities of Product and Product type shall be within twenty percent (20%) and thirty percent (30%) of the applicable Annual Commitment and shall, in the aggregate, equal Purchaser’s applicable Annual Commitment; provided that for the first Quarter of any calendar year Purchaser may specify Products in quantities ranging from a minimum of ten percent (10%) to a maximum of thirty percent (30%) of the applicable Annual Commitment. Notwithstanding Purchaser’s forecast, Evergreen shall provide for shipment (i) in each Quarter Products in quantities ranging from a minimum of twenty percent (20%) to a maximum of thirty percent (30%) of the applicable Annual Commitment and (ii) on an annual calendar year basis, the applicable Annual Commitment; provided that for the first Quarter of any calendar year Evergreen may specify Products in quantities ranging from a minimum of ten percent (10%) to a maximum of thirty percent (30%)

-2-

          of the applicable Annual Commitment. Evergreen shall notify Purchaser within [****] business days of receipt of Purchaser’s forecast if Evergreen does not accept Purchaser’s forecast for the full amount specified by Purchaser for each applicable Quarter in Purchaser’s forecast.

          (c) Product Type Allocation. Purchaser acknowledges that certain elements of the Product manufacturing process limit Evergreen’s ability to guarantee availability of volumes of different Product types at different times as would be required to satisfy requests for specific Product types during each Quarterly and Annual Commitment period. In establishing the Quarterly allocations for delivery pursuant to Section 3(b), Evergreen agrees to use reasonable efforts to schedule Quarterly volumes that give effect to Purchaser’s forecasted quantities of Product type for each applicable Quarter and for each applicable Annual Commitment; provided, however, that Evergreen reserves the right in its discretion to adjust the allocations of Product types based actual production levels of different Product types and Evergreen’s need to satisfy requests for allocations of different Product types from its other customers.

          (d) Additional Orders. Orders for Products in excess of the applicable Annual Commitments may be negotiated on a case-by-case basis; provided that, unless otherwise agreed, if Evergreen and Purchaser agree to the terms of Purchase Orders for quantities of Products in excess of any Annual Commitments, such excess amounts will not count towards satisfaction of Purchaser’s Annual Commitment for any subsequent calendar year.

     4. PURCHASE ORDERS

          (a) In General. Purchaser shall place Purchase Orders for and buy Products in accordance with the terms and conditions of this Agreement. Purchaser shall place Purchase Orders at least three (3) months in advance of the respective requested shipment date.

          (b) Placement of Orders and Acceptance. Purchase Orders may be sent by telefax or other electronic media approved by Evergreen and shall specify Product type, quantity, destination, and requested shipment date. Purchaser’s Purchase Orders shall request a shipment date, and, provided the Product conforms with the Purchase Order and is available for shipment by Evergreen as of the end of the respective Quarter for which Purchaser delivered the Purchase Order, Purchaser shall be deemed to have accepted shipment, within the respective Quarter in which Purchaser is required to purchase the respective quantity. Provided a Purchase Order is for Products within the required commitments of this Agreement, including the forecast amounts accepted by Evergreen pursuant to Section 3 (Annual And Quarterly Commitments) and the timing requirements set forth in Section 4(a) (In General) , and does not conflict with the terms and conditions of this Agreement, Evergreen shall acknowledge and accept such Purchase Order by written notice or e-mail transmission delivered to Purchaser within [****] business days following Evergreen’s receipt of such Purchase Order. Evergreen’s acknowledgement shall provide expected shipment dates and quantities of each Product type for the respective Purchase Order. Purchase Orders will be binding upon Evergreen when accepted by Evergreen and confirmed by delivery of Evergreen’s order acknowledgment according to this Section 4(b).

          (c) Shipment Date and Rescheduling. Purchaser may cancel or reschedule for later shipment any Purchase Order; provided, however, that Purchaser shall not violate the

-3-

          other requirements of this Agreement including Section 3 (Annual and Quarterly Commitments). For the avoidance of doubt, Purchaser shall not reschedule Purchase Orders such that Purchaser would request or accept shipment in the respective Quarter of less than the quantities Purchaser is required to purchase in such Quarter under Section 3(b) (Quarterly Commitments) or otherwise violate the terms of this Agreement.

          (d) Placement of Orders by Affiliates. Evergreen shall accept Purchase Orders meeting the requirements of this Agreement from third parties that are Affiliates of Purchaser’s, provided that Purchaser has confirmed in writing that such third parties are Affiliates. Such Purchase Orders shall be deemed to have been made by Purchaser under this Agreement, and Evergreen shall have no legal obligation to such Affiliates under this Agreement or under such Purchase Orders. Purchaser shall be responsible for compliance with the terms and conditions of this Agreement, including payment, with respect to any such Purchase Order placed by its Affiliates, and shall indemnify and hold Evergreen harmless for (i) any claims against Evergreen by such Affiliates, except for claims resulting solely from Evergreen’s willful or grossly negligent conduct outside the scope of this Agreement, or (ii) arising from the activities of such Affiliates. Notwithstanding the foregoing, in the event that Purchaser represents that an entity is an Affiliate of Purchaser from which orders are to be accepted hereunder, Evergreen shall have the right to treat such orders as Purchase Orders by an Affiliate of Purchaser under this Section 4(d) (Placement of Orders by Affiliates) notwithstanding such entity’s failure to actually qualify as an Affiliate as defined herein.

     5. PROVISION OF DATA

          (a) End User Statistics and Performance Data. Purchaser shall make reasonable efforts to provide Evergreen anonymous Quarterly reports detailing location and channel in which the Products are sold and installed, but only to the extent such information is known by Purchaser and easily transmittable to Evergreen without undue expense to Purchaser. Subject to the foregoing provision, such reports shall be in a format and include information reasonably requested by Evergreen including without limitation location information (country or area) of the respective sales and installations. Purchaser shall not be required to provide information that gives Evergreen any customer names. In addition, upon Evergreen’s reasonable request, Purchaser shall use reasonable efforts to provide semi-annual performance monitoring data for all Purchaser’s installations for which monitoring data is available and easily transmittable to Evergreen without undue expense to Purchaser and provided that Purchaser has the right to share such data. Purchaser will use reasonable commercial efforts to request the right to share data with Evergreen and to the extent it cannot share data if the names of end users are associated with the data Purchaser will share the data anonymously to the extent permitted by law.

          (b) Flash Test Data. Evergreen shall provide Purchaser with Flash Test Data for the Products in an electronic format within three (3) days after the Products leave the factory dock. Evergreen will make reasonable efforts to ensure this data is in a format suitable for loading into Purchaser’s database.

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     6. SHIPMENT

          (a) Shipment. Except as otherwise may be agreed by Evergreen and Purchaser in writing, Evergreen will deliver the Products under accepted Purchase Orders [****]. Evergreen shall use commercially reasonable efforts to make the Products available for shipment in accordance with the estimated shipment date provided in Evergreen’s acknowledgement for each applicable Purchase Order.

          (b) Packaging and Inspection. All Products shall be prepared for shipment in a manner that follows commercially reasonable practices and is reasonably adequate to ensure safe arrival. Purchaser or its agent must report any visible damage to packaged Products at the final destination of shipment. If no such visible damage or packaging concerns are reported at such time, Purchaser shall be deemed to have accepted the Products packaged for shipment in acceptable condition in compliance with Evergreen’s packaging obligations. Acceptance or deemed acceptance of the packaged Products for shipment shall in no way reduce Purchasers right to inspect Products pursuant to Section 14

     7. PRODUCT CHANGES

          Evergreen shall have the right to make any changes to the Products that do not affect the form, fit, function, or state of certification of the Products without notice. In the event that Evergreen knows of proposed changes to the Specifications that will affect the form, fit or function of the Products, Evergreen shall inform Purchaser at least ninety (90) days in advance prior to implementing such changes. Evergreen shall not incur any liability thereby or any obligation to provide such changes or improvements on Products previously purchased or sold by Purchaser. If such changes cause Purchaser (or its Affiliates’) to cancel or modify Purchase Orders because Purchaser’s (or Affiliates’) end users refuse to accept the Products as modified, then Purchaser (or its Affiliates) will not incur any liability as a result of such change or cancellation in any Purchase Order and the Quarterly requirements represented by such changes or cancellations, as the case may be.

     8. PRICES AND PAYMENT

          (a) Product Prices. Prices for the Products shall be [****] to any port listed in Schedule 1. Unless otherwise specified in Schedule 1, invoices for Products will be issued upon shipment.

          (b) Taxes. All prices listed in Schedule 1 are net prices to which VAT, sales or other taxes and levies shall be added as required under applicable statutes, rules and regulations. Except as required by the shipping terms [****] as agreed pursuant to Section 6(a)), all taxes and levies that are by applicable statutes, rules and regulations required to be paid by Evergreen shall be paid by Evergreen. All taxes or levies that are by applicable statutes, rules and regulations required to be paid by Purchaser shall be paid by Purchaser.

          (c) Payment. Terms of payment are net [****] days from the date of shipment (allowing payment to be made [****] days from the estimated issue date on the bill of lading for each shipment on the fifth [****] following shipment date). All payments are non-

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refundable, except as provided in Section 13 (Warranty Services) and shall be made in Euros by wire transfer. Evergreen reserves the right to withhold shipment or request advance payment or letter of credit arrangements be made in the event Purchaser is delinquent in making payments. Late payments shall bear interest at the rate of eighteen percent (18%) per year from the date due, accruing daily, or the highest rate permitted by law, whichever is less. Purchaser’s payments must be current in order for Purchase Orders to be accepted.

     9. TERRITORY

     Purchaser shall distribute the Products purchased from Evergreen hereunder solely in the Territory. Purchaser shall not knowingly market, sell, or distribute the Products outside of the Territory or to customers or end users outside the Territory, directly or indirectly, without the prior written approval of Evergreen.

     10. TERM AND TERMINATION

          (a) Term. This Agreement shall commence on the Effective Date and shall terminate on the Termination Date. The term of this Agreement shall be extended for additional one (1) year terms to the extent that the parties agree to minimum quantities and prices applicable to such years and the parties execute a signed, written amendment of Schedule 1, which includes the quantities and prices applicable to such extended term. A copy of any such amended schedule shall be attached to this Agreement. The parties shall discuss whether such extensions are mutually agreeable starting a year prior to the Termination Date.

          (b) Termination for Cause. Either party may immediately terminate this Agreement if the other party fails to cure a material breach of the Agreement within: (i) [****] days of [****] (which may be given at any time after [****]), in the case of non-payment, which shall be deemed a material breach regardless of the amount of such non-payment or (ii) [****] days of [****] (which may be given at any time after [****]).

          (c) Effect of Termination. Upon termination of this Agreement by Evergreen for cause under Section 10(b) (Termination for Cause) above, Evergreen may, at its option, cancel all of Purchaser’s unshipped Purchase Orders without further obligation. Similarly, upon termination of this Agreement by Purchaser for cause under Section 10(b) (Termination for Cause) above, Purchaser may, at its option, cancel all of Purchaser’s Purchase Orders not yet made available for shipment without further obligation. Sections 1 (Definitions) 8 (Prices and Payment), 10(c) (Effect of Termination), 10(d) (No Liability for Termination), 11 (Intellectual Property), 12 (Confidentiality), 13 (Warranty Services), 16 (Limitation of Liability) and 17 (General) shall survive any termination of this Agreement. In addition, any right or legal obligation of a party contained in any addendum or amendment to this Agreement, that by its express term or nature would reasonably extend for a period beyond the term of the Agreement, shall also survive the termination of the Agreement for such extended period.

          (d) No Liability for Termination. In the event of a permitted termination of this Agreement, neither party shall be liable to the other, because of such termination, for

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compensation, reimbursement or damages on account of the loss of prospective profits or anticipated sales or on account of expenditures, inventory, investments, leases or commitments in connection with the business or goodwill of Evergreen or Purchaser. Termination shall not, however, relieve either party of obligations incurred prior to termination of this Agreement.

     11. INTELLECTUAL PROPERTY

          (a) Ownership by Evergreen. Evergreen shall retain all patents and other proprietary rights embodied in the Products and User Documentation and all modifications and derivative works of any of the foregoing. Purchaser hereby agrees to assign, and does hereby assign, to Evergreen ownership of all intellectual property rights in the Products (exclusive of any Improvements made by Purchaser) and User Documentation to the extent that Purchaser may obtain any rights therein or thereto.

          (b) Improvements. Except as otherwise expressly agreed between the parties, if Purchaser makes any Improvement (as defined below) to the Products or User Documentation or intellectual property rights therein, whether or not patentable, Purchaser shall grant and does hereby grant to Evergreen a perpetual, royalty-free, worldwide, non-exclusive license to make, have made, use, sell, offer to sell, sublicense and otherwise exploit such Improvement; provided that such Improvements may only be made, used, sold, offered for sale, sublicensed and otherwise exploited together with the Products and not on a standalone basis. As used herein, “Improvement” means any improvement, enhancement, modification, invention, trade secret, feedback or suggestion that is based on or derived from, or otherwise applicable to, all or any part of the Products or User Documentation.

          (c) User Documentation. Purchaser will not disclose or distribute any documentation provided by Evergreen except User Documentation provided for that purpose. User Documentation may be provided in hard copy form or on electronic media from which Purchaser may make additional copies except as expressly prohibited by Evergreen in writing. Purchaser shall not modify the User Documentation without the prior written consent of Evergreen.

          (d) Trademarks. The parties may use each other’s trademarks, trade names, logos or service marks (collectively, “Trademarks”) in connection with such party’s promotion and distribution of Products only after obtaining the prior written consent of the other party on a case-by-case basis, in its sole discretion, provided that Purchaser may identify Evergreen as the manufacturer and/or supplier of the Products, and Evergreen may identify Purchaser as a distributor of the Products, as the case may be without the need for consent of the other party. Each party’s use of the other’s Trademarks shall fully comply with all guidelines that may be provided by one party to the other concerning the use of the Trademarks. All use of the Trademarks of one party by the other shall inure solely to the benefit of the trademark holder, and neither party shall obtain any rights with respect to any of the Trademarks of the other. Purchaser and its direct and indirect customers shall retain the Trademarks as the Trademarks appear on the Products and User Documentation.

          (e) Proprietary Notices. Purchaser shall not remove any copyright, patent, Trademark or other proprietary notices, markings or legends from the Product or User

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Documentation and shall reproduce all such notices, markings and legends on all copies of the Product and User Documentation permitted under this Agreement.

          (f) No Implied Licenses. No licenses are granted to Purchaser or Evergreen under this Agreement except as expressly set forth in this Section 11 (Intellectual Property) and as implied by Evergreen’s right to use Purchaser data in 5(a) (Customer Statistics and Performance Data), either expressly or by implication, estoppel or otherwise. ALL RIGHTS NOT EXPRESSLY GRANTED HEREIN ARE RESERVED TO EVERGREEN OR PURCHASER, AS THE CASE MAY BE, OR THEIR RESPECTIVE LICENSORS.

     12. CONFIDENTIALITY

          (a) Confidential Information. “Confidential Information” means information in any form that may be disclosed by a party hereto (“Disclosing Party”) to the other party (“Receiving Party”) provided that it shall be either (i) conspicuously marked “Confidential” or “Proprietary” if disclosed to the Receiving Party in tangible form, or (ii) if disclosed orally, is reduced by the Disclosing Party to a writing conspicuously marked “Confidential” or “Proprietary” and given to the Receiving Party within [****] days of such oral disclosure.

          (b) Exclusions. Notwithstanding the provisions of Section 12(a) (Confidential Information), Confidential Information excludes information that the Receiving Party can demonstrate in writing: (i) is or becomes part of the public domain through no fault or breach of the Receiving Party; (ii) is rightfully known to the Receiving Party prior to receipt from the Disclosing Party, as shown by Receiving Party’s written records; (iii) is subsequently rightfully obtained by the Receiving Party from a third party that has the legal right to disclose such information to the Receiving Party; or (iv) is independently developed by the Receiving Party without use of Disclosing Party’s Confidential Information and without the involvement of Receiving Party’s employees who had access to Disclosing Party’s Confidential Information. Receiving party shall be permitted to disclose Disclosing Party’s Confidential Information if such disclosure is required by law, provided that the Receiving Party provides the Disclosing Party with prompt written notice of such requirement prior to such disclosure; or is permitted by the express terms of this Agreement, or by implication in the case of the User Documentation.

          (c) Use and Disclosure. Each party agrees that it (i) shall use such Confidential Information of the other party only to the extent reasonably necessary to perform its obligations or exercise its rights under this Agreement and (ii) shall not disclose, or permit to be disclosed such Confidential Information, either directly or indirectly, to any third party except as permitted under this Agreement or otherwise approved in writing by the other party. Each party agrees to exercise at least reasonable care in protecting the Confidential Information of the other party from unauthorized use and disclosure but in no event less care than such party takes to protect its own Confidential Information. Notwithstanding the foregoing, Purchaser may disclose the Product and User Documentation to third parties in connection with the marketing and sale of the Products pursuant to this Agreement.

          (d) Confidentiality of Agreement. The terms and conditions of this Agreement shall be treated as Confidential Information and shall not be disclosed to any third

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party, except (i) with the other party’s consent, which shall not be unreasonably withheld; (ii) as may be required by law or regulation or in connection with public offerings or securities filings; (iii) in confidence, to its legal counsel, accountants, investors and financial advisors; (iv) in confidence, in connection with the enforcement of this Agreement or rights under this Agreement; and (v) in confidence, as reasonably required in connection with a financing or merger or acquisition of all or substantially all of the business or assets of Evergreen or Purchaser.

          (e) Publicity. The contents of any press release or publicity disclosing any aspect or the existence of the business relationship contemplated by this Agreement shall be subject to mutual agreement of the parties. Neither party shall issue any such press release or publicity without the prior written consent of the other party unless such disclosure is required by law. Notwithstanding the foregoing, the parties shall discuss and cooperate to issue a mutually agreed upon press release promptly upon execution of this Agreement.

     13. WARRANTY SERVICES

          (a) Limited Product Warranty. All Products covered by this Agreement will be warranted to the end user per the conditions of the standard Evergreen warranty statements provided with the Products, a representative copy of which is attached hereto as Schedule 3. Evergreen may modify such warranty from time to time in addition to providing differing warranties for different products and markets on ninety (90) days prior written notice to Purchaser; provided, however that if any such modification materially reduces the warranty provided as a whole set forth in Schedule 3 and such reductions are (i) not substantially consistent with those generally accepted in the industry and (ii) not materially different than the warranty offered all other customers, Purchaser may, on written notice to Evergreen, if Evergreen fails to withdraw its modification of the warranty within ten (10) business days of receipt of such notice, terminate this Agreement in accordance with Section 10(b). In no event will the Purchaser’s warranty on Products be materially different than that offered for Products sold to all other Evergreen customers. It is understood that this warranty is to the end user and not to Purchaser; provided, however, that Evergreen agrees to process warranty claims forwarded to Evergreen from Purchaser in accordance in accordance with Section 13(b) (Warranty Claims).

          (b) Warranty Claims. Purchaser and its service providers shall document and notify Evergreen of claims, questions or concerns Purchaser receives under Evergreen’s warranty with respect to Products sold to Purchaser hereunder. Purchaser shall obtain information from the end user as reasonably requested by Evergreen to enable the parties to determine whether the respective claim arises under the Evergreen warranty or arises from materials or services not provided by Evergreen. In the event of a claim by an end user under Evergreen’s warranty, Evergreen’s satisfaction of the claim with respect to the end user shall be deemed to also satisfy any related claim with respect to Purchaser. Upon Purchaser’s request, Evergreen shall reasonably inform Purchaser as to Evergreen’s processing of respective warranty claims forwarded to Evergreen from Purchaser.

          (c) [****]

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          (d) [****]

          (e) Limitations. Notwithstanding anything to the contrary, the warranties provided by Evergreen do not apply to any Product which has been (i) altered by anyone other than Evergreen or personnel who are authorized by Evergreen and qualified to make repairs or (ii) used in conjunction with any other product if such use results in the defect, (iii) damaged by improper environment, abuse, misuse, attempts to alter or repair without Evergreen’s authorization, accident or negligence, or (iv) used in violation of this Agreement, the User Documentation, or Evergreen’s other written instructions, if any, provided prior to such use.

     14. PRODUCT QUALITY INSPECTION

     Evergreen shall perform a quality inspection to identify obvious defects in Products before making the Products available for shipment to Purchaser, including any defects which would cause the Product not to conform to the specifications set forth in Schedule 5. The parties will from time to time discuss adjustments to the specifications set forth in Schedule 5 that would improve the quality of Products under this Agreement to the extent that Evergreen can effect such improvements in quality following the ramp up of manufacturing operations at its Devens, Massachusetts facility. The program shall be implemented in Evergreen’s reasonable discretion to address issues such as excessive amounts of foreign material in the laminate of the Products, excessive amounts of cells with chips, visible cracks in cells of Products, excessive scratches on the frame of panels and glass, broken leads, damaged insulation, damaged or broken junction-box or improperly fastened frames. Purchaser’s sole remedy for a breach of this Section 14 (Product Quality Inspection) or for Evergreen’s failure to deliver products which comply with the Specifications and Evergreen’s sole liability therefore shall be for Evergreen to repair or replace the nonconforming Products. Purchaser must notify Evergreen of the nonconformity within seven (7) business days of Purchaser’s discovery or notice of the nonconformity. The parties shall cooperate in good faith to address recurring issues regarding quality of the Products.

     THE FOREGOING REMEDIES PROVIDED BY EVERGREEN IN SECTIONS 13 AND 14 ARE THE SOLE AND EXCLUSIVE REMEDIES FOR ANY BREACH OF WARRANTY OR A BREACH OF THIS SECTION 14 AND THE EXPRESS WARRANTIES PROVIDED HEREIN ARE IN LIEU OF ALL OTHER WARRANTIES EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. ANY PROTOTYPES OR PRE-RELEASE PRODUCTS THAT MAY BE FURNISHED BY EVERGREEN ARE FURNISHED “AS IS” WITH NO WARRANTIES OF ANY KIND.

     15. INDEMNIFICATION

          (a) Infringement Indemnification by Evergreen. Evergreen agrees to defend at its own expense any action brought against Purchaser to the extent that it is based on a claim that Evergreen’s Product directly infringes [****], and will pay any costs and damages finally awarded against Purchaser in any such actions which are attributable to such claim. Notwithstanding the foregoing, this Section 15(a) (Indemnification by Evergreen) shall not apply to, and Evergreen shall have no liability for, any claim arising out of or relating to (1) the combination of any Product with any equipment or device not furnished by Evergreen, or (2) use

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of an Improvement or other items provided to or requested by Purchaser, or (3) any modification of any Product by anyone other than Evergreen or its authorized agents, or (4) Purchaser’s failure to install or have installed changes, revisions or updates as instructed and paid for by Evergreen, (5) Evergreen’s compliance with Purchaser’s or an end user’s specifications, designs or instructions if Purchaser had requested such modifications in spite of Evergreen’s notice of possible infringement given to Purchaser in writing before implementation of the applicable specifications, designs or instructions , or (6) use of any Product in material violation of this Agreement, the User Documentation, or Evergreen’s reasonable written instructions, if any, received by Purchaser or end user prior to such use. Should any Product become, or in Evergreen’s opinion be likely to become, the subject of a claim of infringement, Purchaser shall permit Evergreen as Evergreen may elect in its sole discretion and at Evergreen’s expense, to (i) procure for Purchaser the right to continue using such Product, (ii) replace or modify the Product so that it becomes non-infringing or [****]. Evergreen’s sole liability and Purchaser’s sole remedy for infringement claims shall be to obtain indemnity under the provisions of this Section 15(a) (Indemnification by Evergreen); provided, however, in the event that it is commercially unreasonable for Evergreen to procure for Purchaser the right to continue using such Product, or to replace or modify the Product so that it becomes non-infringing, the Quarterly commitments for Product purchases shall be appropriately adjusted.

          (b) Indemnification by Purchaser. Purchaser agrees to defend at its own expense any action brought against Evergreen to the extent that it is based on a claim arising out of or relating to any of the exclusions set forth in Sections 15(a) (1), (2), (3) (but only to the extent that Purchaser carries out or authorizes such modifications ) (4), (5) or (6) of this Section 15 (Indemnification) or Purchaser’s marketing, warranties or distribution of the Products, and will pay any costs and damages finally awarded against Evergreen in any such actions which are attributable to such claim.

          (c) Procedure. Each party’s (“Indemnifying Party’s”) indemnification obligation is subject to the conditions that (i) the other party (“Indemnified Party”) promptly notifies the Indemnifying Party in writing of any such claim, and provides the Indemnifying Party with sole control of the defense of such claim and all negotiations for any settlement or compromise, and (ii) the Indemnified Party provides all information and assistance reasonably requested by the Indemnifying Party for the defense and settlement of such claim.

     16. LIMITATION OF LIABILITY

          (a) EXCEPT WITH RESPECT TO A MATERIAL BREACH OF THE CONFIDENTIALITY OBLIGATIONS SET FORTH IN SECTION 12 (CONFIDENTIALITY), IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND ARISING OUT OF OR RELATED TO THIS AGREEMENT, WHETHER ARISING FROM CONTRACT, TORT OR NEGLIGENCE, INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFIT, LOSS OF GOODWILL, OR SUBSTITUTE PROCUREMENT, OR FOR DAMAGES DUE TO DELAYS IN SHIPMENT, DELIVERY OR USE OF PRODUCTS PURCHASED HEREUNDER, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

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          (b) EXCEPT FOR PURCHASER’S PURCHASE PRICE PAYMENT OBLIGATIONS OR A MATERIAL BREACH OF THE CONFIDENTIALITY OBLIGATIONS SET FORTH IN SECTION 12 (CONFIDENTIALITY), THE TOTAL AGGREGATE LIABILITY OF EACH PARTY ARISING OUT OF OR RELATING TO THIS AGREEMENT (INCLUDING SECTIONS 13 (WARRANTY SERVICES) AND 14 (INDEMNIFICATION)) SHALL NOT EXCEED THE TOTAL PURCHASE PRICE PAID OR PAYABLE BY PURCHASER TO EVERGREEN FOR THE PRODUCTS OR SERVICES TO WHICH SUCH CLAIM RELATES.

          (c) THESE LIMITATIONS OF LIABILITY SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. THIS SECTION DOES NOT EXCLUDE LIABILITY FOR PERSONAL INJURY OR DEATH TO THE EXTENT THAT SUCH LIABILITY CANNOT BE EXCLUDED OR LIMITED UNDER APPLICABLE LAW.

     17. GENERAL

          (a) Relationship. The relationship of the parties is that of independent contractors. There is no relationship of agency, partnership, joint venture, employment or franchise between the parties, and neither party has the authority to bind or incur any obligation on the part of the other.

          (b) Governing Law; Dispute Resolution. This Agreement shall be governed by and construed under the laws of the New York without reference to conflict of laws principles, and not by the 1980 U.N. Convention on Contracts for the International Sale of Goods. Except as otherwise specified in this Agreement or the Schedules hereto, or as may be agreed by the parties, any dispute or claim arising out of or in connection with this Agreement or the performance, breach or termination thereof shall be finally resolved by binding arbitration in accordance with the then current rules of arbitration of the American Arbitration Association (the “Rules”) by a single arbitrator selected in accordance with such rules. Such arbitration shall be held in New York, New York, and the proceedings and all pleadings, filings, written evidence, decisions and other relevant documents shall be in English. Any written evidence in a language other than English shall be submitted with an English translation. Any final decision issued in the arbitration shall be binding and conclusive upon the parties to this Agreement and may be entered as a final judgment by any court of competent jurisdiction. Notwithstanding the foregoing, each party 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 Section and without any abridgment of the powers of the arbitrator.

          (c) Export Laws. Any and all obligations of Evergreen to provide Products, documentation, or other materials shall be subject in all respects to such United States laws and regulations as shall from time to time govern the license and delivery of technology and products abroad by persons subject to the jurisdiction of the United States, including the Export Administration Act of 1979, as amended, any successor legislation, and the Export Administration Regulations issued by the Department of Commerce, Bureau of Export Administration. Each party warrants to the other that it will comply with the Export Administration Regulations and other United States laws and regulations governing exports in

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effect from time to time. In the event Purchaser orders Products other than Spruce Products only manufactured outside of the United States as contemplated in Section 6(a) (Shipment), Purchaser is solely responsible, at its own expense, for obtaining all necessary import and re-export permits and certificates and for the payment of any and all taxes and duties imposed upon the movement and delivery of the Products.

          (d) Notices. All notices or communications of any kind made or required to be given pursuant to this Agreement shall be in writing and delivered to the other party at the address first set forth above, unless either party gives notice to the other party of a change of address.

          (e) Force Majeure. Neither party is liable for its failure or delay to perform its obligations under the Agreement so long as the delay is due to strikes, wars, revolutions, acts of terrorism, fires, floods, explosions, earthquakes, government regulations, or other causes beyond its reasonable control.

          (f) Assignment. Neither party may assign this Agreement without the prior written consent of the other party, except that each party may assign this Agreement to a successor in connection with the transfer of all or substantially all of the business or assets of such party, whether by sale, merger, operation of law or otherwise. Subject to the foregoing sentence, this Agreement will be binding upon and inure to the benefit of the parties hereto, their successors and assigns. Notwithstanding the foregoing, Evergreen may at any time and from time to time pledge or grant a security interest in all or any portion of its rights, title and interest under this Agreement as collateral security to secure obligations of Evergreen; provided that no such pledge or grant of a security interest shall (a) release Evergreen from any of its obligations hereunder or (b) substitute any such pledgee or grantee for Evergreen as a party hereto with any rights or remedies hereunder.

          (g) Language. This Agreement is in the English language only, which language shall be controlling in all respects, and all versions hereof in any other language shall not be binding on the parties hereto. All communications and notices to be made or given pursuant to this Agreement shall be in the English language.

          (h) Miscellaneous. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof and supersedes all prior agreements relating thereto, written or oral, between the parties. Amendments to this Agreement must be in writing, signed by the duly authorized officers of the parties. If any provision of this Agreement is held by a court of competent jurisdiction to be contrary to law the remaining provisions of this Agreement shall remain in full force and effect. No waiver or modification of this Agreement shall be valid unless in writing signed by each party. The waiver of a breach of any term hereof shall in no way be construed as a waiver of any other term or breach hereof. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.

[signature page follows]

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     IN WITNESS WHEREOF, Evergreen and Purchaser acknowledge that they have read this Agreement, including any Exhibits, understand them and agree to be bound by their terms and conditions effective as of the Effective Date.

Evergreen Solar, Inc.		IBC SOLAR AG
By:	/s/ Richard M. Feldt	By:	/s/ Udo MohrStedt
Name:	Richard M. Feldt	Name:	Udo MohrStedt
Title:	Pres. & CEO	Title:	Pres. & CEO
Date:	July 11, 2008	Date:	July 14, 2008

ATTACHMENTS:

Schedule 1 — Additional Terms
Schedule 2 — Products
Schedule 3 — Warranty
Schedule 4 — Flash Test Data Sample
Schedule 5 — Grade A Product Classification Criteria

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Schedule 1

Additional Terms

Territory:

     [****]

Product Applications:

     [****]

Supply Period:

     The supply period shall continue through December 31, 2013 (“Termination Date”).

Listed Ports:

     [****]

Firm Commitment Quantities:

Jan. 1,

Dec. 1

Dec. 1

Dec. 1

Dec. 1

Dec. 1

2008 to

2008 to

2009 to

2010 to

2011 to

2012 to

Nov. 30,

Nov. 30

Nov. 30

Nov. 30

Nov. 30

Nov. 30

Shipment Period

2008

2009

2010

2011

2012

2013

Firm Quantity (MWp)

[****]

[****]

[****]

[****]

[****]

[****]

“Wp” means the specified Watts peak output power of the respective Products. Where used to specify quantity of Products, Wp is the Wp of a unit of the respective Product times the number of units of such Product.

“MWp” means MegaWp, which is 10⁶ Wp.

Prices:

     Pricing is in Euros €/Wp calculated on nominal power of Products. Except as otherwise adjusted pursuant to the Substantial Market Change and Exchange Rate Adjustment pricing adjustment provisions set forth below, the pricing applicable to all Products through 2013 is stated in the following table. The “Scheduled Price” means the price for the respective year according to this table:

Jan. 1,

Dec. 1

Dec. 1

Dec. 1

Dec. 1

Dec. 1

2008 to

2008 to

2009 to

2010 to

2011 to

2012 to

Nov. 30,

Nov. 30

Nov. 30

Nov. 30

Nov. 30

Nov. 30

Shipment Period

2008

2009

2010

2011

2012

2013

White Back Skin

€

[****]

€

[****]

€

[****]

€

[****]

€

[****]

€

[****]

Price Adjustments:

[****]

Schedule 1, Page 2

Schedule 2

Products

     Product 1 (proposed ES-A Series) PV Panel Description/Specifications:

n	Configuration: 6 x 19 standard Evergreen cell configuration; planned 200 Wp to 220 Wp class panel.
n	Panel Rated Minimum Power and Tolerance: Product power tolerance specification for ES-A Series or equivalent Products will be -0% to +4.99Wp.
n	Safety and quality certifications: Product electrical characteristics are based on the results of production line test performed at the MC connectors in accordance with IEC 904-1 at Standard Test Conditions (1000 W/m2 with IEC904-3 reference solar spectral irradiance distribution, AM1.5 and 25C). Evidence of certification per IEC 61730, UL or ETL listing to UL standard 1703 of the foregoing shall be provided to Purchaser prior to first Shipment. IEC 61215: 2005 and CE declaration, as applicable.
n	Cables, Frame Grounding, Glass: Cables will be standard MC or accepted equivalent, and frame grounding holes will be located on the side of the panel frame. Glass will be non-glare, rolled type.

OEM Product

Commencing January 1, 2009, Evergreen will accept orders for Product with the same specifications as Product 1 but such Product will be labeled (or Purchaser will be permitted to label the Product) with Purchaser’s company name and logo together with Evergreen’s name and logo. The details of the label and branding for the OEM Product will be negotiated in good faith by the parties following the execution of this Agreement. In connection with the sale of OEM Product to Purchaser, Evergreen will warranty to the OEM Products directly to Purchaser under the standard Evergreen warranty statements to enable Purchaser, in turn, to issue such warranty under its name to end users. None of the other terms of the Agreement, including without limitation price and delivery and terms, will be modified for the OEM Product sales to Purchaser, but the parties acknowledge they will need to negotiate and agree to certain additional terms typically associated with such an OEM sales relationship, such as terms that address ownership of trademarks, product marking requirements, responsibility for any trademark infringement and product warranty.

Schedule 3

Warranty

Evergreen Solar

Photovoltaic Panels Limited Warranty

Limited Warranty: Materials or Workmanship

Evergreen Solar warrants the panels to be free from defects in materials or workman-ship under normal application, installation, use, and service conditions. The panels must be installed according to the latest Safety, Installation and Operation Manual provided by Evergreen Solar otherwise this warranty will be void. If the product fails to conform to this warranty, then, for a period ending sixty (60) months from date of sale to the original consumer purchaser, Evergreen Solar will, at its option, either repair or replace the product or refund the purchase price. The repair, replacement, or refund remedy shall be the sole and exclusive remedy provided under this warranty.

Limited Warranty: Power Output

Evergreen Solar warrants for a period often (10) years from the date of sale to the original consumer purchaser that the power rating at Standard Test Conditions will remain at 90% or greater of Evergreen Solar’s Minimum Specified Power Rating. Evergreen Solar further warrants for a period of twenty-five (25) years from the date of sale to the original consumer purchaser that the power rating at Standard Test Conditions will remain at 80% or greater of Evergreen Solar’s Minimum Specified Power Rating.

Evergreen Solar will, at its option, repair or replace the product, refund the purchase price, or provide the purchaser with additional panels to make up lost power, provided that such degradation is determined to be due to defects in materials or workmanship under normal installation, application, and use. The panels must be installed according to the latest Safety, Installation and Operation Manual provided by Evergreen Solar otherwise this warranty will be void. The relevant Minimum Specified Power Rating is defined in Evergreen Solar’s product data sheet at the time of shipment. Standard Test Conditions are irradiance of 1000W/m², 25° C cell temperature, and AM 1.5 light spectrum.

Schedule 3, Page 1

Limitations and Conditions

The remedy set forth in these limited warranties shall be the sole and exclusive remedy provided under the extended term warranty, unless otherwise agreed by Evergreen Solar in writing. In Germany, these limited warranties are neither a “guarantee of the quality” of the panel pursuant to §443 BGB (German Civil Code) nor are they an “acceptance of a guarantee” pursuant to §276 BGB,

The limited warranties set forth herein do not apply to any panel which in Evergreen Solar’s sole judgement has been subjected to misuse, neglect, or accident; has been damaged through abuse, alteration, improper installation or application, or negligence in use, storage, transportation, or handling; has not been installed in accordance with the latest Safety, Installation and Operation Manual provided by Evergreen Solar or has in anyway been tampered with or repaired by anyone other than Evergreen Solar or its authorized agent.

The limited warranties do not cover costs associated with panel installation, removal, testing, packaging, transportation, or reinstallation; other costs associated with obtaining warranty service; or costs, lost revenues, or lost profits associated with the performance or nonperformance of defective panels.

Any panels repaired or replaced by Evergreen Solar under a warranty claim shall be covered by the same warranties and original term as the first product purchased under said claim. The term shall not be prolonged or reset from the date of sale to the original consumer purchaser. Any replaced parts or products become the property of Evergreen Solar.

These limited warranties apply only to the first end-user purchaser of the panels or to any subsequent owners of the original building or site where the panels were first installed. The limited warranties set forth herein are expressly in lieu of and exclude all other express or implied warranties, including but not limited to warranties of merchantability and of fitness for particular purpose, use, or application and all other obligations or liabilities on the part of Evergreen Solar, unless such other warranties, obligations, or liabilities are expressly agreed to in writing signed and approved by Evergreen Solar.

Evergreen Solar shall have no responsibility or liability whatsoever for damage or injury to persons or property, or for other loss or injury resulting from any cause whatsoever arising out of or related to the product, including, without limitation, any defects in the panel, or from use or installation. Under no circumstances shall Evergreen Solar be liable for incidental, consequential, or special damages, howsoever caused.

Evergreen Solar’s aggregate liability, if any, in damages or otherwise, shall not exceed the payment, if any, received by seller for the unit of product or service furnished or to be furnished, as the case maybe, which is the subject of claim or dispute. Some jurisdictions do not allow limitations on implied warranties or the exclusion or limitation of damages, so the above I imitations or exclusions may not apply to you.

If a part, provision, or clause of terms and conditions of sale, or the application thereof to any person or circumstance is held invalid, void, or unenforceable, such holding shall not affect and leave all other parts, provisions, clauses, or applications of terms and conditions remaining, and to this end the terms and conditions shall be treated as severable.

This warranty gives you specific legal rights; and you may also have other rights that vary from state to state and country to country. Neither party shall be in any way responsible or liable to the other party, or to any third party, arising out of nonperformance or delay in performance of the terms and conditions of sale due to acts of God, war, riot, strikes, unavailability of suitable and sufficient labor, and any unforeseen event beyond its control, including, without limitations, any technological or physical event or condition which is not reasonably known or understood at the time of sale.

Any claim or dispute regarding these warranties shall be governed by and construed in accordance with the laws of the State of New York (US).

Obtaining Warranty Performance

If you feel you have a claim covered by warranty, you must promptly notify the dealer who sold you the panel of the claim. The dealer will give advice handling the claim. If further assistance is required, write Evergreen Solar for instructions.

The customer must submit a written claim, including adequate documentation of panel purchase, serial number, and product failure. Evergreen Solar will determine in its sole judgment the adequacy of such claim. Evergreen Solar may require that product subject to a claim be returned to the factory, at the customer’s expense. If product is determined to be defective and is replaced but is not returned to Evergreen Solar, then the customer must submit adequate evidence that such product has been destroyed or recycled.

Note: This document may be provided in multiple languages. If there is a conflict among versions, the English language version dominates.

Schedule 3, Page 2

Schedule 4

Flash Test Data Sample

Panel Test Data Report for Pallet: xxx-yyyyyy

This data summarises the STC electrical test data of the listed PV panels as measured at the time of manufacture by Evergreen Solar
This test data is provided to customers for informational purposes only
The only electrical specifications valid for warranty purposes are those defined in the Installation Manual supplied with this product
Evergreen Solar provides no guarantees that the listed PV panels will deliver the exact same results when tested by any third party

Item #	Serial #	Pallet ID	Product ID	Date Tested	Isc (A)	Imp (A)	Voc (V)	Vmp (V)	Pmax (W)
1	4901200702190000214	xxx-yyyyyy	ES-180-RL-K	2/19/2007 10:53	7.9	7.1	32.2	25.3	178.3
2	4901200702190000247	xxx-yyyyyy	ES-180-RL-K	2/19/2007 11:44	7.9	7.2	32.2	25.7	184.1
3	4901200702190000244	xxx-yyyyyy	ES-180-RL-K	2/19/2007 11:40	7.7	7.1	32.3	25.8	183.1
4	4901200702190000195	xxx-yyyyyy	ES-180-RL-K	2/19/2007 12:05	7.8	7.1	32.4	25.9	185.3
5	4901200702160000375	xxx-yyyyyy	ES-180-RL-K	2/19/2007 12:15	7.8	7.2	32.2	25.6	183.8
6	4901200702190000252	xxx-yyyyyy	ES-180-RL-K	2/19/2007 12:02	8.0	7.2	32.5	26.0	185.8
7	4901200702160000376	xxx-yyyyyy	ES-180-RL-K	2/19/2007 12:14	7.8	7.1	32.3	25.8	182.4
8	4901200702190000255	xxx-yyyyyy	ES-180-RL-K	2/19/2007 12:13	7.9	7.1	32.2	25.5	181.4
9	4901200702190000258	xxx-yyyyyy	ES-180-RL-K	2/19/2007 12:19	7.9	7.1	32.4	26.0	183.9
10	4901200702190000250	xxx-yyyyyy	ES-180-RL-K	2/19/2007 12:00	7.9	7.1	32.4	26.0	184.1
11	4901200702190000194	xxx-yyyyyy	ES-180-RL-K	2/19/2007 12:06	7.9	7.2	32.4	25.8	186.1
12	4901200702190000260	xxx-yyyyyy	ES-180-RL-K	2/19/2007 12:23	7.8	7.1	32.2	25.5	181.0
13	4901200702190000261	xxx-yyyyyy	ES-180-RL-K	2/19/2007 12:24	8.0	7.2	32.5	26.0	186.1
14	4901200702190000262	xxx-yyyyyy	ES-180-RL-K	2/19/2007 12:25	8.0	7.1	32.0	25.5	181.5
15	4901200702190000254	xxx-yyyyyy	ES-180-RL-K	2/19/2007 12:12	7.9	7.1	32.3	25.3	180.2
16	4901200702190000264	xxx-yyyyyy	ES-180-RL-K	2/19/2007 12:27	7.8	7.1	32.2	25.3	181.1
17	4901200702190000249	xxx-yyyyyy	ES-180-RL-K	2/19/2007 11:47	8.1	7.1	32.3	25.8	184.0
18	4901200702190000232	xxx-yyyyyy	ES-180-RL-K	2/19/2007 11:20	8.0	6.8	32.3	26.0	178.0
19	4901200702190000263	xxx-yyyyyy	ES-180-RL-K	2/19/2007 12:36	8.0	7.1	32.5	26.1	185.8
20	4901200702190000205	xxx-yyyyyy	ES-180-RL-K	2/19/2007 11:53	8.0	7.2	32.4	25.4	183.1
21	4901200702190000236	xxx-yyyyyy	ES-180-RL-K	2/19/2007 11:24	7.9	7.1	32.0	25.4	179.5
22	4901200702190000274	xxx-yyyyyy	ES-180-RL-K	2/19/2007 12:51	7.9	7.0	32.3	26.3	183.9
23	4901200702190000277	xxx-yyyyyy	ES-180-RL-K	2/19/2007 12:55	7.8	7.1	32.2	25.4	180.6
24	4901200702190000283	xxx-yyyyyy	ES-180-RL-K	2/19/2007 13:03	8.0	7.2	32.4	25.8	184.9
25	4901200702190000267	xxx-yyyyyy	ES-180-RL-K	2/19/2007 12:34	7.9	7.1	32.1	25.8	182.9
26	4901200702190000286	xxx-yyyyyy	ES-180-RL-K	2/19/2007 13:07	8.1	7.2	32.0	25.1	179.6
27	4901200702190000285	xxx-yyyyyy	ES-180-RL-K	2/19/2007 13:05	7.7	7.1	32.0	25.7	182.9
28	4901200702190000306	xxx-yyyyyy	ES-180-RL-K	2/19/2007 13:52	8.1	7.1	32.1	25.5	181.1
29	4901200702190000305	xxx-yyyyyy	ES-180-RL-K	2/19/2007 13:46	7.9	7.2	32.3	25.8	185.3
30	4901200702190000297	xxx-yyyyyy	ES-180-RL-K	2/19/2007 13:39	7.9	7.1	32.0	25.5	181.3

Schedule 5

ES-Series Panels — Classification Criteria

Internal Code: Q QM SP 002/04
Creation Date: June 7, 2007
(revised for IBC Agreement July 2008)
Edition: 4

[****]

Schedule 5, Page 1

ES-Series Panels — Classification Criteria

Internal Code: Q QM SP 002/04
Creation Date: June 7, 2007
(revised for IBC Agreement July 2008)
Edition: 4

[****]

Schedule 5, Page 2

ADDENDUM TO MASTER SUPPLY AGREEMENT

     This Addendum (this “Addendum”) dated as of February 1, 2009 (the “Effective Date”) is attached to and incorporated into the above-referenced Master Supply Agreement (as amended and supplemented by this Addendum, the “Agreement”) dated July 14, 2008 between Evergreen Solar, Inc. (“Evergreen”) and IBC Solar AG (“Purchaser”). Capitalized terms used but not defined in this Addendum shall have the respective meanings set forth in the Agreement.

     1. SCOPE OF ADDENDUM

     This Addendum is intended by Evergreen and Purchaser to set forth the terms and conditions under which Purchaser will purchase all Products pursuant to the Agreement commencing on February 1, 2009 for resale under Purchaser’s company name and logo together with Evergreen’s name and logo (“OEM Products”). Commencing on February 1, 2009, Purchaser may only purchase and resell OEM Products.

     2. BRANDING OF OEM PRODUCTS

     (a) Evergreen Trademark Usage.

          (i) Powered by Evergreen Solar. Purchaser shall brand the OEM Products as a Purchaser product, “powered by Evergreen Solar^®,” and Purchaser shall use the “powered by Evergreen Solar” Trademark(s), in the manner set forth in this Addendum or as otherwise approved in advance by Evergreen, to identify all OEM Products and in all materials used to advertise, market or promote the OEM Products. Purchaser agrees that the words “powered by Evergreen Solar” (the “Evergreen Tagline”) shall constitute an Evergreen Trademark for purposes of Section 11(d) of the Agreement. Evergreen grants Purchaser a non-exclusive license to use “powered by Evergreen Solar^®” as required pursuant to this Addendum. Purchaser’s obligation to “brand” the OEM Products shall mean that Purchaser is responsible for selling and marketing the OEM Products with the Evergreen Tagline including, but not limited to preparing, providing and establishing advertising, promotional materials, websites and tradeshow activities using the Evergreen Tagline.

          (ii) String Ribbon. Purchaser may, but is not required to, brand the OEM Product using Evergreen Solar’s “String Ribbon™” trademark, in the manner set forth in this Addendum or as otherwise approved in advance by Evergreen, to identify all OEM Products and in all materials used to advertise, market or promote the OEM Products. Upon registration of the trademark by Evergreen, Purchase agrees to use “String Ribbon” with the “^®” designation in lieu of the “™” designation. Purchaser agrees that the words “String Ribbon” shall constitute an Evergreen Trademark for purposes of Section 11(d) of the Agreement. Evergreen grants Purchaser a non-exclusive license to use “String Ribbon™” as permitted pursuant to this Addendum.

     (b) Purchaser’s Branding Obligations. Subject to the requirement to brand the OEM Products using the Evergreen Tagline and Evergreen’s right and need to ensure that the use of any Evergreen Trademarks complies with Evergreen’s then-current trademark usage policies and guidelines and the quality standards of Evergreen, Purchaser shall determine and

shall be responsible for all aspects of the branding of the OEM Products, including all costs and expenses associated therewith including the research of and registration for all trademarks and trademarks associated with the OEM Products (other than the Evergreen Trademarks). Evergreen hereby grants Purchaser permission to reproduce, publicly display, and otherwise use the Evergreen Trademarks provided by Evergreen to Purchaser for the sole purpose of promoting the OEM Products as permitted in the Agreement. Purchaser agrees not to use Evergreen Trademarks or potentially confusing variations of Evergreen Trademarks as a part of a product name, service name, company name, Internet address or similar designation, or in any manner that suggests a relationship with Evergreen other than that which exists under this Agreement. Purchaser acknowledges that it is granted no rights with respect to any Evergreen Trademarks except as expressly set forth herein.

     (c) Evergreen’s Labeling Obligations. Notwithstanding the foregoing branding requirements set forth in Section 2(a) and (b), Evergreen is responsible for labeling of the OEM Products and the associated packaging, and the cost thereof pursuant to Section 4(b).

     (d) Evergreen Approval. Evergreen and Purchaser agree to reasonably cooperate to address concerns related to Purchaser’s use of the Evergreen Trademarks if Evergreen determines that such use does not comply with Evergreen’s then-current trademark usage policies and guidelines or the quality standards of Evergreen.

     3. WARRANTY SERVICES FOR OEM PRODUCTS

     (a) Warranty Modifications. Sections 13(a) and (b) of the Agreement shall not apply to OEM Products. In lieu thereof, the following provisions shall apply to the Agreement:

          (i) Limited Product Warranty. All OEM Products purchased by Purchaser will be warranted to Purchaser per the terms, conditions and limitations of the standard Evergreen warranty statements provided with the OEM Products, a representative copy of which is attached to the Agreement as Schedule 3 (the “Evergreen Warranty Statements”), with Purchaser having the same warranty rights as the “original consumer purchaser” thereunder. The applicable warranty period will commence on the earlier of the warranty commencement date specified on the applicable Evergreen Warranty Statement or 180 days after shipment of the OEM Product to Purchaser pursuant to Section 6 of the Agreement. Evergreen may modify the Evergreen Warranty Statements from time to time in addition to providing differing warranties for different OEM Products and markets on ninety (90) days prior written notice to Purchaser; provided, however, that if any such modification materially reduces the warranty provided as a whole set forth in Schedule 3 and such reductions are (i) not substantially consistent with those generally accepted in the industry and (ii) materially different than the warranty offered all other customers, Purchaser may, on written notice to Evergreen, if Evergreen fails to withdraw its modification of the warranty within ten (10) business days of receipt of such notice, terminate the Agreement in accordance with Section 10(b) of the Agreement. In no event will the Purchaser’s warranty on OEM Products be materially different than that offered for Products sold to all other Evergreen customers. It is understood that the warranties in this Section 3(a)(i) of this Addendum are made exclusively to Purchaser and are non-transferable.

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          (ii) [****]

          (iii) Warranty Claims. Purchaser and its service providers shall document and notify Evergreen of claims, questions or concerns Purchaser receives under Purchaser’s warranty with respect to Products sold to Purchaser hereunder. Purchaser shall obtain information from the end user as reasonably requested by Evergreen to enable the parties to determine whether the respective claim arises under the Evergreen warranty to Purchaser or arises from materials or services not provided by Evergreen.

          (iv) Additional Warranty Provisions. The additional warranty provisions set forth in Sections 13(c), (d) and (e) of the Agreement shall continue to apply.

     (b) No Warranty to End Users. Evergreen makes no representations or warranties to Purchaser’s end users (“End Users”) with regard to the OEM Products, and, except for such costs as may be payable by Evergreen to Purchaser pursuant to Sections 13(c), 13(d) and 13(e) of the Agreement, Purchaser shall be responsible at its sole cost and expense for all direct interaction with its End Users for warranty and non-warranty related field services and ongoing support for the OEM Products, including responding to and managing any OEM Product warranty claims made by End Users under Purchaser’s warranty to End Users. Purchaser shall make no representations or warranties to third parties, including End Users, on behalf of Evergreen, and Purchaser shall clearly state in its contracts or warranty statements for its End Users that any OEM Product warranty to End Users is provided solely by Purchaser. Further, Purchaser shall make no representations and warranties related to the OEM Products that are inconsistent with the Agreement (including the applicable Evergreen Warranty Statement(s)) nor shall Purchaser imply in any way, including in Purchaser’s warranty to End Users, that Purchaser is an agent for Evergreen, that Evergreen is responsible for the providing of the OEM Products (other than by use of the Evergreen Tagline as permitted in Section 2 of this Addendum) or that Evergreen is in any way liable to End Users, and Purchaser will take all necessary measures to preclude Evergreen from being made a party to any lawsuit or claim regarding the OEM Products provided to any End User.

     4. DELIVERY REQUIREMENTS; LABELING; CERTIFICATION

     (a) Installation Manual. Purchaser must prepare and deliver to each of Purchaser’s direct customers an installation manual for the OEM Products as required by applicable law. Further, in addition to Purchaser’s indemnification obligations under Section 15(b) of the Agreement, Purchaser agrees to defend at its own expense any action brought against Evergreen to the extent that it is based on a claim arising out of or relating to Purchaser’s breach of this Section 4(a).

     (b) OEM Product and Packaging Labeling. Evergreen is authorized and directed to affix to the back of each OEM Product an identification label in a form mutually agreeable to Evergreen and Purchaser that conforms to all applicable legal requirements and requirements of applicable certification agencies. All other product and packaging labeling shall be substantially similar to labeling used by Evergreen except for the substitution of appropriate product names and the Purchaser logo. The product identification label will be printed in English and German, be located on the back of the product and conform to the requirements of

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the EN50380 DIN Standard. Attached to this Addendum as Schedule 1 is a sample of the initial agreed upon product identification label, which product label may be modified by Evergreen as required by law or based on change electrical specification of the OEM Product as permitted or agreed by the parties from time to time; provided that Evergreen shall provide at least ninety (90) days prior written notice to Purchaser if possible.

     (c) TÜV Certification. Evergreen and Purchaser will cooperate to apply and obtain any certificate needed from TÜV to brand the OEM Product as a TÜV certified product. All third party costs associated with such efforts shall be borne by Evergreen.

     5. GENERAL

     Except as expressly amended by this Addendum, all terms and conditions of the Agreement shall remain unchanged and in full force and effect (e.g., except as expressly amended by this Addendum all references in the Agreement to “Products” shall include OEM Products). All references in the Agreement or this Addendum to “the Agreement” or “this Agreement” shall include the Agreement as modified and supplemented by this Addendum, and in the event of any conflicts or inconsistencies between the Agreement and this Addendum, this Addendum shall control in each instance.

[signatures on next page]

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     IN WITNESS WHEREOF, Evergreen and Purchaser have duly executed this Addendum as of the Effective Date written above.

Evergreen Solar, Inc.	IBC SOLAR AG
By:	By:
Name:	Name:
Title:	Title:
Date:	Date:

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Schedule 1

OEM Product Label Sample

EX-10.33

Exhibit 10.33

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

AMENDED AND RESTATED
SALES REPRESENTATIVE AGREEMENT

     THIS AMENDED AND RESTATED SALES REPRESENTATIVE AGREEMENT (this “Agreement”), dated and effective as of the 6th day of October 2008 (the “Effective Date”), between EverQ GmbH, a limited liability company organized and existing under the laws of Germany and having its principal place of business at OT Thalheim, Sonnenallee 14-24, 06766 Bitterfeld-Wolfen, Germany (“EverQ”), and Evergreen Solar, Inc., a Delaware corporation, having its principal place of business at 138 Bartlett Street, Marlboro, Massachusetts, 01752 USA (“Evergreen”). EverQ and Evergreen are also collectively referred to herein as “Parties” and individually as “Party.”

RECITALS

     WHEREAS, EverQ and Evergreen previously entered into that certain Sales Representative Agreement dated and effective September 29, 2006 (the “Prior Agreement”); and

     WHEREAS, pursuant to Section 21(e) (Amendments and Waivers) of the Prior Agreement, EverQ and Evergreen desire to amend and restate in its entirety the Prior Agreement as set forth in this Agreement to expressly define the rights and obligations of each Party during the transition from Evergreen serving as EverQ’s sales representative to EverQ independently managing its own sales and marketing activities.

AGREEMENT

     NOW, THEREFORE, it is mutually agreed that EverQ will manufacture and supply, and Evergreen will use commercially reasonable efforts to market and sell, as representative of EverQ, the Evergreen-Product as defined in this Agreement, pursuant to and in accordance with the following terms and conditions.

     1. DEFINITIONS AND EXHIBITS

     The following terms shall have the following respective meanings for purposes of this Agreement:

CONFIDENTIAL

          (a) “Business Day” shall mean any day on which financial institutions are generally open and available for business, and which is not otherwise a holiday, in all of the German state of Saxony-Anhalt and the United States Commonwealth of Massachusetts.

          (b) “Change of Control” means with respect to any entity, the acquisition of such entity by another entity by means of any transaction or series of related transactions (including, without limitation, any share acquisition, sale of all or substantially all of the assets, reorganization, merger or consolidation, but excluding any sale of shares for capital raising purposes) other than a transaction or series of transactions in which the holders of the voting securities of such entity outstanding immediately prior to such transaction continue to retain (either by such voting securities remaining outstanding or by such voting securities being converted into voting securities of the surviving entity), as a result of shares in such entity held by such holders prior to such transaction, more than 50% of the total voting power represented by the voting securities of such entity or such surviving entity outstanding immediately after such transaction or series of transactions

          (c) “Contracts” shall mean the supply agreements listed in Exhibit C and any Product Sales Transactions Evergreen is permitted to enter into pursuant to this Agreement for fulfillment using Evergreen-Products produced and available for shipment prior to the Sales Termination Date which additional Product Sales Transactions shall be listed on Exhibit C and deemed to be Contracts. The Contracts shall exclude each Specified Contract to the extent that each such Contract is assigned pursuant to Section 14(f) (Customer Transfers).

          (d) “Dedicated Production Capacity” shall mean the amount of production capacity needed for the fulfillment of the Contracts between January 1, 2008 and the Sales Fulfillment Termination Date in MWp as such amounts are listed in Exhibit D; provided, however, if all of EverQ’s production capacity is less than the Dedicated Production Capacity in one calendar year determined in Exhibit D, then the Dedicated Production Capacity shall mean all of EverQ’s production capacity in the respective year.

          (e) “Evergreen Design” means any proprietary visual design or proprietary configuration of the products currently manufactured by EverQ and provided by Evergreen which is formally described by prior written notification by Evergreen as “Evergreen Design”. Provided, however, that the Parties agree that each of (i) products manufactured by EverQ based on any specification, visual design or configuration requested by Evergreen, (ii) any wafer and cell technology in use by Evergreen as of the Sales Termination Date and (iii) any intellectual property licensed to EverQ, do not constitute and include “Evergreen Design.”.

          (f) “Evergreen-Product(s)” shall mean the products manufactured by EverQ to be sold by Evergreen pursuant to the Contracts.

          (g) “EverQ-Product(s) shall mean the products manufactured and sold by EverQ which are not Evergreen-Products.

          (h) “License Agreements” means the Second Amended and Restated License & Technology Transfer Agreement by and between Evergreen and EverQ, that the Parties expect to

CONFIDENTIAL

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enter into later in 2008, and the Quad Technology License Agreement by and between Evergreen and EverQ dated as of October 6, 2008.

          (i) “Orders” shall mean orders for Products issued hereunder by Evergreen.

          (j) “Product(s)” shall mean the products manufactured by EverQ. The Products currently include those products described in Exhibit A.

          (k) “Product Revenue” means the payment that Evergreen actually receives in consideration for the sale of the respective Evergreen-Product to a customer hereunder and does not include third party costs such as shipping and insurance and does not include taxes and duties.

          (l) “Sales Fulfillment Termination Date” shall mean December 31, 2011.

          (m) “Sales Termination Date” shall mean December 31, 2008.

          (n) “Specifications” shall mean the written specifications according to which the Evergreen-Products are to be manufactured pursuant to the Contracts, which specifications may only be modified as provided under Section 12 (Changes).

          (o) “Specified Contracts” shall mean the supply agreements with each of [****].

     The following Exhibits are attached to this Agreement and are incorporated herein by this reference:

Exhibit A — Products
Exhibit B — Warranty
Exhibit C — Schedule of Customer Contracts with Evergreen
Exhibit D — Schedule of Dedicated Production Capacity between 2008 and 2011
Exhibit E — [****]

     Each Party acknowledges receipt of copies of all documents referred to in the Exhibits.

     2. PRECEDENCE OF DOCUMENTS

     The precedence of agreements between Evergreen and EverQ shall be:

          (a) This Agreement, including any amendment adopted pursuant to Section 22(f) (Amendments and Waivers).

          (b) Any Order.

          (c) Any subsequent written agreement between Evergreen and EverQ that does not expressly indicate it is an amendment to this Agreement.

     3. APPOINTMENT AND AUTHORITY OF EVERGREEN.

     EverQ hereby appoints Evergreen as EverQ’s sales agent (Kommissionsagent), and

CONFIDENTIAL

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Evergreen hereby accepts such appointment. Evergreen will use commercially reasonable efforts to market and sell the Evergreen-Product and EverQ shall manufacture and deliver the Evergreen-Product ordered by Evergreen in accordance with the terms and conditions of this Agreement. Such efforts by Evergreen shall include serving as the exclusive sales representative for all Evergreen-Products currently scheduled for delivery under the Contracts as in effect on January 1, 2008 and for the sale of all Evergreen-Products manufactured by EverQ and available for shipment on or prior to the Sales Termination Date. Subject to the terms and conditions of this Agreement, Evergreen shall have the right to manage and conduct its activities in the manner it deems appropriate in Evergreen’s discretion. Subject to its obligations to fulfill the requirements of the Contracts and the Product allocation requirements pursuant to Section 6(e) (Sourcing), Evergreen may generate, accept and manage orders for any Evergreen factory capacity or products manufactured by parties other than EverQ without limitation or restriction on any terms or conditions of such orders, including, without limitation, customer, country or price.

     4. PRODUCTION CAPACITY FORECASTS.

          (a) EverQ Long Term Forecasts. Upon the Effective Date and at [****] prior to the Sales Fulfillment Termination Date, EverQ shall provide Evergreen a written non-binding capacity forecast (“EverQ Long Term Forecast”), indicating whether EverQ’s capacity is sufficient to supply the Evergreen-Products as required pursuant to the Contracts in each of the [****] from the date such forecast is given through the Sales Fulfillment Termination Date. EverQ shall notify Evergreen promptly upon becoming aware of circumstances that would limit EverQ’s ability to supply adequate quantities of Evergreen-Product to satisfy the requirements under the Contracts.

          (b) EverQ Rolling Forecast. Each [****] during the term of this Agreement EverQ shall provide Evergreen a written rolling capacity forecast ( “EverQ Rolling Forecast”), indicating whether EverQ can supply Evergreen in each of the next [****] with the volumes specified in the Evergreen Forecast, as defined under Section 6(a).

     5. PRODUCT SALES TRANSACTIONS.

          (a) EverQ Terms. With respect to Evergreen-Products that may be sold by Evergreen hereunder, EverQ shall, in its sole discretion[****]. EverQ will determine, in its sole discretion, adjustments to the [****] generally or with respect to a specific Product Sales Transaction where such adjustment [****]. EverQ shall promptly notify Evergreen of the [****] or any adjustments to the [****]. EverQ will further determine, in its sole discretion, which contracts and contract terms that will require formal consent of the EverQ Supervisory Board, and EverQ shall notify Evergreen thereof. However, if Evergreen is unable to provide such contracts, approval of [****] shall suffice.

     [****]

          (b) Product Sales Transactions. Evergreen shall have the right to negotiate and enter into agreements and sales transactions, including sales transactions for the sale of all Products manufactured by EverQ and available for shipment on or prior to the Sales Termination

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Date that are not needed to fulfill Orders pursuant to the Contracts, (collectively “Product Sales Transactions”) directly with customers. Evergreen shall have the right to negotiate the terms applicable to the respective Product Sales Transaction (“Negotiated Terms”) provided that such terms are within the [****]. EverQ shall provide the Products hereunder in accordance with the Negotiated Terms provided that Negotiated Terms are within the Term Ranges at the time the Product Sales Transactions are entered or, if not within such range, EverQ approves the Negotiated Terms. EverQ may approve the Negotiated Terms by approving the specific Negotiated Terms or [****] and after such approval, the Negotiated Terms are deemed within the [****] for the respective Product Sales Transactions. Provided that Product Sales Transactions are within the amounts of the EverQ Long Term Forecast at the time the Product Sales Transactions are entered, Evergreen shall have the right to place Orders for Products in such Product Sales Transactions, and EverQ shall manufacture, sell and deliver the Products in accordance with such Orders. To the extent that the EverQ Rolling Forecast indicates EverQ has greater capacity, or EverQ otherwise has more capacity available than indicated by the EverQ Long Term Forecast, EverQ shall make such capacity available for the Product Sales Transactions subject to Section6(c) (Limited Exclusivity) and Section6(d) (Excess Inventory). Product Sales Transactions [****] are deemed to constitute Product Sales Transactions of which the Negotiated Terms are approved.

          (c) Information and Accounting. Except to extent prohibited by law, Evergreen shall inform EverQ without delay of any Product Sales Transactions entered and render account of such Product Sales Transaction. Section 384 para.3 of the German Commercial Code (Handelsgesetzbuch) shall not apply.

          (d) Administration by Evergreen. Unless otherwise requested by Evergreen, EverQ will not be a party to the Product Sales Transactions. EverQ shall not contact the customers except as necessary to exercise its rights under this Agreement, particularly under Section 8(b) (Payment to EverQ) and Section 11(c) (Warranty Procedure). [****] Evergreen shall have the right to be the sole interface with customers and to handle administration of order fulfillment, invoicing, collections, warranty, service and related activities.

          (e) End of Sales Period. Notwithstanding the foregoing, Evergreen may only negotiate and enter into Product Sales Transactions for Evergreen-Products that will be manufactured and available for shipment on or prior to the Sales Termination Date. The Parties agree that EverQ is not required to consign any Products available for shipment after the Sales Termination Date to Evergreen.

     6. EVERGREEN FORECASTS AND ORDERS

          (a) Evergreen Forecasts. Each [****] during the term of this Agreement, within [****] of receiving the EverQ Rolling Forecast, Evergreen shall provide EverQ a non-binding written rolling forecast (“Evergreen Forecast”), indicating Evergreen’s good faith estimate of the total quantity to be ordered by Evergreen from EverQ under this Agreement in each of the next [****] and estimated allocations of Evergreen-Product type requested by the customers pursuant to the Contracts to the extent such allocations have been requested pursuant to the Contracts, including periods already covered by Evergreen’s outstanding Orders. The quantities specified for the first [****] of each Evergreen Forecast shall constitute a binding shipment plan. EverQ

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shall procure materials and manufacture Products sufficient to meet the Evergreen Forecasts. EverQ is not required to limit its production to the level of the Evergreen Forecasts, provided that EverQ shall be solely responsible for the sale and management of the delivery of all Products which Evergreen is not required to sell and manage the delivery of pursuant to this Agreement. EverQ agrees to advise Evergreen without undue delay in the event that EverQ anticipates that it will be unable to achieve the volumes and schedules set forth in the Evergreen Forecast.

          (b) Orders. EverQ shall sell and deliver Evergreen-Products in accordance with the Product quantity, part number(s), specifications, destination and delivery dates specified in Evergreen’s Orders for Evergreen-Product to be shipped pursuant to the Contracts. Orders may only be placed for the Products to be delivered pursuant to the Contracts and consistent with the Evergreen Forecast. Orders may be made in the form of weekly shipping forecasts and daily delivery notes which are provided by Evergreen to the EverQ warehouse.

          (c) Limited Exclusivity; Priority of Orders pursuant to the Contracts. Evergreen shall have the exclusive right to sell Evergreen-Products in the amount of EverQ’s total production capacity for Product produced and available for shipment on or prior to the Sales Termination Date. For Product manufactured and available for sale after the Sales Termination Date, EverQ shall have the sole right to sell the Products itself / or through other sales / commission agents without limitation or restriction on customer, country, price terms etc., provided that EverQ first supplies Evergreen with sufficient Evergreen-Products to fulfill the Contracts. EverQ-Products shall not bear Evergreen Marks or be of an Evergreen Design, except as permitted or required by another written agreement between the Parties, including without limitation as may be permitted or required in either or both of the License Agreements.

          (d) Excess Inventory. EverQ shall also have at any time the right to itself sell inventory to the extent accumulated, provided that EverQ satisfies its obligations to Evergreen with respect to the Contracts. Sales according to this clause (d) (Excess Inventory) shall not bear Evergreen Marks to the extent they can be reasonably relabeled without damage to product (except as permitted or required by another written agreement between the Parties).

          (e) Sourcing. To satisfy the requirements for Products pursuant to the Contracts, Evergreen shall first use Evergreen-Products manufactured by EverQ. If the Dedicated Production Capacity is not adequate to satisfy all of the requirements for Evergreen-Products pursuant to the Contracts, Evergreen may use products from another source as determined by Evergreen in its sole discretion subject to the requirement that, as long as Evergreen is required to use any product manufactured by a party other than EverQ to fulfill any portion of the Contracts, in allocating Evergreen product and Product to fulfill the Contracts, Evergreen agrees to treat the Product from EverQ no less favorably than Evergreen’s internal and other external sources of supply, taking into account the Dedicated Production Capacity and production volume from internal and other sources, specifications of Products manufactured by EverQ and other sources versus specifications of Products demanded by Evergreen’s customers and manufacturing and shipping locations. If the amount of Evergreen-Product available for shipment in one calendar year for fulfillment of the Contracts is lower than the Dedicated Production Capacity in such year, without limiting the remedies that may otherwise be available to it, Evergreen may require that EverQ allocate production capacity in the following calendar year to cover the shortfall in Evergreen-Product for the year in which such shortfall occurred.

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     7. TERM OF AGREEMENT

     This Agreement shall be effective on the Effective Date and shall expire on the Sales Fulfillment Termination Date, except as set forth in Section 15(c) (Survival). Upon termination of the Agreement, EverQ shall no longer have right to make or sell Products with any (i) Evergreen Marks and any (ii) Evergreen Design pursuant to this Agreement. Any such rights to manufacture and sell Products using any Evergreen Design or other Evergreen intellectual property, and any related rights, shall be governed by the License Agreements.

     8. PRICING AND PAYMENT

          (a) Pricing. Pricing for Product Sales Transactions will be determined in accordance with Section 5(a) (EverQ Terms).

          (b) Payment to EverQ.

               (i) Subject to Section 8(b)(ii), Evergreen shall remit to EverQ the Product Revenue, less the Evergreen Fee. Evergreen shall remit such amount within [****] days of Evergreen’s receipt of the Product Revenue from the customer. Evergreen shall have no liability to EverQ for delays or defaults in payment for Product, or product default or termination, by customers. Evergreen shall use commercially reasonable efforts to collect the Product Revenue. In the event that Evergreen is unable to collect on account for Product Revenue within [****] of when due, then on EverQ’s request as EverQ’ s sole remedy, Evergreen will assign the account to EverQ, which may collect on the account, retain the funds and remit the Evergreen Fee to Evergreen if the funds are collected. In the event that Evergreen is not able to collect on account for Product Revenue within [****] of when due, then Evergreen may satisfy its obligation to use commercially reasonable efforts to collect the Product Revenue by assigning the account to a collection agency for a standard collection fee. Unless otherwise agreed, payment shall be in the currency Evergreen receives from its customers for Product (which currency shall be specified to EverQ at the time of its sale upon EverQ’s request).

               (ii) To the extent permitted under the Contracts, Evergreen assigns all mature and future claims to payments due and payable pursuant to the Contracts (“Claims”), subject to Evergreen’s right to receive the Evergreen Fees. Evergreen agrees to make reasonable efforts to obtain of each customer under the Contracts (“Customers”) consent to the foregoing assignment. Evergreen’s right to collect the Product Revenue shall terminate and be of no further force or effect if an Event of Default (as defined below) occurs. EverQ shall have the right to withdraw that authority to collect the payments that are the subject of the Claims following an Event of Default. In the event that Evergreen’s right to collect payments from its customers under the Contracts and EverQ collects any such payments, EverQ shall remit to Evergreen the Evergreen Fee within [****] of EverQ’s receipt of the Product Revenue from the customer. An “Event of Default” shall occur if:

                    (A) Evergreen shall default in its obligation to remit the payment of any part of the Product Revenue for more than [****] after Evergreen’s receipt of the Product Revenue from the customer;

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                    (B) Evergreen shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts as they become due, or shall file a voluntary petition for bankruptcy, or shall file any petition or answer seeking for itself any reorganization, arrangement, composition, readjustment, dissolution or similar relief under any present or future statute, law or regulation, or shall file any answer admitting the material allegations of a petition filed against Evergreen in any such proceeding, or shall seek or consent to or acquiesce in the appointment of any trustee, receiver or liquidator of Evergreen, or of all or any substantial part of the properties of Evergreen, or Evergreen or its respective directors or majority stockholders shall take any action looking to the dissolution or liquidation of Evergreen; or

                    (C) Within [****] after the commencement of any proceeding against Evergreen seeking any bankruptcy reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, such proceeding shall not have been dismissed, or within [****] after the appointment without the consent or acquiescence of Evergreen of any trustee, receiver or liquidator of Evergreen or of all or any substantial part of the properties of Evergreen, such appointment shall not have been vacated.

          (c) Evergreen Fee. In consideration for its activities hereunder, Evergreen shall receive a fee (“Evergreen Fee”). The Evergreen Fee shall consist of the sum of a Percentage Fee times the received Evergreen-Product Revenue. The “Percentage Fee” shall be the applicable Base Rate specified below. For all shipments through the Sales Termination Date, the “Base Rate” shall be set at [****] of Evergreen-Product Revenue. For all shipments after the Sales Termination Date until the Sales Fulfillment Termination Date, the “Base Rate” shall be set at [****] of Evergreen-Product Revenue. No fees will be charged for shipments made after the Sales Fulfillment Termination Date unless such shipments are made to fulfill Evergreen-Product shipment obligation under the Contracts that would have been fulfilled to the Sales Fulfillment Termination Date but for delay caused by EverQ. All sales and marketing costs and expenses of Evergreen are compensated by the Evergreen Fee.

          (d) Assignment of Interests in the Contracts. Evergreen hereby assigns to EverQ, by way of security, each future Evergreen claim less the Evergreen Fee vis-à-vis its customers for Products Revenue under the Contracts in order to secure each such respective claim of EverQ vis-à-vis Evergreen under this Agreement. Evergreen is entitled to collect the Product Revenue from the customer according to Section 8(b) (Payment to EverQ), and particularly Evergreen is entitled to assign the account to a collection agency for a standard collection fee. EverQ is allowed to inform the customers and collect the payment itself if EverQ elects to terminate this Agreement pursuant to Section 15(b)(i) (Termination Grounds for Termination by EverQ).

          (e) Credit. Undisputed amounts owed to Evergreen due to rejections of Product, accepted warranty claims, discrepancies on paid invoices and other undisputed amounts payable under this Agreement will be, at Evergreen’s option, fully credited against future invoices payable to EverQ, or paid by EverQ within [****] from EverQ’s receipt of a debit memo or other written request for payment from Evergreen.

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          (f) Set-off. Evergreen retains the right to set-off undisputed amounts owed from EverQ against amounts owed to EverQ.

          (g) Records and Audits. Evergreen shall maintain complete and accurate records regarding the Product Sales Transactions in accordance with generally recognized commercial accounting practices, and Evergreen shall keep such records available for at least [****] years or longer, if required by German tax law and EverQ has notified Evergreen of such requirement, after end of the period to which they apply. Evergreen shall allow EverQ, through an independent certified public accountant mutually acceptable to Evergreen and EverQ, during office hours and at reasonable intervals, no more than [****] to audit records solely for the purpose of ascertaining the correctness of Evergreen’s payments and for reviewing Evergreen Fee hereunder. The auditor shall be subject to an obligation of confidentiality, and Evergreen may require the auditor to execute a confidentiality agreement to that effect. The auditor shall report only whether a discrepancy was found, and if so, the amount of under or overpayment. If a deficiency of [****] or more exists for the period audited, Evergreen shall pay, in addition to such deficiency, the reasonable costs of such audit.

     9. DELIVERY AND SHIPPING TERMS

     EverQ shall deliver on the dates and to the locations in accordance with the Contracts as the shipments pursuant to the Contracts are set forth in the most recent Evergreen Forecast. EverQ shall use commercially reasonable efforts to satisfy the mix of Evergreen-Product type requested by the customers pursuant to the Contracts and disclosed in the Evergreen Forecast, but in no event will a Evergreen customer placed at a disadvantage relative to other EverQ customers with regard to the mix of Evergreen-Product type delivered by EverQ, unless agreed to by such customer. EverQ shall have the right to alter the mix of Evergreen-Product type for all Evergreen customers if it is not able to satisfy the mix of Evergreen-Product type requested by the customers pursuant to the Contracts for reasons in connection with the manufacturing of Products (e.g., limitations of the production); provided that if the mix of Product for Evergreen customers differs from the applicable Orders, it shall be consistent with the mix of all Product manufactured by and generally available from EverQ unless otherwise consented to by Evergreen after consultation with the applicable customer. All shipping terms including responsibility for cost of shipping, taxes, insurance, passage of title and risk of loss shall be in accordance with the terms of the Contracts and all other expenses connected with product delivery payable by Evergreen pursuant to the Contracts shall be paid by EverQ. All Evergreen-Products shall be prepared, packed, marked and shipped in accordance with the terms of the Contracts.

     10. FACILITIES, RECORDS, AUDITS, CONFIDENTIALITY AND QUALITY REQUIREMENTS

          (a) Facilities. EverQ shall manufacture and supply the Evergreen-Products in accordance with the Specifications of this Agreement using adequate, qualified manufacturing facilities, with all necessary labor and equipment. Such facilities shall be subject to Evergreen’s inspection and/or audits from time to time. Unless otherwise agreed, EverQ is solely responsible to provide all parts, labor, materials and other items necessary to perform its obligations hereunder.

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          (b) Records and Audits. At Evergreen’s request, upon reasonable prior notice, EverQ shall permit Evergreen and its representatives to periodically inspect and audit EverQ’s books, records, and manufacturing facilities pertaining to EverQ’s manufacturing of the EverQ-Products. In accordance with Evergreen’s reasonable request, EverQ shall, at its reasonable discretion, [****]. EverQ shall maintain accurate and complete records regarding EverQ’s manufacturing and supply of the Evergreen-Products. These records shall be held in no event less than [****] years kept following the end of the calendar quarter to which they pertain.

          (c) Quality Requirements.

               (i) EverQ agrees to provide outgoing inspection, quality and reliability data as reasonably specified from time to time by Evergreen for the Evergreen-Products.

               (ii) EverQ shall provide Evergreen with Flash Test Data for the Evergreen-Products in each shipment to enable Evergreen to satisfy its obligation to provide Flash Test Data pursuant to the Contracts. EverQ shall provide Evergreen with Flash Test Data in an electronic format within reasonable time after Evergreen-Products have been shipped. EverQ will make reasonable efforts to ensure this data is in a format suitable for loading into Evergreen’s database. All Evergreen-Products provided to Evergreen by EverQ shall be within panel power tolerance specifications for the Products.

               (iii) Evergreen-Product electrical characteristics shall be based on the results of a production line test performed at the MC connectors or equivalent in accordance with IEC 904-1 at Standard Test Conditions (1000 W/m2 with IEC904-3 reference solar spectral irradiance distribution, AM1.5 and 25C).

               (iv) Evergreen-Products shall be certified UL 1703, IEC 61730, or future mandated equivalent standards as required to meet local national or regulatory requirements.

          (d) Stopping Shipments. Evergreen may request EverQ to stop shipments for significant quality deficiencies. [****] If Evergreen so requests, EverQ’s obligations to meet delivery commitments shall thereafter be suspended until such time as Evergreen thereafter requests EverQ to recommence shipment of Evergreen-Products. Evergreen and EverQ shall work together to allow EverQ to resume production and shipment as promptly as practicable. All requests pursuant to this Section shall be in writing.

     11. WARRANTY

          (a) Title Warranty. EverQ warrants that title to the Products sold by Evergreen shall be free and clear of all liens, mortgages, encumbrances, security interests or other claims or rights (“Third Party Rights”). However, Third Party Rights do not include (i) any Intellectual Property Rights or Technology provided by Evergreen to EverQ or based on the License & Technology Transfer Agreement between Evergreen to EverQ, as may be amended from time to time and (ii) any rights of third parties regarding the aforementioned Intellectual Property Rights or Technology provided by Evergreen.

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          (b) General Warranty.

               (i) Warranty Coverage. EverQ warrants (1) all Products sold by Evergreen and delivered prior to the Effective Date (including without limitation any Products of any type specified on Exhibit E) and (2) all Products sold by Evergreen and delivered on or after the Effective Date that are manufactured based on complete manufacturing specifications and installation instructions requested by Evergreen that have been accepted by EverQ (as such acceptance is provided for in accordance with Section 11(b)(ii)), pursuant to the warranty attached hereto in Exhibit B. EverQ also warrants all such Products sold by Evergreen with respect to any specific warranty terms that [****]. EverQ shall not be liable for defects of any Products sold by Evergreen using manufacturing specifications or installation instructions (e.g., any material, equipment and/or process parameters, particularly with regard to power measurements) requested by Evergreen that have not been accepted by EverQ.

               (ii) Product Acceptance. For purpose of determining which Product manufacturing specifications and corresponding installation instructions have been accepted, EverQ agrees and acknowledges that any Product manufacturing specifications together with their applicable installation instructions sold by Evergreen and delivered prior to the Effective Date, except for those Products listed on Exhibit E, represent Products with complete manufacturing specifications and installation instructions that have been accepted by EverQ. In addition, the implementation of new manufacturing specifications in an EverQ factory and the sale of Product manufactured to such specifications after the Effective Date with certain installation instructions shall constitute acceptance of the applicable manufacturing specifications and installation instructions by EverQ. EverQ may reasonably decide to refuse to accept new Product manufacturing specifications and corresponding installation instructions that are proposed by Evergreen after the Effective Date. If applicable law or the applicable certification requirements for any Product are modified such that an accepted manufacturing specifications and installation instructions will no longer comply with legal or certification requirements, EverQ and Evergreen shall use commercial reasonable efforts to (i) modify the applicable manufacturing specifications and installation instructions, and (ii) seek the consent of customers under the Contracts to modifications to the Contracts to permit delivery of Product based on such non-compliant manufacturing specifications and installation instructions.

          (c) Warranty Procedures. If (i) EverQ is notified of any failure of any Product sold by Evergreen to conform to the warranties required pursuant to Section 11(b) above and provided a description of such breach; and (ii) such Products are accepted to be defective or non-conforming by Evergreen, EverQ shall repair, replace or refund the purchase price of such Product. EverQ shall expedite any such Order for replacement Product at Evergreen’s request and, if requested by Evergreen, [****]. To the extent that the warranty claims amount to the lesser of (i) a single claim of [****] euro (€[****]) or (ii) [****] percent ([****] %) of Evergreen’s sales of Products from EverQ cumulatively in the prior [****] months, then Evergreen shall be free to assess in its reasonable judgment, [****], whether the warranty is breached and whether the remedy shall be repair, replacement or refund. Evergreen will provide to EverQ monthly reports outlining any recurring warranty cases and, upon request of EverQ, also an evaluation report. If Product is replaced, EverQ shall have the right to receive and examine the faulty Product sold by Evergreen. To the extent that the claims are greater than such threshold, EverQ and Evergreen shall jointly determine the remedy and [****]. [****] EverQ

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will notify Evergreen if the warranty claim is accepted. EverQ will accommodate variations of the above procedure to the extent required by the respective Product Sales Transaction [****].

          (d) Warranty Claim Disputes. If the Parties have a bona fide disagreement as to the validity of a warranty claim for the Products sold pursuant to the Contracts and the Parties are unable to resolve this difference within [****] Business Days following written notice from one Party to the other regarding such disagreement, Evergreen shall be permitted to handle the claim as it reasonably deems appropriate in order to preserve customer satisfaction. The Parties will equally share the costs of this warranty expense pending final arbitration of the claim by a third party pursuant to Section 22(a) (Governing Law and Dispute Resolution), if the Parties cannot otherwise resolve the dispute.

          (e) Repaired or Replaced Products. EverQ shall return Products sold by Evergreen repaired or replaced under this warranty [****]. EverQ shall organize transport and bear the transportation charges, if any, for shipment to EverQ of repaired, replaced, or returned-for-credit Product.

          (f) Exclusion. Apart from the rights mentioned in Section 11(a) (Title Warranty) through Section 11(e) (Repaired or Replaced Products), Evergreen is not entitled to any further warranty claims.

     12. CHANGES

          (a) The term “Product Changes” shall mean those mechanical, electrical or Specification changes, changes in suppliers or subcontractors, made to or with respect to the Evergreen-Products or the manufacture process which, if made, could affect the schedule, performance, quality, reliability, availability, serviceability, appearance, dimensions, tolerances, safety or costs. EverQ is, [****], allowed to make Product Changes that do not affect customer interests pursuant to the Contracts. Product changes which may affect the performance, quality, reliability, serviceability, appearance, dimensions and the tolerances, safety of Evergreen-Products and affecting customer interests pursuant to the Contracts only become effective if approved by Evergreen, nevertheless such approval shall only be denied on a reasonable basis. Evergreen shall use its commercially reasonable efforts to provide for respective adjustment clauses [****].

          (b) Should Q-Cells (as defined below) and/or REC (as defined below) develop a proprietary product design that provides cost and/or product advantages the Parties will negotiate in good faith to enable said design to be manufactured and sold under the terms of this Agreement.

     13. TRADEMARKS

     EverQ shall apply Evergreen’s trademark(s) (“Evergreen Marks”) to the Evergreen-Products and otherwise use Evergreen Marks only as reasonably instructed from time to time. Evergreen grants to EverQ a non-exclusive, non-transferable license to use the Evergreen Marks, solely on the Evergreen-Products in accordance with Evergreen’s instructions, and only for so long as EverQ complies with Evergreen’s then-current trademark usage guidelines. Without limitation, EverQ shall not take any action that would detract from the goodwill of Evergreen

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associated with the Evergreen Marks. If EverQ is using the Evergreen Marks improperly, then upon notice from Evergreen, EverQ must remedy the improper use [****]. EverQ shall make all reasonable efforts to manufacture, or have manufactured, any product upon which the Evergreen Marks are applied to standards that are at least as high as those for similar products of EverQ. EverQ acknowledges that Evergreen is the owner of the Evergreen Marks, and shall do nothing inconsistent with Evergreen’s ownership of the Evergreen Marks. All use of the Evergreen Marks by EverQ will inure to the benefit of Evergreen, and nothing in this Agreement grants to EverQ any right, title or interest in the Evergreen Marks other than the right to use the Evergreen Marks in accordance with this Agreement. EverQ shall not sell any Product bearing the Evergreen Marks except in accordance with this Agreement or as permitted or required by another written agreement between the Parties. In the event that the Agreement is terminated or has expired and EverQ has excess inventory of Products bearing the Evergreen Marks that is not to be sold by Evergreen, then, if the Products cannot be reasonably relabeled and the sale of the Products with the Evergreen Marks is not otherwise permitted or required pursuant to another agreement, Evergreen agrees to EverQ’s sale of such Products bearing the Evergreen Marks.

     14. TRANSITIONAL OBLIGATIONS

          (a) EverQ Sales and Marketing Staff. EverQ shall use its best efforts to hire as soon as possible an appropriately capable professional to lead EverQ’s sales and marketing activities. Evergreen shall reasonably cooperate or assume the lead (if requested) in identifying candidates for EverQ’s sales and marketing department. Evergreen shall reasonably cooperate in training EverQ’s sales and marketing team on order management tools needed to perform the sales and marketing function. Evergreen shall be reimbursed for the incurred costs directly associated with recruiting, hiring and training the EverQ sales and marketing staff pursuant to this Section 14(a).

          (b) Sales and Marketing Planning. EverQ will develop a marketing, sales and distribution plan to support the sale of EverQ-Products in excess of the Dedicated Production Capacity to be shipped after the Sales Termination Date. Commencing upon the hiring of EverQ’s senior sales and marketing professional, but in no event later than the first applicable trade show in 2009, EverQ shall secure trade show space independent of the space secured by Evergreen for any trade show EverQ desires to attend.

          (c) EverQ Name and Trademarks. EverQ shall determine its new company name and trademarks as soon as reasonably possible, provided that such new name shall be formally adopted no later than December 31, 2008. EverQ’s new name shall not include any variation of the words “ever”, “green”, “string”, “ribbon”, “REC”, “Renewable Energy”, “Q-Cells” or any other registered or common law trademarks of Evergreen, Renewable Energy Corporation ASA (“REC”) or Q-Cells AG (“Q-Cells”).

          (d) Product Certifications. EverQ will use its commercially reasonable efforts, and Evergreen will cooperate on a commercially reasonable basis as well as provide product documentation as requested by the certifying body to assist EverQ’s in its efforts, to obtain the necessary certifications of the Products from TÜV and any other applicable certifying entity, body or state agency so that EverQ can sell the EverQ-Products with its new name and logo commencing on January 1, 2009.

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          (e) Commencement of Sales. EverQ hereby assumes responsibility and shall make best efforts to manage the sale of all EverQ-Products to be manufactured by EverQ and available for shipment after the Sales Termination Date other than the Evergreen-Products. If EverQ is unable despite its best efforts to establish a sales and marketing team and to start sales of EverQ-Product for shipment in 2009 within a reasonable timeframe, EverQ shall inform Evergreen, Q-Cells and REC and discuss with all three parties alternative approaches to selling the EverQ-Products.

          (f) Customer Transitioning. [****] Evergreen will not receive the Evergreen Fee for any sales of Products made pursuant to any Specified Contract that is properly assigned pursuant to this Section 14(f). If assigned, Products sold by EverQ pursuant to any Specified Contract shall not bear Evergreen Marks or be of an Evergreen Design, except as permitted or required by another written agreement between the Parties, including without limitation as may be permitted or required in either or both of the License Agreements. Moreover, if assigned, the Dedicated Production Capacity shall be reduced in the amount of production capacity in MWp needed for the fulfillment of the respective Specified Contract from the next quarter following the date of assignment.

     15. TERMINATION

          (a) Termination Grounds for Termination by Evergreen. Evergreen may terminate this Agreement at any time by notice in the event EverQ:

               (i) Fails to comply with any material provision of this Agreement and in the case of a breach which is capable of remedy, fails to remedy such breach within [****] days of notification of said breach,

               (ii) Becomes insolvent, becomes subject to opened insolvency proceedings or a petition to open such proceedings is dismissed due to insufficient assets or a receiver or similar officer is appointed to take charge of all or a part of EverQ’s assets and such condition in this Section 15(a)(ii) is not cured within [****] days, or

               (iii) Assigns, or attempts to assign, or subcontracts or attempts to subcontract, any or all of its rights or obligations under this Agreement or any Orders issued hereunder to a third party without Evergreen’s prior approval.

          (b) Termination Grounds for Termination by EverQ. EverQ may terminate this Agreement at any time by notice in the event Evergreen:

               (i) Becomes insolvent, files a petition in bankruptcy, “Chapter” 11 or makes an assignment for the benefit of creditors, or a receiver or similar officer is appointed to take charge of all or a part of Evergreen’s assets and such condition in this Section 15(b)(i) is not cured within [****] days.

               (ii) Fails to comply with any material provision of this Agreement and in the case of a breach which is capable of remedy, fails to remedy such breach within [****] days of written notification of said breach.

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          (c) Survival. The following sections shall survive any expiration or termination of this Agreement and remain in effect: Sections 11 (Warranty), 13 (Trademarks), 15 (Termination), 16 (Limitation of Liability), 17 (Notices), 19 (Indemnity), 21 (Confidential Information), and 22 (Miscellaneous). EverQ’s and Evergreen’s obligations with respect to existing Product Sales Transactions shall also survive any expiration or termination of this Agreement.

     16. LIMITATION OF LIABILITY

          (a) EXCEPT WITH RESPECT TO DAMAGES RESULTING FROM BREACHES OF THE EXPRESS PROVISIONS OF THIS AGREEMENT, THE PARTIES ARE ONLY LIABLE FOR DAMAGES CAUSED BY INTENT OR GROSS NEGLIGENCE. LIABILITY FOR PERSONAL INJURY OR PROPERTY DAMAGES CAUSED BY GROSS NEGLIGENCE IS LIMITED TO DIRECT DAMAGES OF THE PROPERTY OF THE OTHER PARTY AND PERSONAL INJURIES; WHICH ARE CAUSED BY ONE OF THE PARTIES IN RELATION TO THIS AGREEMENT.

          EXCEPT FOR (i) EVERQ’S FAILURE TO SUPPLY EVERGREEN-PRODUCTS PURSUANT TO THIS AGREEMENT (EVERQ’S LIABILITY FOR WHICH SHALL BE LIMITED TO A VALUE EQUAL TO THE TOTAL VALUE OF THE EVERGREEN-PRODUCT TO BE SUPPLIED PURSUANT TO THE CONTRACTS [****]), PROVIDED THAT SUCH LIMITATION ON LIABILITY FOR EVERQ’S FAILURE TO SUPPLY PRODUCTS HEREUNDER SHALL NOT APPLY IF SUCH FAILURE RESULTS FROM EVERQ’S GROSS NEGLIGENCE OR INTENTIONAL BREACH OF THIS AGREEMENT, AND (ii) EVERQ’S LIABILITY PURSUANT TO SECTION 11, THE LIABILITY OF EACH PARTY HEREUNDER SHALL BE LIMITED TO THE AMOUNT OF PRODUCT REVENUE (AS DEFINED IN SECTION 1(k)) THAT EVERGREEN RECEIVES FOR THE RESPECTIVE EVERGREEN-PRODUCT SALE OR SALES OF THE RESPECTIVE EVERGREEN-PRODUCT ON WHICH THE CLAIM IS BASED.

          (b) EXCEPT FOR SUCH DAMAGES THAT EVERQ MAY BE REQUIRED TO PAY PURSUANT TO SECTION 11, THE PARTIES ARE NOT LIABLE FOR ANY OTHER DAMAGES, I.E., FINANCIAL LOSSES, BE IT DIRECT OR INDIRECT DAMAGES, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHICH ARE CAUSED BY A PARTY IN RELATION TO THIS AGREEMENT, INCLUDING WITHOUT BEING LIMITED HERETO LOSS OF PRODUCTION AND LOSS OF PROFITS, LOSS OF TURNOVER; LOSS OF USE OR CLAIMS BY THIRD PARTIES.

          (c) THE LIMITATIONS OF THIS SECTION 16 (LIMITATION OF LIABILITY) SHALL NOT APPLY TO SECTION 19 (INDEMNITY).

     17. NOTICES

     All notices, requests, demands, waivers and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered personally, (b) sent by next-day or overnight mail or delivery or (c) sent by facsimile, as follows:

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     If to Evergreen:

Evergreen Solar, Inc.
138 Bartlett Street
Marlboro, MA 01752
USA

ATTN:
Richard M. Feldt
J. Terry Bailey
Christian M. Ehrbar

     If to EverQ:

EverQ GmbH
OT Thalheim
Sonnenallee 14-24
06766 Bitterfeld-Wolfen
Germany

ATTN:
Ted Scheidegger
Christian Langen
Katja Raschke

     18. COMPLIANCE WITH LAWS

          (a) Evergreen agrees that all work performed under this Agreement shall comply with all applicable laws and regulations in effect in the territories specified for the resale of the Products pursuant to the Contracts. Evergreen shall indemnify and hold EverQ harmless from and against any claims, costs, or damages resulting from or arising out of Evergreen’s failure to comply with the requirements of this Section in the approved territories for sale.

          (b) EverQ agrees that all Products supplied and work performed under this Agreement shall comply with all applicable laws and regulations in effect in the place of manufacture and the territories specified for the resale of the Products pursuant to the Contracts. Upon request, EverQ agrees to certify compliance with the applicable laws and regulations related to the certifications applicable to the Products. EverQ’s failure to comply with any of the requirements of this Section shall constitute a material breach of this Agreement.

          Upon request, EverQ agrees to provide Evergreen with information and certifications required to demonstrate compliance with applicable laws and regulations in effect oft the date of shipment for Evergreen-Product in the place of manufacture supplied pursuant to the Contracts under this Agreement. EverQ shall indemnify and hold Evergreen harmless from and against any claims, costs, or damages resulting from or arising out of Evergreen’s reliance on

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such information and/or certifications.

     19. INDEMNITY

          (a) EverQ shall, at its own expense, indemnify and hold Evergreen, Evergreen’s respective officers, directors, agents and employees (collectively, “Indemnified Parties”) harmless from and against any liability, award, expense or loss (including attorneys’ fees) arising from any (a) actual or alleged infringement of any patent, trademark, trade secret, copyright or other intellectual property related to the Evergreen-Products other than with respect to infringement directly caused by specifications or any rights provided by Evergreen, where the infringement would not occur without use of such specifications or rights, or (b) breach of this Agreement or its representations or warranties hereunder by EverQ, (any claim or action based on (a) and (b), a “Claim”) and shall defend at its own expense, including attorneys fees, any suit brought against Indemnified Parties alleging a Claim.

          (b) The one Party shall (i) give the other Party prompt notice in writing of any Claim and, if the other Party provides evidence reasonably satisfactory to the one Party of the other Party’s financial ability to defend the matter vigorously and pay any reasonably foreseeable damages; (ii) permit the other Party , through counsel of the other Party ‘s choice, that does not have a conflict with the one Party , to answer and defend such Claim (but any Indemnified Party may be represented by counsel and participate in the defense at its own expense); and (ii) give the other Party all needed information, assistance, and authority, at the other Party ‘s expense, to enable the other Party to defend such Claim. The other Party shall not be liable for any settlement of a Claim effected without its written consent (which consent shall not be unreasonably withheld or delayed), nor shall the other Party settle any Claim without the written consent of the one Party (which consent shall not be unreasonably withheld or delayed). The other Party shall not consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to the applicable Indemnified Parties a release from all liability with respect to the Claim.

     20. GRATUITIES

     Each Party represents that it has not offered nor given and will not offer nor give any employee, agent, or representative of the other Party any gratuity with a view toward securing any business from the other Party or influencing such person with respect to the business between the Parties.

     21. CONFIDENTIAL INFORMATION

     Any confidential information exchanged pursuant to this Agreement (and the terms of this Agreement itself) will be governed by Section 9.7 (Confidentiality) of the Master Agreement, with the Parties hereunder deemed the Disclosing Party and/or Receiving Party as applicable, provided that, notwithstanding anything to the contrary either Party shall may use confidential information in order to exercise its rights and discharge its obligations hereunder. The confidentiality provisions set forth in Section 9.7 of the Master Agreement shall continue as part of this Agreement even after the termination or expiration of the Master Agreement.

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     22. MISCELLANEOUS

          (a) Governing Law and Dispute Resolution. This Agreement shall be construed in accordance with and governed by the laws of the Federal Republic of Germany excluding its rules on the conflict of laws and of the United Nations Convention on the International Sale of Goods (CISG). All disputes arising in connection with this Agreement or its validity or any agreement provided herein which cannot be resolved by mutual agreement of the Parties shall be finally settled by the German Institution of Arbitration in accordance with the Arbitration Rules of the German Institution of Arbitration e.V. (DIS) without recourse to the ordinary courts of law (except for challenges to the validity of shareholder resolutions which shall be submitted to the competent court in Berlin). The place of arbitration is Berlin, Germany. The arbitral tribunal consists of three arbitrators. The arbitrators must be capable of being appointed a judge in accordance with the relevant German legal rules. The substantive law of the Federal Republic of Germany is applicable to the dispute. The language of the arbitral proceedings is English.

          (b) Compliance with Laws and Regulations. Each Party will comply with all applicable laws, regulations and ordinances.

          (c) Force Majeure. Neither of the Parties shall be liable for prevention from fulfilling the contract as a result of force majeure, particularly natural disasters, war, unrest, labour disputes, suspension or interruption of operations due to extreme factors, administrative measures and other events outside the control of the Parties, especially such as a shortfall of silicon deliveries. This includes cases of force majeure taking place at suppliers of EverQ. In such events, the Parties shall contact each other without delay and discuss the measures to be taken. The Parties undertake to re-enable the contract’s fulfillment by all technical and economically reasonable means. If EverQ has approved a narrower Force Majeure — clause in regard to a Product Sales Transaction explicitly in writing (e. g., through written approval of the customer’s agreement or use of a-pre-approved standard term, the use of which is to be notified from Evergreen to EverQ), EverQ, shall at its own expense, indemnify and hold Evergreen harmless from any damage that may occur in case of Force Majeure according to this Section 22(c) (Force Majeure).

          (d) Export. No Party shall export or re export, directly or indirectly, any technical information disclosed hereunder or direct product thereof to any destination prohibited or restricted by the applicable export control regulations, including the U.S. Export Administration Regulations and regulations of Germany, without the prior authorization from the appropriate governmental authorities.

          (e) Mandatory Recycling. Should a mandatory recycling law become applicable to the Products, Evergreen Solar will make appropriate arrangements for recycling the Products. The cost of the recycling for the Products manufactured and available for shipment on or prior to the Sales Termination Date will be borne by EverQ.

          (f) Amendments and Waivers. Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each Party to this Agreement, or in the case of a waiver, by the Party against whom the waiver is to be effective.

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          (g) Delay; Remedies Not Exclusive. No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any or other further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

          (h) Assignment. Other than as expressly otherwise provided herein, this Agreement shall not be assignable or otherwise transferable by any Party hereto without the prior written consent of the other Party hereto; provided, however, that (i) neither Party shall be obligated to obtain the consent of the other Party under this Section 22(h) (Assignment) solely by virtue of a Change of Control of such Party, and such Party shall have the right to assign this Agreement, in its entirety including all rights and obligations, to such Party’s successor in such Change of Control, and (ii) any of the Parties may at any time and from time to time pledge or grant a security interest in all or any portion of its rights, title and interest under this Agreement as collateral security to secure obligations of such Party; provided that no such pledge or grant of a security interest shall (A) release such Party from any of its obligations hereunder or (B) substitute any such pledgee or grantee for such Party as a party hereto with any rights or remedies hereunder. Subject to the foregoing, the provisions of this Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns. Any assignment or transfer (including through a Change of Control) of this Agreement in violation of this Section 22(h) (Assignment) shall be null and void.

          (i) Language. All documentation, communication and services in connection with this Agreement in shall be in English.

          (j) Entire Agreement; Severability. This Agreement, together with any exhibits, constitutes the entire agreement between the Parties hereto and any of such Parties’ respective affiliates with respect to the subject matter of this Agreement and supersedes the Prior Agreement in its entirety, all prior communications, agreements and understandings, both oral and written, with respect to the subject matter of this Agreement. In the event any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision, and the Parties agree to negotiate, in good faith, a legal and enforceable substitute provision which most nearly effects the Parties’ intent in entering into this Agreement.

          (k) Other Remedies; Specific Performance. Except as otherwise provided herein, any and all remedies herein expressly conferred upon a Party will be deemed cumulative with and not exclusive of any other remedy conferred hereby or by law or equity upon such Party, and the exercise by a Party of any one remedy will not preclude the exercise of any other remedy. The Parties hereto agree that irreparable damage may occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that notwithstanding Section 22(a) (Governing Law and Dispute Resolution), the Parties may be entitled to seek an injunction (einstweilige Verfügung) to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which they are entitled at law or in equity.

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          (l) Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each Party hereto shall have received a counterpart hereof signed by the other Party hereto.

          (m) Other Agreements. No other express, written contracts and/or agreements between EverQ, Evergreen, Q-Cells and/or REC (and/or affiliates of the aforementioned companies) shall be affected by this Agreement.

     IN WITNESS WHEREOF, the authorized representatives of the Parties have executed this agreement on the dates indicated below to be effective as of the effective date.

EVERGREEN SOLAR, INC.	EVERQ GMBH
/s/ Michael El-Hillow	/s/ T. Scheidegger / /s/ C. Langden
Signature	Signature
Michael El-Hillow	T. Scheidegger / C. Langden
Name	Name
CFO	CEO / CSO
Title	Title
October 6, 2008	Oct 7, 2008 / Oct. 7, 2008
Date:	Date:

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Exhibit A

Products*

[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]

* This schedule shall be revised from time to time by mutual agreement of the Parties to include new ES, ES-A and ES-B models with higher power ratings than those currently listed as manufacturing improvements result in conversion efficiency increases.

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Exhibit B

Warranty

Evergreen Solar

Photovoltaic Panels Limited Warranty

Limited Warranty: Materials or Workmanship

Evergreen Solar warrants the panels to be free from defects in materials or workman-ship under normal application, installation, use, and service conditions. The panels must be installed according to the latest Safety, Installation and Operation Manual provided by Evergreen Solar otherwise this warranty will be void. If the product fails to conform to this warranty, then, for a period ending sixty (60) months from date of sale to the original consumer purchaser, Evergreen Solar will, at its option, either repair or replace the product or refund the purchase price. The repair, replacement, or refund remedy shall be the sole and exclusive remedy provided under this warranty.

Limited Warranty: Power Output

Evergreen Solar warrants for a period often (10) years from the date of sale to the original consumer purchaser that the power rating at Standard Test Conditions will remain at 90% or greater of Evergreen Solar’s Minimum Specified Power Rating. Evergreen Solar further warrants fora period of twenty-five (25) years from the date of sale to the original consumer purchaser that the power rating at Standard Test Conditions will remain at 80% or greater of Evergreen Solar’s Minimum Specified Power Rating.

Evergreen Solar will, at its option, repair or replace the product, refund the purchase price, or provide the purchaser with additional panels to make up lost power, provided that such degradation is determined to be due to defects in materials or workmanship under normal installation, application, and use. The panels must be installed according to the latest Safety, Installation and Operation Manual provided by Evergreen Solar otherwise this warranty will be void. The relevant Minimum Specified Power Rating is defined in Evergreen Solar’s product data sheet at the time of shipment. Standard Test Conditions are irradiance of 1000W/m², 25° C cell temperature, and AM 1.5 light spectrum.

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Limitations and Conditions

The remedy set forth in these limited warranties shall be the sole and exclusive remedy provided under the extended term warranty, unless otherwise agreed by Evergreen Solar in writing. In Germany, these limited warranties are neither a “guarantee of the quality” of the panel pursuant to §443 BGB (German Civil Code) nor are they an “acceptance of a guarantee” pursuant to §276 BGB,

The limited warranties set forth herein do not apply to any panel which in Evergreen Solar’s sole judgement has been subjected to misuse, neglect, or accident; has been damaged through abuse, alteration, improper installation or application, or negligence in use, storage, transportation, or handling; has not been installed in accordance with the latest Safety, Installation and Operation Manual provided by Evergreen Solar or has in anyway been tampered with or repaired by anyone other than Evergreen Solar or its authorized agent.

The limited warranties do not cover costs associated with panel installation, removal, testing, packaging, transportation, or reinstallation; other costs associated with obtaining warranty service; or costs, lost revenues, or lost profits associated with the performance or nonperformance of defective panels.

Any panels repaired or replaced by Evergreen Solar under a warranty claim shall be covered by the same warranties and original term as the first product purchased under said claim. The term shall not be prolonged or reset from the date of sale to the original consumer purchaser. Any replaced parts or products become the property of Evergreen Solar.

These limited warranties apply only to the first end-user purchaser of the panels or to any subsequent owners of the original building or site where the panels were first installed. The limited warranties set forth herein are expressly in lieu of and exclude all other express or implied warranties, including but not limited to warranties of merchantability and of fitness for particular purpose, use, or application and all other obligations or liabilities on the part of Evergreen Solar, unless such other warranties, obligations, or liabilities are expressly agreed to in writing signed and approved by Evergreen Solar.

Evergreen Solar shall have no responsibility or liability whatsoever for damage or injury to persons or property, or for other loss or injury resulting from any cause whatsoever arising out of or related to the product, including, without limitation, any defects in the panel, or from use or installation. Under no circumstances shall Evergreen Solar be liable for incidental, consequential, or special damages, howsoever caused.

Evergreen Solar’s aggregate liability, if any, in damages or otherwise, shall not exceed the payment, if any, received by seller for the unit of product or service furnished or to be furnished, as the case maybe, which is the subject of claim or dispute. Some jurisdictions do not allow limitations on implied warranties or the exclusion or limitation of damages, so the above I imitations or exclusions may not apply to you.

If a part, provision, or clause of terms and conditions of sale, or the application thereof to any person or circumstance is held invalid, void, or unenforceable, such holding shall not affect and leave all other parts, provisions, clauses, or applications of terms and conditions remaining, and to this end the terms and conditions shall be treated as severable.

This warranty gives you specific legal rights; and you may also have other rights that vary from state to state and country to country. Neither party shall be in any way responsible or liable to the other party, or to any third party, arising out of nonperformance or delay in performance of the terms and conditions of sale due to acts of God, war, riot, strikes, unavailability of suitable and sufficient labor, and any unforeseen event beyond its control, including, without limitations, any technological or physical event or condition which is not reasonably known or understood at the time of sale.

Any claim or dispute regarding these warranties shall be governed by and construed in accordance with the laws of the State of New York (US).

Obtaining Warranty Performance

If you feel you have a claim covered by warranty, you must promptly notify the dealer who sold you the panel of the claim. The dealer will give advice handling the claim. If further assistance is required, write Evergreen Solar for instructions.

The customer must submit a written claim, including adequate documentation of panel purchase, serial number, and product failure. Evergreen Solar will determine in its sole judgment the adequacy of such claim. Evergreen Solar may require that product subject to a claim be returned to the factory, at the customer’s expense. If product is determined to be defective and is replaced but is not returned to Evergreen Solar, then the customer must submit adequate evidence that such product has been destroyed or recycled.

Note: This document may be provided in multiple languages. If there is a conflict among versions, the English language version dominates.

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Exhibit C

Schedule of Customer Contracts

1. [****]

2. [****]

3. [****]

4. [****]

5. [****]

6. [****]

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Exhibit D

Schedule of Dedicated Production Capacity in MWp between 2008 and 2011

[****]

If a Specified Contract is assigned pursuant to Section 14 (f) of the Amended and Restated Sales Representative Agreement, the Dedicated Production Capacity shall be reduced by the amount of production capacity in MWp needed for the fulfillment of the respective Specified Contract from the next quarter following the date of assignment.

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Exhibit E

[****]

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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.

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FINAL

QUAD TECHNOLOGY
LICENSE AGREEMENT

By and Between

EVERGREEN SOLAR, INC.

AND

EVERQ GMBH

As of October 6, 2008

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TABLE OF CONTENTS

Article 1 - Definitions	1
Section 1.1 - Construction	1
Section 1.2 - Definitions	2
Article 2 - Rights and Licenses	10
Section 2.1 - E License Grant to EQ	10
Section 2.2 - EQ License Grant to E	10
Section 2.3 - Commercial Improvements	11
Section 2.4 - Covenants Not to Sue	11
Section 2.5 - Sublicensing	11
Section 2.6 - Reservation of Rights; No Implied Licenses	13
Section 2.7 - In-licensing	13
Section 2.8 - Sourcing	13
Article 3 - Technology Transfer	13
Section 3.1 - Quarterly Meetings	13
Section 3.2 - Delivery of Technical Deliverables	14
Section 3.3 - Copies	14
Section 3.4 - Operational Data	15
Article 4 - Consideration and Payment	15
Section 4.1 - Quad/COF Technology Royalties	15
Section 4.2 - Royalties for Quad Commercial Improvements	18
Section 4.3 - Royalties for Additional SR Technology	19
Section 4.4 - Royalties on Sales by Sublicensees	20
Section 4.5 - Royalties on Technology Post-Termination	21
Section 4.6 - Royalties on External Intellectual Property Rights	21
Section 4.7 - Royalty Evaluation by Experts	21
Section 4.8 - Miscellaneous Payment Terms	22
Section 4.9 - Taxes	22
Section 4.10 - Audit	23
Article 5 - Intellectual Property Rights	23
Section 5.1 - Ownership	23
Section 5.2 - Enforcement of Jointly Owned Commercial Improvements	25
Section 5.3 - Third Party Licenses	26
Section 5.4 - Patent Marking	26
Section 5.5 - Trademarks Licenses and Licensed Product Labeling	27
Section 5.6 - Further Cooperation	27
Section 5.7 - Additional Registered Intellectual Property Rights	27
Article 6 - Warranties	28
Section 6.1 - Representations and Warranties	28

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Section 6.2 - Remedies for Breaches of Warranties	29
Section 6.3 - Disclaimer	30
Article 7 - Confidential Information	30
Section 7.1 - Definition	30
Section 7.2 - Confidentiality Obligation	31
Section 7.3 - Legal Disclosure	31
Section 7.4 - General Knowledge	31
Article 8 - Term	32
Section 8.1 - Term	32
Section 8.2 - Special Termination Right	32
Section 8.3 - Effect of Termination	32
Article 9 - Rights in Bankruptcy	32
Article 10 - General Provisions	33
Section 10.1 - Limitation of Liability	33
Section 10.2 - Notices	34
Section 10.3 - Language	34
Section 10.4 - Amendments and Waivers	34
Section 10.5 - Assignment	35
Section 10.6 - MOU; LTTA; Entire Agreement; Severability	35
Section 10.7 - Other Remedies; Specific Performance	35
Section 10.8 - Governing Law and Dispute Resolution	36
Section 10.9 - Compliance with Laws and Regulations	36
Section 10.10 - Export	36
Section 10.11 - Force Majeure	36
Section 10.12 - Independent Contractors	37
Section 10.13 - Third Party Beneficiaries	37
Section 10.14 - Counterparts	37

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QUAD TECHNOLOGY
LICENSE AGREEMENT

     This Quad Technology License Agreement (this “Agreement”) is made by and between Evergreen Solar, Inc., a Delaware corporation (“E”), and EverQ GmbH, a limited liability company (GmbH), incorporated under the laws of the Federal Republic of Germany (“EQ”), as of October 6, 2008 with an effective date as of October 25, 2007 (the “Effective Date”). E and EQ are hereinafter referred to individually by their respective names or as “Party” and collectively as “Parties.”

Recitals:

     WHEREAS, E and EQ have entered into that certain Amended and Restated License & Technology Transfer Agreement (the “LTTA”) By and Between E and EQ dated as of September 29, 2006 which was modified by the provisions of an addendum thereto dated April 30, 2007 (as modified by such addendum and further modified by the MOU (as defined below);

     WHEREAS, E, Q-Cells AG (“Q”) and Renewable Energy Corporation ASA (“REC”) (collectively, the “EQ Founders”) and EQ have entered into a Memorandum of Understanding dated as of October 25, 2007 (the “MOU”); and

     WHEREAS, E and EQ wish to enter into this Agreement and agree that it shall supersede and replace in their entirety Sections F and G of the MOU;

     NOW, THEREFORE, in consideration of the foregoing premises and the representations, warranties, covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and accepted, and intending to be legally bound hereby, the Parties hereto hereby agree as follows:

ARTICLE 1
DEFINITIONS

     Section 1.1 — Construction

     In this Agreement (a) headings are for convenience of reference only and shall not affect the interpretation of the provisions of this Agreement except to the extent that the context otherwise requires; (b) words importing the singular shall include the plural and vice versa; (c) words denoting individuals shall include any form of entity and vice versa; (d) words denoting any gender shall include all genders; (e) where any act, matter or thing is required by this Agreement to be performed or carried out on a certain day and that day is not a business day then that act, matter or thing shall be carried out or performed on the next following business day; (f) unless specified otherwise, any reference herein to any Article, Section, clause, sub-article, sub-clause, Appendix or Exhibit shall be deemed to be a reference to an Article, Section, clause, sub-article, sub-clause, Appendix or Exhibit of this Agreement; (g) any reference to any agreement, document or instrument shall refer to such agreement, document or instrument as

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     amended, modified, supplemented, or novated; and (h) the words “include,” “including” and the derivations thereof shall not be limiting.

     Section 1.2 — Definitions

     As used herein:

     “Actual Quad Rate” means [****].

     “Actual Quad Cost” shall mean [****] using the Quad/COF Technology in EQ 3, or any improvements to the Quad/COF Technology developed by E and implemented by EQ, computed based on the Cost Comparison Spreadsheet.

     “Additional SR Technology” means any Commercial Improvements to the String Ribbon Technology (including any Commercial Improvements to such Commercial Improvements) that are not Commercial Improvements exclusively applicable to either or both of the Gemini String Ribbon Technology or the Quad/COF Technology. For clarification, Additional SR Technology excludes technology that is not incorporated in the process of manufacturing of String Ribbon Wafers (i.e., Technology for cell or module manufacturing processes are excluded from Commercial Improvements); provided, however, it is acknowledged that Additional SR Technology may improve the quality of Wafers in a manner that is beneficial to the Cell or Panel manufacturing process. For example, enhancements in [****] that result from Wafer manufacturing processes may constitute Additional String Ribbon Technology even though they are beneficial to [****].

     “Affiliate” means any person directly or indirectly controlling or controlled by, or under direct or indirect common control with, a Party at the relevant time. For the purposes of this definition, “control” means the beneficial ownership of more than fifty percent (50%) of the voting rights.

     “Agreement” has the meaning set forth in the preamble to this Agreement.

     “Applicable Commercial Improvements” means the Additional SR Technology and the Quad Commercial Improvements.

     “Applicable Technology” means the Quad/COF Technology, Quad Commercial Improvements, the Additional String Ribbon Technology and Commercial Improvements to the String Ribbon Technology.

     “Cells” means photovoltaic cells made from Wafers.

     “Commercial Improvement” means Intellectual Property Rights and Technology associated with a patented or patentable improvement or development owned or Licensable by a Party after the Effective Date that can be incorporated in the String Ribbon Technology (together with any other Commercial Improvements) to substantially or materially reduce the production costs or substantially or materially increase the output, effectiveness, utility or value of the Licensed Products; provided that the Intellectual Property Rights and Technology associated with a particular Commercial Improvement shall exclude (i) the Intellectual Property Rights

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associated with the underlying Commercial Improvement or the Quad/COF Technology on which or from which such Commercial Improvement was based, derived or developed and (ii) the Intellectual Property Rights associated with any subsequent Commercial Improvement that represents an improvement or further development of such Commercial Improvement.

     “Confidential Information” has the meaning set forth in Section 7.1 (Definition).

     “Cost Comparison Spreadsheet” means the spreadsheet, a printout of which is attached hereto as Exhibit A, that shall be used for calculating the EQ Cost Base and comparing it to the Actual Quad Cost. The Parties may improve the Cost Comparison Spreadsheet if its economic assumptions or methodology are incorrect or in conflict with the actual costs incurred in the operation of EQ 2 or EQ 3 or on the basis of any other relevant factors that reasonably need to be considered. The Cost Comparison Spreadsheet shall take into account all key cost drivers including, without limitation, the following:

          [****]

     “Cost Savings” means the aggregate reduction of Total Production Costs of a Licensed Product attributable to [****] incorporated into or used to manufacture that Licensed Product. Any change in yields and conversion efficiencies shall be taken into account in determining the “Cost Savings.” The “Cost Savings” is determined by comparison of the aggregate difference of [****] from [****], or determined by comparison to [****]).

     “Cut on the Fly” means [****].

     “Declining Factor” means, for each applicable period of production in the table below, the amount set forth opposite such period in the table:

Production Period	Declining Factor
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]

     Each year in the above table to which respective Quad Royalty Rates or other royalty rates, as the case may be, apply shall start upon the date of Full Production of the Licensed Products incorporating the applicable Technology the royalty for which is being measured. Successive years for purposes of determining the applicable Declining Factor shall start on successive anniversaries of the date of such Full Production. For example, (i) in the case of Licensed Products made with the Quad/COF Technology, if such first sale were to take place on

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[****], and Full Production was to occur on [****], then the Ramp-Up Period would run from [****] to [****], the “[****]” would commence on [****], and the “[****]” would commence on [****], and (ii) in the case of Licensed Products made with an Applicable Commercial Improvements, if such first sale were to take place on [****], and Full Production was to occur on [****], then the Ramp-Up Period would run from [****] to [****], the “[****]” would commence on [****], and the “[****]” would commence on [****].

     “Direct Production Costs” means [****].

     “Disclosing Party” has the meaning set forth in Section 7.1 (Definition).

     “E Full Production” shall commence with respect to the Quad/COF Technology as implemented at E’s Devens, Massachusetts facility, [****].

     “E Measuring Period” shall mean [****].

     “E IP” means the E Technology and E Intellectual Property Rights.

     “E Intellectual Property Rights” means all Intellectual Property Rights that protect E’s interest in the E Technology.

     “E Technical Deliverables” means any reasonably available documentation, records and other tangible items constituting E Technology and E Intellectual Property Rights.

     “E Technology” means (a) the Quad/COF Technology and (b) the Applicable Commercial Improvements owned or Licensable by E or its Affiliates at any time during the Extended Licensing Period; provided, however, that E Technology shall not include (i) any Applicable Commercial Improvement offered to EQ which EQ elects not to license, (ii) E Technology first owned or Licensable by E or its Affiliates after the Extended Licensing Period, and (iii) in the event of an acquisition of E, Intellectual Property Rights of the acquirer of E (unless any of acquirer’s Intellectual Property Rights are used by E and would constitute Applicable Commercial Improvements if they had been developed by or were Licensable by E).

     “Effective Date” means [****].

     “EQ” has the meaning set forth in the preamble to this Agreement.

     “EQ 2” shall mean the second production facility of EQ as constructed as of October 25, 2007 which uses the Gemini String Ribbon Technology licensed from E.

     “EQ 2 Cost Base” shall be the actual cost per Wp of Wafer production at EQ 2 calculated based on the Cost Comparison Spreadsheet.

     “EQ 3” shall mean the third production facility of EQ planned as of the Effective Date that is expected to have a capacity of approximately 75 MW and expected to use the Quad/COF Technology.

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     “EQ Intellectual Property Rights” means all Intellectual Property Rights that protect EQ’s interest in the EQ Technology.

     “EQ IP” means EQ Technology and EQ Intellectual Property Rights.

     “EQ Founders” has the meaning set forth in the Recitals.

     “EQ Technical Deliverables” means any reasonably available documentation, records and other tangible items constituting EQ Technology or EQ Intellectual Property Rights.

     “EQ Technology” means all Applicable Commercial Improvements owned or Licensable by EQ or its Affiliates at any time during the Extended Licensing Period; provided, however, that EQ Technology does not include (i) any Applicable Commercial Improvements offered to E which E elects not to license, (ii) EQ Technology first owned or Licensable by EQ or its Affiliates after the Extended Licensing Period, and (iii) in the event of an acquisition of EQ, Intellectual Property Rights of the acquirer of EQ (unless any of acquirer’s Intellectual Property Rights are used by EQ and would constitute Applicable Commercial Improvements if they had been developed by or were Licensable by EQ).

     “Extended Licensing Period” means the period beginning on the Effective Date and ending on (i) the end of the Post-Liquidity Event Licensing Period if the Liquidity Event occurs, and (ii) the end of the [****] Post-Termination Licensing Period if the Liquidity Event Failure occurs.

     “First Production Year” shall be the [****].

     “Full Production” shall commence (i) with respect to the Quad/COF Technology as implemented at EQ 3, at [****]; and (ii) with respect to any Applicable Commercial Improvement, [****].

     “Gemini String Ribbon Technology” shall mean the String Ribbon Technology which produces two silicon crystalline ribbons simultaneously in a single furnace.

     “Improved Quad/COF Technology” is the Quad/COF Technology and all Quad Commercial Improvements that are owned or Licensable by E as of or prior to the end of the Extended Licensing Period.

     “Indemnified Party” means any party seeking entitled to seek indemnification pursuant to Section 6.2 (Liability and Limitations of Liability).

     “Indemnifying Party” has the meaning set forth in Section 6.2 (Liability and Limitations of Liability).

     “Intellectual Property Rights” means all rights in, to, or arising out of: (i) any Patents; (ii) inventions, discoveries (whether patentable or not in any country), invention disclosures, improvements, trade secrets, proprietary information, know-how, technology and technical data; (iii) copyrights, copyright registrations, mask works, mask work registrations, and applications

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therefor in any country, and all other rights corresponding thereto throughout the world; and (iv) any other proprietary rights in or to Technology anywhere in the world.

     “IPO” means registered public offering (or a regulatory process with an applicable European securities regulatory authority that is used for public offerings in European jurisdictions in lieu of the registration process required by the United States Securities and Exchange Commission) of shares of EQ [****] which results in a listing of the shares in EQ on a stock exchange of recognized international standing or on an authorized marketplace of recognized international standing.

     “Jointly Own” has the meaning set forth in Section 5.1(a)(i) (Definition).

     “Jointly Owned Commercial Improvements” has the meaning set forth in Section 5.1(a) (Joint Inventions).

     “Licensable” means possession of the ability to grant a license or sublicense of, or within, the scope provided for in this Agreement without payment of any fee to, or violating the terms of any agreement or other arrangements with a Third Party and without violating any applicable laws, rules or regulations.

     “Licensor” has the meaning set forth in Section 4.3 (Royalties for Additional SR Technology).

     “Licensed-in Technology” has the meaning set forth in Section 2.7 (In-Licensing).

     “Licensed Products” means Wafers, Cells, and/or Panels, as the case may be, in which the Wafers are made using String Ribbon Technology.

     “Licensee” has the meaning set forth in Section 4.3 (Royalties for Additional SR Technology).

     “Liquidity Event” means the IPO or any other transaction or event mutually agreed by all of the EQ Founders that allows the EQ Founders to sell some of all of their ownership interests in EQ.

     “Liquidity Event Failure” means the failure of the parties to cause the Liquidity Event to occur on or prior to the later of (i) December 31, 2009, and (ii) such other date as the Parties may agree upon as a revised deadline by which the Liquidity Event must occur.

     “Measuring Period” shall mean the last three (3) full calendar months of the First Production Year.

     “MOU” has the meaning set forth in the Recitals.

     “Nominal Quad Rate” means [****] (which amount has been determined based upon [****]).

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     “Nominal Quad Royalties” has the meaning set forth in Section 4.1(a)(i) (Nominal Royalty Rate during Ramp-Up Period and First Year of Production).

     “Panels” means panels or modules comprised of several interconnected Cells in a weather resistant package usually consisting of a laminate of a superstrate, often glass, encapsulant, interconnected cells, and a backsheet.

     “Party” has the meaning set forth in the preamble to this Agreement.

     “Patent” means any United States, German, international or foreign patent or any application therefor and any and all reissues, divisions, continuations, renewals, extensions and continuations-in-part thereof.

     “Post-Liquidity Event Licensing Period” means the [****] period commencing upon a Liquidity Event.

     “Potential Quad Cost” has the meaning set forth in Section 4.1(b)(ii)(A) (Comparison to E Production Costs).

     “Pre-Liquidity Event Licensing Period” means the period commencing on the Effective Date and ending on the first to occur of the Liquidity Event and the Liquidity Event Failure.

     “Q” has the meaning set forth in the Recitals.

     “Quad/COF Technology” means E’s String Ribbon Technology incorporated in E’s Wafer production furnace known as “Quad” furnace technology [****], as such Quad furnace technology exists on the Signing Date; provided that Quad/COF Technology shall be deemed to include [****].

     “Quad Commercial Improvement” means any Commercial Improvement that is incorporated in the Quad/COF Ribbon Technology (together with any other Quad Commercial Improvements); provided that the Intellectual Property Rights and Technology associated with improvements to Quad/COF Technology referred to in Section 4.1(b)(ii)(B) [****] shall be deemed to be Quad Commercial Improvements once they have been incorporated into the Quad/COF Technology. If a Quad Commercial Improvement also constitutes a Commercial Improvement to the Gemini String Ribbon Technology and is licensed to EQ for use with the Gemini String Ribbon Technology, such license and any applicable royalty, if any, shall be governed by and paid pursuant to, the LTTA or another agreement between the Parties.

     “Quad Cost Savings” means the difference between the EQ 2 Cost Base and the Actual Quad Cost during the Measuring Period.

     “Quad Furnace” means the String Ribbon Wafer furnace, including any consumable parts, that incorporates the Quad/COF Technology and any Quad Commercial Improvements licensed by EQ, as such technology or Quad Commercial Improvements may be modified from time to time following the Effective Date.

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     “Quad Royalty” means the royalties payable with respect to the Quad/COF Technology pursuant to Section 4.1 (Quad/COF Technology Royalties).

     “Quad Royalty Rate” means the royalty rate payable for the use of the Quad/COF Technology, as determined pursuant to Section 4.1 (Quad/COF Technology Royalties).

     “Quad Technical Deliverables” means E Technical Deliverables related to the Quad Furnace.

     “Qualified Affiliate” of EQ means (a) any entity that is wholly-owned by EQ and (b) any entity in which EQ holds at least [****] % of the equity interest and, within the [****] period commencing on the effective date of the applicable sublicensing agreement between EQ and such entity, EQ continues to hold at least [****] %of the equity interest in the entity and neither EQ nor the affiliate is or becomes a party to any agreement that would at any time reduce EQ’s ownership below [****] %, provided that to constitute a Qualified Affiliate any other holders of equity interests in that entity must be solely financial and/or local strategic partners (e.g., local field help or distributors) that are not themselves manufacturers of silicon or solar technology companies or Affiliates of manufacturers such silicon or solar technology companies, EQ must hold full management control over operations of such entity and the Technology used by such entity and neither EQ nor the affiliate is party to any agreement that would reduce EQ’s management control over operations and the Technology at any time during the five (5)-year period after commencement of a sublicensing agreement.

     “Qualified Country” means the countries set forth in the list previously provided to EQ and any additional country (a) where enforceable patent protection exists in favor of E for Applicable Technology, (b) in which there are pending patent applications for the Applicable Technology, or (c) where in the opinion of E, there is not an unreasonable risk of violation of the intellectual property rights related to the Applicable Technology. The list of Qualified Countries will be updated in writing from time to time at the request of EQ at reasonable intervals with E responding to any such request within a reasonable timeframe, during which E shall determine whether additional countries meet the standard set forth in clause (c) above whereby acceptance of an additional country requested by EQ shall not be unreasonably withheld; provided that EQ may only request that E evaluate a particular country after the establishment of a bona fide plan to investigate locating facilities in such country that has been approved by the Supervisory Board of EQ (or Management Board of EQ, if EQ has been converted or transformed to the legal form of a German or European stock corporation). Any dispute, controversy or claim arising under, out of or relating to this clause, including, without limitation, its validity, binding effect, interpretation, performance or breach, shall be referred to and finally determined by arbitration in accordance with the WIPO Expedited Arbitration Rules. The place of arbitration shall be London. The language to be used in the arbitral proceedings shall be English. The dispute, controversy or claim shall be decided in accordance with the law of the Federal Republic of Germany.

     “Ramp-up Period” means (i) in the case of the Quad/COF Technology, the period beginning on the date when E has provided EQ with the Quad/COF Technology and ending on the day prior to the Start of Full Production, and (ii) in the case of any Applicable Commercial Improvements, the period beginning on the first production of Licensed Product using such

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Applicable Commercial Improvements and ending on the day prior to the Start of Full Production.

     “REC” has the meaning set forth in the Recitals.

     “Receiving Party” has the meaning set forth in Section 7.1 (Definition).

     “Registered E Intellectual Property Rights” means all E Intellectual Property Rights (including Patents) that have been registered, filed, issued or otherwise perfected or recorded with or by any state, government or other public or quasi-public legal authority, including any applications for filings for any such rights.

     “Registered EQ Intellectual Property Rights” means all EQ Intellectual Property Rights (including Patents) that have been registered, filed, issued or otherwise perfected or recorded with or by any state, government or other public or quasi-public legal authority, including any applications for filings for any such rights.

     “Signing Date” means the date this Agreement is executed by both E and EQ.

     “Sold” or “Sell” means any direct or indirect disposition, by sale, lease, use or otherwise, of a Licensed Product.

     “Start of Full Production” shall mean the first day of Full Production.

     “String Ribbon Technology” means Technology incorporated in the String Ribbon process, and includes, without limitation, the Gemini String Ribbon Technology and the Quad/COF Technology, but excludes [****].

     “String Ribbon” means [****].

     “Technical Deliverables” means either the E Technical Deliverables or the EQ Technical Deliverables, as the context may require.

     “Technology” means information and technology in tangible and/or intangible form and materials, embodiments, implementations or improvements of any technology, including, but not limited to: software, media, data collections, databases, techniques, methods, processes, formulae, systems, hardware, equipment, prototypes, proofs of concept, apparatuses, hardware, software, algorithms, files, routines, documents, designs, drawings, plans, specifications and the like.

     “Termination Date” means the date when this Agreement is terminated in accordance with its terms.

     “Third Party” means a Person other than Q or REC who is neither a Party nor an Affiliate of a Party.

     “Total Production Costs” means the total of the Direct Production Costs and [****] associated with the respective product.

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     “[****] Post-Termination Licensing Period” means the [****] period commencing on the Termination Date.

     “Unit” has the meaning set forth is Section 4.1(a) (Royalty Rate).

     “used for” — Technology is “used for” Licensed Products if incorporated into or used in the manufacture of those Licensed Products.

     “Wafers” means crystalline silicon wafers manufactured to be, but not yet made into Cells.

     “Wp” means watt peak power.

ARTICLE 2
RIGHTS AND LICENSES

     Section 2.1 — E License Grant to EQ

     Subject to the terms and conditions of this Agreement, E hereby grants and agrees to grant to EQ, (a) in the case of the Quad/COF Technology, effective upon the Effective Date, and, (b) in the case of Applicable Commercial Improvements that pursuant to Section 2.3 (Commercial Improvements) must be offered for license by E, effective upon EQ’s acceptance of such a license, a world-wide, non-exclusive, non-transferable, perpetual, irrevocable, (and as applicable) royalty-bearing license (to the extent specified in this Agreement), without the right to sublicense (except as expressly permitted in Section 2.5 (Sublicensing)), under the E Intellectual Property Rights, to make (but not have made, except as contemplated in this Agreement pursuant to Section 2.5 (Sublicensing)), use, sell, offer for sale, import or otherwise commercialize or exploit Licensed Products, to use the E Technology in connection with the foregoing, and to otherwise operate EQ and commercialize its products using the Applicable Commercial Improvements and Quad/COF Technology. It is understood that the foregoing license to EQ includes, without limitation, the right to change and make improvements and extensions to the E Technology licensed hereunder from E and to commercially exploit such changes and improvements in accordance with such license, subject to the obligations to license or offer to license Applicable Commercial Improvements to E and certain restrictions on EQ’s right to sublicense such Applicable Commercial Improvements.

     Section 2.2 — EQ License Grant to E Subject to the terms and conditions of this Agreement, EQ hereby grants and agrees to grant to E, effective upon E’s acceptance of a license to any Applicable Commercial Improvement that pursuant to Section 2.3 (Commercial Improvements) must be offered for license by E, a world-wide, non-exclusive, non-transferable (except pursuant to Section 9.5 (Assignment)), perpetual, irrevocable, royalty-bearing (except as set forth in Section 4.2 (Royalties for Quad Commercial Improvements) and Section 4.3 (Royalties for Additional SR Technology)), sublicensable (as contemplated in this Agreement pursuant to Section 2.5 (Sublicensing), license, under the EQ Intellectual Property Rights to make, have made, use, sell, offer for sale, import or otherwise commercialize or exploit Licensed Products. It is understood that the foregoing license to E includes, without limitation, the right for E to change and make improvements and extensions to such Applicable Commercial Improvements licensed hereunder from EQ and to commercially exploit said changes and

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improvements in accordance with such license, subject to the obligations to license or offer to license Applicable Commercial Improvements to EQ and certain restrictions on E’s right to sublicense such Applicable Commercial Improvements.

     Section 2.3 — Commercial Improvements

     The foregoing licenses set forth in Sections 2.1 (E License Grant to EQ) and 2.2 (EQ License Grant to E) specifically include Applicable Commercial Improvements that are first owned or Licensable by a Party during the Extended Licensing Period which must be offered promptly upon the relevant Technology being owned or Licensable by a Party and, if accepted by the other Party, shall be subject to Section 2.1 (E License Grant to EQ), if EQ is the licensee, or Section 2.2 (EQ License Grant to E), if E is the Licensee. Once accepted for license, neither the decision not to patent any applicable invention or inventions incorporated in the Applicable Commercial Improvements, nor the Licensor’s inability to patent the invention or inventions incorporated in the Applicable Commercial Improvement, shall affect the obligations of Licensee to pay royalties for the Applicable Commercial Improvements. For clarification purposes it is agreed between the Parties that each Party is obliged to offer further Applicable Commercial Improvements based on previous Applicable Commercial Improvements not accepted for licensing by the other Party, provided that both the further Applicable Commercial Improvements and the previous Applicable Commercial Improvements on which they are based are licensed by the other Party and royalties shall be payable by the other Party for such further Applicable Commercial Improvements and all previous Applicable Commercial Improvements on which they are based.

     Section 2.4 — Covenants Not to Sue

     Except in the case of Applicable Commercial Improvements that are offered to one Party pursuant to Section 2.3 but not accepted and not licensed pursuant to this Agreement, for which Applicable Commercial Improvements this Section 2.4 shall not apply in any respect, during the Post-Liquidity Event Licensing Period, under no circumstances shall either Party use or attempt to use rights arising on account of its technological developments of or improvements to any Technology licensed under this Agreement as a means of blocking or preventing the other Party from creating or implementing further technological development of or improvements to the Applicable Technology that is subject to this Agreement (including any Applicable Commercial Improvements thereto); except that this Section shall not be deemed to constitute a waiver of rights arising under Article 7 (Confidential Information). This provision shall not require either Party to disclose or share technological developments of or improvements to the Applicable Technology unless such developments and improvements are subject to the specific license requirements or are required to be offered for license pursuant to this Article 2. The prohibition set forth in the first sentence of this Section shall apply not only to the Parties, but also to their Affiliates with respect to any Technology licensed under this Agreement (including any Applicable Commercial Improvements thereto), and any further sublicensees of such Technology.

     Section 2.5 — Sublicensing

     (a) By EQ.

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     (i) EQ may not sublicense Quad/COF Technology and any Improved Quad/COF Technology or Additional SR Technology licensed from E prior to the Liquidity Event.

     (ii) Following the Liquidity Event, EQ may sublicense some or all of the Quad/COF Technology and the Improved Quad/COF Technology and Additional SR Technology licensed from E, without the right to sublicense such Technology further, to any Qualified Affiliate, but only for use in the Qualified Countries. If EQ wishes to sublicense any portion of the Improved Quad/COF Technology or Additional SR Technology to a Qualified Affiliate for use outside of the Qualified Countries, EQ may request a waiver of the restriction set forth in this Section from E, which E may deny if E determines in its sole discretion that there is an unreasonable risk of violation of the intellectual property rights related to the Applicable Technology.

     (iii) If EQ grants a sublicense to an entity that is a Qualified Affiliate and that entity ceases to be a Qualified Affiliate at any time before the end of the [****] period commencing on the effective date of the sublicense, then the applicable sublicense rights of the affiliate shall terminate unless this clause is then waived by E in writing in such instance in E’s sole discretion; provided that if the Qualified Affiliate ceases to remain a Qualified Affiliate as a result of circumstances outside the reasonable control of EQ, a waiver of the Qualified Affiliate requirements shall not be unreasonably withheld; and all sublicense agreements entered into pursuant to this Section shall specifically provide for such [****] ownership requirement and third-party beneficiary rights in favor of E to enforce such provision. If the sublicensee ceases to be a Qualified Affiliate after that [****] period, royalty and other consideration payable by the sublicensee will be paid to E as stated in Section 4.3(a) (EQ Sublicensing) with such sublicensee having the obligations of EQ set forth in such Section.

     (iv) Each sublicensing of an Applicable Commercial Improvement sublicensed by EQ to a entity that is a Qualified Affiliate shall commence a new [****] period during which the entity must remain a Qualified Affiliate (including the ownership limitations, the required status as a solely financial and/or local strategic partner and the full management control of the sublicensee by EQ).

     (b) By E. E may sublicense to its Affiliates or third parties, without the right to sublicense further, the Applicable Commercial Improvements licensed to it by EQ. Such sublicensing shall be on terms and conditions that are consistent with, and generally not less favorable to the licensor than, the terms of the license from EQ to E, as those terms are established pursuant to this Agreement (Quad/COF Technology Royalties).

     (c) Intellectual Property Protection. Each Party shall use reasonably precautions to protect the confidentiality of the String Ribbon Technology licensed to it by the other Party and the Parties agree to cooperate to establish a set of Intellectual Property Protection Protocols to govern the use and disclosure of the String Ribbon Technology.

     (d) Royalties on Sales by Sublicensees. Royalty payments for sublicensing of the Improved Quad/COF Technology and Additional String Ribbon Technology licensed to EQ and

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Applicable Commercial Improvements licensed to E are required as set forth in this agreement in Section 4.4 (Royalties on Sales by Sublicensees).

     Section 2.6 — Reservation of Rights; No Implied Licenses

     All rights not granted herein are reserved. Nothing in this Agreement shall be deemed to constitute the grant of any license or other right to a Party’s Intellectual Property Rights or Technology except as expressly set forth herein. All rights and obligations in this Agreement do not modify the rights and restrictions set forth in the LTTA

     Section 2.7 — In-licensing

     During the Extended Licensing Term, each Party agrees not to license Licensed-in Technology on an exclusive basis that would limit the ability of the other party to license such Licensed-in Technology on terms that would effectively serve to limit the ability of the other party to acquire rights to use such Licensed-in Technology. “Licensed-in Technology” means Technology licensed from a third party or third parties that would (either unto itself or in combination with Technology owned by the licensee) constitute a Commercial Improvement, assuming the licensor were to grant the licensee Licensable rights to the applicable Technology (including the rights to sublicense such Technology).

     Section 2.8 — Sourcing

     (a) Quad Sourcing. From the Signing Date until [****], subject to possible renewal as provided below (the “Sourcing Term”), the parties will reasonably cooperate to assist each other in securing the supply of Consumable Parts and Quad Furnace Assemblies, from suppliers selected by E after consultation with EQ to satisfy the expansion plans for both E and EQ. If neither party provides notice of termination of the Sourcing Term at least [****] prior to the end of the Sourcing Term, the cooperation obligation shall renew for an additional [****]. Thereafter, the Sourcing Term shall renew each subsequent year unless either party provides notice of termination at least [****] prior to the end of the new Sourcing Term.

     (b) ATS Sourcing. E and EQ agree to refrain from entering into exclusive supply agreements with ATS Automation Tooling Systems Inc.

ARTICLE 3
TECHNOLOGY TRANSFER

     Section 3.1 — Quarterly Meetings

     From and after the Signing Date until the end of the Post-Liquidity Event Licensing Period or the [****] Post-Termination Licensing Period, as applicable, the Parties shall meet on a quarterly basis (or as otherwise agreed upon by the Parties) to discuss (and each Party shall advise the other of) any Applicable Commercial Improvement that was acquired, developed or became Licensable since the prior quarterly meeting. As part of the discussions at the quarterly meetings, each Party shall promptly advise the other Party of all Applicable Commercial

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Improvements and, without limiting its obligations in Section 3.2 (Delivery of Technical Deliverables), provide reasonably sufficient details regarding (including Confidential Information relating to) all Applicable Commercial Improvements, to enable the other Party to determine whether it will accept a license for such Applicable Commercial Improvements. Additionally, Each party shall promptly advise the other party of, and provide sufficient details of all Technology associated with other (i.e., non-patentable) improvements or developments owned or Licensable by E after the Effective Date that are incorporated by such party in the Quad/COF Technology or Additional SR Technology (if Additional SR Technology is licensed by EQ) in commercial operation (and not on a pilot, developmental or experimental basis) in such party’s facilities. Each party shall deliver to the other party at least one copy of all reasonably available documentation, records and other tangible items and associated Technical Deliverables constituting or relating to those improvements or developments (including related Confidential Information), promptly upon availability. Materials will be provided in electronic form where practicable.

     Section 3.2 — Delivery of Technical Deliverables

     (a) In General. Each Party shall deliver to the other Party (to the extent it has not already done so) promptly following the Signing Date at least one copy of all Technical Deliverables in its possession in existence at the Signing Date and at reasonable periodic intervals thereafter until the end of the Post-Liquidity Event Licensing Period or the [****] Post-Termination Licensing Period, as applicable, for Applicable Commercial Improvements licensed by the other Party, at least one copy of all Technical Deliverables including Confidential Information incorporated therein as such materials become available. Materials will be provided in electronic form when practicable.

     (b) Quad Technical Deliverables. Notwithstanding Section 3.2(a), the Quad Technical Deliverables shall only be required to be delivered pursuant this Section 3.2(b).

     (i) As soon reasonably practicable following the Signing Date, E shall deliver to EQ the Technical Deliverables to the extent reasonably necessary for the repair, assembly and maintenance of the Quad Furnaces, and the purchase of consumable parts for the Quad Furnaces and to the extent reasonably required to obtain applicable certifications or comply with applicable law.

     (ii) Subject to the mutual agreement to a reasonable set of Intellectual Property Protection Protocols pursuant to Section 2.5(c) (Intellectual Property Protection), upon the last day of the First Production Year, E shall deliver to EQ any Quad Technical Deliverables that have not yet been delivered.

     Section 3.3 — Copies

     Each Party may copy, modify and otherwise use the Technical Deliverables received in accordance with and subject to the restrictions and licenses set forth herein as necessary to exercise the rights granted hereunder. Each Party agrees to maintain a document control system to control copies of such Technical Deliverables and otherwise treat such information as its own Confidential Information subject to the provisions of Article 7 (Confidential Information).

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     Section 3.4 — Operational Data

     Each Party shall take reasonable steps to share information regarding the operational performance of the licensed technology as well as, to the extent mutually agreed, performance through Cell manufacturing.

ARTICLE 4
CONSIDERATION AND PAYMENT

     Section 4.1 — Quad/COF Technology Royalties

     (a) Royalty Rate. EQ shall pay E a royalty (the “Quad Royalty”) equal to the Quad Royalty Rate multiplied by the number of Units (as defined below) Sold by EQ which were made using the Quad/COF Technology. One “Unit” shall mean one Wp produced by a Licensed Product. The Quad Royalty shall be determined promptly at the end of each fiscal quarter (i.e., March 31, June 30, September 30 and December 31) during which Licensed Products are Sold using the Quad/COF Technology, and shall be paid within [****] after the end of the applicable quarter. The Quad Royalty shall otherwise be calculated and paid as set forth below in this Section 4.1(a) with the Actual Quad Rate being determined pursuant to Section 4.1(b) (Calculating the Actual Quad Rate):

     (i) Nominal Royalty Rate during Ramp-Up Period and First Year of Production. The Quad Royalty Rate per Unit Sold during the Ramp-Up Period and First Year of Production shall equal the Nominal Quad Rate (such payments collectively are referred to as the “Nominal Quad Royalties”).

     (ii) Actual Royalty Rate after First Year of Production. The Quad Royalty Rate per Unit Sold after the First Year of Production shall equal the Actual Quad Rate.

     (iii) True-Up Payment. Upon completion of the First Production Year, the Quad Royalty on the Units Sold during the Ramp-Up Period and First Year of Production shall be calculated by multiplying the number of Units Sold prior to the end of the First Year of Production by the Actual Quad Rate. If such amount exceeds the Nominal Quad Royalties, EQ shall make a payment to E in the amount of the underpayment. If such amount is less than the Nominal Quad Royalties, E shall make a payment to EQ in the amount of the overpayment.

     (b) Calculating the Actual Quad Rate.

     (i) Actual Quad Cost Calculation.

     (A) Upon completion of the First Production Year, the EQ 2 Cost Base and the Actual Quad Cost will be calculated. Subject to Sections 4.1(a)(i)(B) and 4.1(a)(i)(C) below, when the Actual Quad Cost and the EQ 2 Cost Base have been calculated, those amounts shall be used to compute the Quad Cost Savings. The Quad Cost Savings will then be used to determine the Actual Quad Rate

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which shall be the Quad Royalty Rate for all Units Sold after the First Year of Production, subject to the alternative calculations for the Quad Royalty Rate set forth in Section 4.1(b) (Alternative Quad Royalty Rate Calculations). Although the Actual Quad Rate is subject to the other provisions of this Section 4.1(b), there will be no further changes to the EQ 2 Cost Base once it has been calculated in connection with the calculation of Quad Cost Savings pursuant to this Section 4.1(b)(i).

     At any time prior to the termination of rights pursuant to Section 4.1(b)(ii)(A), E agrees to cooperate with and to provide consultancy, assistance and support (including on-site attendances) needed to train EQ staff (as reasonably requested by EQ and as E deems reasonably appropriate) to install, operate and maintain the Wafer furnaces for the manufacture of Licensed Products through use of the Quad/COF Technology at EQ 3, to achieve the result that such furnaces will (1) operate at least as efficiently as the furnaces installed and operating in E’s Devens, Massachusetts, and in any case no less efficiently than comparable wafer furnaces operating at E manufacturing facilities and (2) produce Wafers that are optimized (to the extent reasonably possible in light of the design of the furnaces), in terms of production cost efficiency, production speed, quality and suitability for the manufacture of Cells and Panels in EQ 3. E will be reasonably compensated for consultancy, assistance and support provided pursuant to this provision. The rates and other particulars related to the assistance to be provided by E to EQ shall be negotiated in good faith by the Parties. The assistance to be provided by E pursuant to this paragraph is contingent upon EverQ hiring and assigning adequate staffing (in number and capabilities) to complete the installation of, operate and maintain the Wafer furnaces in EQ 3. To the extent reasonably possible, training will be accomplished through visits by EQ employees at E’s Devens, Massachusetts facility.

     (B) (i) To ensure the accuracy of the Quad Cost Savings used to determine the Actual Quad Rate pursuant to Section 4.1(a)(i)(A) above, the production costs of EQ 3 using Quad/COF Technology for the Measuring Period will be compared to the production costs of E using Quad/COF Technology during the E Measuring period and the performance immediately prior to the and immediately after the Measuring Period.

          (ii) As a possible additional data point for determination of the Quad Cost Savings (among other data points and procedures for determining Quad Cost Savings) and to facilitate the comparison of the Gemini String Ribbon Technology and Quad/COF Technology, EQ may elect to run Wafers produced using Gemini String Ribbon Technology through EQ 3. The parties agree to establish reasonable parameters for any such comparative testing, including adequate volumes and rates of production and other necessary parameters to ensure that the testing provides a fair assessment as to whether Wafers manufactured using the Quad/COF Technology result in higher or lower Cell and Panel manufacturing costs (including decreased yields) than Wafers manufactured using the Gemini String Ribbon Technology.

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          (iii) If (A) the comparison pursuant to Section 4.1(b)(i)(B)(i) indicates that the Quad/COF Technology in operation at EQ 3 is performing better (i.e., Quad/COF Technology production costs on a per Wp basis are lower in EQ 3 than in E’s facilities) or worse (i.e., Quad/COF Technology production costs on a per Wp basis are lower in E’s facilities than in EQ 3) than E using Quad/COF Technology during the E Measuring period, or (B) the comparison pursuant to Section 4.1(b)(i)(B)(ii) indicates that Wafers manufactured using the Quad/COF Technology result in higher or lower Cell and Panel manufacturing costs (including reduced yields) than Wafers manufactured using the Gemini String Ribbon Technology, then E and EQ shall take into consideration the disparity in the performance, possible causes of the disparity and the impact on the royalty rate to negotiate in good faith an adjustment to the Quad Royalty determined pursuant to Section 4.1(b)(i)(A).

     (ii) Adjustments to the Actual Quad Rate. The Actual Quad Rate is subject to the following adjustments only:

     (A) Comparison to E Production Costs. If at any time after the Quad Cost Savings is calculated E can reasonably document that the Quad/COF Technology implemented at EQ performs noticeably worse compared to Quad/COF Technology implemented at E, and the Actual Quad Cost realized at EQ is significantly higher 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 E (such performance at E, the “Potential Quad Cost”), E can request on one occasion that the Actual Quad Cost be set equal to the Potential Quad Cost. Thereafter, Quad Cost Savings and the Actual Quad Rate shall be based on the Actual Quad Cost as set to Potential Quad Cost.

     (B) [****]. When additional improvements to the Quad/COF Technology are introduced to EQ by E which are expected to primarily result in (A) [****] or (B) [****], they will be considered Quad Commercial Improvements when implemented at EQ, and the improvement in the Actual Quad Cost experienced by EQ as a result of the improvement to the Technology shall result in an increase in the Actual Quad Rate determined in accordance with the procedure described in this Section 4.1(b). The Declining Factor for the calculation of the Quad Royalty Rate shall not be affected by the introduction of such improvements to the Technology. Thus, for example, if advancements resulting in [****] are in use by EQ in the year after the First Production Year, the Declining Factor of [****] % shall apply to the entire Quad Royalty Rate, including the portion attributable to the Quad Cost Savings caused by [****].

     (C) Compared to Conventional Sliced Wafers. If the sum of (A) the actual production costs of EQ using Quad/COF Technology and (B) the Quad Royalty paid to E exceeds, in any given calendar year, the actual average production costs of REC or Q for conventional sliced Wafers, then the Actual Quad Rate can be reduced such that the sum of Actual Quad Costs and the Actual

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     Quad Rate are equal to the average production costs of conventional sliced Wafers of REC or Q, but the level of the Actual Quad Rate shall never go below zero. EQ can require an adjustment under this Section once every calendar year if it is supported either by REC or Q, but only if the supporting party then owns [****] % or more of the outstanding shares of EQ. The actual average production costs used to evaluate such request shall include the average production costs of each of REC in Norway or Q in Germany only if the applicable party owns [****] % 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 Q, as applicable, a statement of an independent auditor shall be presented showing the average productions costs evaluated by the auditor. The auditor must treat all information confidentially and not disclose any figures or other type of information to E except the evaluated result. In calculating the cost of manufacturing products made with conventional sliced Wafers as compared to the cost of manufacturing Wafers using String Ribbon Technology, the cost of key inputs including polysilicon, labor, et cetera used by the parties (parties using conventional silicon Wafer manufacturing processes, on the one hand, and E or EQ, as applicable, using String Ribbon Technology, on the other hand) shall be the same regardless of the actual cost of such inputs used by the respective manufacturers.

     (D) No Adjustment to EQ 2 Cost Base. The adjustments to the Actual Quad Rate set forth is Section 4.1(b)(ii)(A) (Comparison to E Production Costs) and Section 4.1(b)(ii)(B) [****] shall be determined following a recalculation of Actual Quad Costs. In no event will the EQ 2 Cost Base be recalculated after the Quad Cost Savings is initially determined.

     (vi) Adjustments Prospective Only. Any adjustments to the Actual Quad Rate shall apply on a going forward basis only (i.e., shall only apply to sales made after the adjustments), and all royalties paid under this Section 4.1 are non-refundable (except for the Quad Royalties payable pursuant to Section 4.1(a)(i) (Nominal Royalty Rate during Ramp-Up Period and First Year of Production) which are subject to possible repayment pursuant to Section 4.1(a)(iii) (True-Up Payment)).

     (vii) Failure to Agree on Actual Quad Rate. In the event that the parties do not agree on the Quad Royalty Rate to be determined in accordance with this Section 4.1, the Quad Royalty Rate shall be determined in accordance with Section 4.7 (Royalty Evaluation by Experts).

     Section 4.2 — Royalties for Quad Commercial Improvements

     (a) Quad Commercial Improvements developed by EQ that are first Licensable to E at any time during the Pre-Liquidity Event Licensing Period, or, if there is a Liquidity Event Failure, at any time during the Extended Licensing Period shall not require royalty payments from E to EQ.

     (B) Quad Commercial Improvements developed by (i) E that are first Licensed to EQ at any time during the Extended Licensing Period, or (ii) EQ that are first Licensed to E at any

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time during the Post-Liquidity Event Licensing Period, shall require royalty payments by the licensee to the licensor at a royalty rate which will be negotiated at arm’s length in line with similar licensing arrangements. The royalty rate for such Quad Commercial Improvements shall be initially set at [****] as documented and proposed by the licensor, compared to the then-actual production cost in Wafer, Cell and Panel production associated with the applicable Quad Commercial Improvement, subject to the Declining Factor. If the Parties cannot agree on the amount of the Cost Savings generated by the applicable Quad Commercial Improvement, the royalty rate shall be determined in accordance with Section 4.7 (Royalty Evaluation by Experts) based upon the factors mentioned above.

     Section 4.3 — Royalties for Additional SR Technology

     (a) Additional SR Technology developed by EQ that is first Licensable to E at any time during the Pre-Liquidity Event Licensing Period, or, if there is a Liquidity Event Failure, at any time during the Extended Licensing Period shall not require royalty payments from E to EQ.

     (b) Additional SR Technology developed by (i)(A) E that is first Licensable to EQ at any time during the Extended Licensing Period, or (ii) EQ that is first Licensable to E at any time during the Post-Liquidity Event Licensing Period, shall require royalty payments by the licensee to the licensor at a royalty rate determined pursuant to the following Sections 4.3(b)(i) through 4.3(b)(iii):

     (i) Additional SR Technology Previously Licensed to Third Parties. If a party (the “Licensor”) becomes obligated under Article 2 to license or offer to license Additional SR Technology to the other Party (the “Licensee”), and if the Licensor has previously granted a license for such Additional SR Technology to a Third Party under comparable conditions (e.g. in terms of production volume etc.), then the Licensee shall, to the extent legally permissible, have the right to license such Additional SR Technology on the same terms and conditions as have been granted to the Third Party. The Licensor shall promptly advise the Licensee of any such terms and conditions granted, and the Licensee may elect to have those terms and conditions automatically, or (with respect to royalty terms) to have the market rate determined pursuant to Section 4.3(b)(ii) below and be bound by such determination.

     (ii) Additional SR Technology Not Licensed to Third Parties. This Section 4.3(b)(ii) applies with respect to Additional SR Technology that the Licensor has not previously licensed to a Third Party under generally comparable conditions. The royalty fee to be determined under this Section shall be negotiated at arm’s length in line with rates of similar licensing arrangements. The royalty rate shall be initially set at [****] as documented and proposed by the Licensor, compared to the then-actual production cost in Wafer, Cell and Panel production associated with the applicable Additional SR Technology, subject to the Declining Factor. If the Parties cannot agree on the amount of the Cost Savings generated by applicable Additional SR Technology, they shall agree on an independent expert who shall determine the Cost Savings based upon the factors 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 4.7 (Royalty Evaluation by Experts). For the purposes of this Section 4.3(b), the

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royalty fee payable shall be the market rate for royalties or equivalent fees, including the rate and formula for calculating the actual royalty payable, based on the commercial market rate value of the relevant Intellectual Property Rights, with reference to the market royalty rates for comparable Intellectual Property Rights or Technologies.

     (iii) Subsequent Licenses of Additional SR Technology. If (A) the Licensor has not granted a license for a particular Additional SR Technology to any Third Party at the time of the offer to the Licensee but grants a license for such Additional SR Technology to any Third Party afterwards within the Post-Liquidity Event Licensing Period or [****] Post-Termination Licensing Period, as applicable, and (B) such license to a Third Party is on terms generally more favorable than the terms of the license wit the Licensee, Licensor shall promptly advise the Licensee of the terms and conditions of the Third Party license and offer to amend the Licensee’s license of such Additional SR Technology to conform to the terms and conditions of the Third Party license. The License shall have [****] in which to elect such terms and conditions, which if accepted shall apply as of the effective date of the Licensee’s acceptance. This amendment shall be on a prospective basis only and in no case will any paid royalties be refunded provided that the Licensor promptly informs the Licensee about the terms and conditions of the Third Party license promptly.

     Section 4.4 — Royalties on Sales by Sublicensees

     (a) EQ Sublicensing. If EQ sublicenses (to the extent such sublicensing is permitted by this Agreement) any Improved Quad/COF Technology or Additional SR Technology developed by E to an entity that is a Qualified Affiliate, then for as long as such entity remains a Qualified Affiliate, EQ will pay E royalties from such sublicensing (or stipulate that sublicensees pay such royalties directly to E) based on the same terms as if the volume manufactured and sold by the Qualified Affiliate had been manufactured and sold by EQ, and the amount of the royalties or other consideration received by EQ from its Qualified Affiliate shall not affect the royalty payment made by EQ to E. If an EQ sublicensee ceases to remain a Qualified Affiliates during the [****] of the applicable sublicense period, the sublicense will terminate, provided that EQ may request a waiver of the termination which E will have sole discretion to grant or deny; provided that if the Qualified Affiliate ceases to remain a Qualified Affiliate as a result of circumstances outside the reasonable control of EQ, a waiver of the Qualified Affiliate requirements shall not be unreasonably withheld. If the sublicensee ceases to be a Qualified Affiliate after the [****] of the sublicense period, 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 Improved Quad/COF Technology shall be paid to E; provided that in no event shall the royalty paid to E for sublicensed Improved Quad/COF Technology (with or without any Quad Commercial Improvements thereto) be less than the royalty that would have been payable to E by EQ if the same volume of product manufactured and sold by the sublicensee had been manufactured and sold by EQ.

     (b) E Sublicensing. If E sublicenses (to the extent sublicensing is permitted by this Agreement) any Applicable Commercial Improvement owned by EQ to a third party (including Affiliates), E will pay EQ royalties from such sublicensing (or stipulate that sublicensees pay such royalties directly to EQ) based on the same terms as if the volume manufactured and sold

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by the sublicensee had been manufactured and sold by E. The amount of the royalties or other consideration received by E from its sublicensees for such Applicable Commercial Improvement and any other Applicable Commercial Improvement or the Quad/COF Technology shall not affect the royalty payment made by E to EQ for such sublicenses.

     Section 4.5 — Royalties on Technology Post-Termination

     Each Party shall continue to be responsible for royalties called for in this Agreement for Quad/COF Technology and Additional Commercial Improvements licensed herein and used for the production of the Licensed Products after the Termination Date and the Extended Licensing Period, subject to the terms and conditions of this Agreement, including the operation of the Declining Factor if applicable.

     Section 4.6 — Royalties on External Intellectual Property Rights

     If Either Party offers to license an Applicable Commercial Improvement to the other Party under this Agreement, and the offered Applicable Commercial Improvement carries an external running cost to the offering party (e.g., a license fee/royalty payable to a Third Party holder of such Applicable Commercial Improvement), then the cost incurred by the offering Party in connection with sub-licensing to the offeree Party shall be borne in its entirety by the offeree Party; provided that the written agreement between the Parties for the licensing of such Intellectual Property Rights expressly includes the amount of such running cost. The aforementioned shall not reduce a Party’s rights to royalty under the rules above.

     Section 4.7 — Royalty Evaluation by Experts

     If the Parties cannot agree on a royalty rate or Cost Savings for any Applicable Commercial Improvement pursuant to Section 4.2 (Royalties for Quad Commercial Improvements) or Section 4.3 (Royalties for Additional SR Technology) this Agreement whereby a royalty rate or Cost Savings is to be determined by negotiation between the parties, or if the Parties cannot agree as to the Actual Quad Rate or Quad Cost Savings to be determined pursuant Section 4.1 (Quad/COF Technology Royalties) within [****] after initiation or commencement of negotiations to determine such royalty or value, then the following applies:

     (a) Each Party shall retain at its expense an independent professional Third Party expert with expertise evaluating license agreements in the photovoltaic industry.

     (b) Subject to execution of customary confidentiality agreements by the independent experts, EQ and E shall provide or cause to be provided to each expert all material information, including any material changes in such information, reasonably necessary to make the determination or reasonably requested by the experts.

     (c) Within [****] after the [****] period referenced above, each Party shall submit a final proposal for the relevant royalty rate. Cost Savings or Quad Cost Savings for the applicable licensed Technology with a supporting analysis prepared in writing by its retained expert, to the other Party and to the “Arbitrator.” The Arbitrator (or each Arbitrator, if three (3) Arbitrators are required pursuant to the next sentence) shall be a person with expertise in evaluating license agreements in the photovoltaic industry, shall not have a material business relationship with

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either Party or any of the EQ Founders and shall be reasonably acceptable to both Parties. If the Parties cannot agree on an Arbitrator within [****] after the [****] period referenced above, each Party will each select separate Arbitrators (within the stated [****] period) satisfying the above criteria and the selected two Arbitrators will select a third Arbitrator. In that case, the decision of a majority of the Arbitrators will control and shall be final and binding on both Parties.

     (d) If one Party does not submit in a timely manner a final proposal, then the proposal of the other Party shall be used to establish the relevant royalty rate, Cost Savings or Quad Cost Savings for the applicable Technology.

     Section 4.8 — Miscellaneous Payment Terms

     (a) Reports. To the extent applicable, each Party shall, within [****] after the end of each calendar quarter during the term of this Agreement, prepare a report summarizing the royalty payable to the other Party pursuant to Article 4 (Consideration and Payment) including a description and basis of the calculation thereof. Each Party shall provide copies of such report to the other Party, and the applicable royalty payment shall accompany such report.

     (b) Method. All payments to be made hereunder shall be made in Euros by wire transfer to such bank account as the applicable party may designate.

     (c) Interest. Each Party shall pay the other Party interest on any payments that are not paid on or before the date such payments are due under this Agreement at a rate of [****] accruing and compounding monthly, or the maximum applicable legal rate, if less, calculated on the total number of days payment is delinquent [****].

     (d) Currency. All payments hereunder resulting from production of Licensed Products in countries that have adopted the Euro shall be made in Euros. The appropriate currency for payments resulting from production of Licensed Products in other jurisdictions shall be agreed upon from time to time as needed.

     (e) Setoff. Each Party shall have the right to setoff any Royalties or other amounts due to the other Party hereunder against amounts owed it by the other Party under the Agreement.

     Section 4.9 — Taxes

     (a) Taxes Payable by EQ. With respect to royalties payable by EQ to E under this Agreement, EQ shall promptly notify E of any requirement under applicable law to deduct or withhold an amount on behalf of E on account of any tax and, if so required under applicable law, EQ shall: (i) withhold and pay to the relevant authorities the full amount required to be deducted or withheld promptly upon determination by EQ that such deduction or withholding is required; and (ii) promptly forward to E an official receipt (or certified copy), or other documentation reasonably acceptable to E, evidencing such withholding and payment to such authorities. To the extent that E cannot or will not be able to take a full credit against its tax liability for the current or prior taxable years for the full amount of the withholding tax deducted or withheld by EQ and is otherwise unable to reduce or eliminate such withholding tax liability

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on its own, then the Parties shall cooperate with each other and use all reasonable efforts to reduce or eliminate such tax liability in a lawful and appropriate manner to the extent such does not result in additional liability to EQ.

     (b) Taxes Payable by E. With respect to royalties payable by E to EQ under this Agreement, E shall promptly notify EQ of any requirement under applicable law to deduct or withhold an amount on behalf of EQ on account of any tax and, if so required under applicable law, E shall: (i) withhold and pay to the relevant authorities the full amount required to be deducted or withheld promptly upon determination by E that such deduction or withholding is required; and (ii) promptly forward to EQ an official receipt (or certified copy), or other documentation reasonably acceptable to EQ, evidencing such withholding and payment to such authorities. To the extent that EQ cannot or will not be able to take a full credit against its tax liability for the current or prior taxable years for the full amount of the withholding tax deducted or withheld by E and is otherwise unable to reduce or eliminate such withholding tax liability on its own, then the Parties shall cooperate with each other and use all reasonable efforts to reduce or eliminate such tax liability in a lawful and appropriate manner to the extent such does not result in additional liability to E.

     Section 4.10 — Audit

     Each Party shall maintain complete and accurate accounting records, in accordance with sound accounting practices, to support and document the royalties or payments payable in connection with this Agreement, including complete and accurate accounting records or access with respect to such records which each party shall require be maintained by applicable Third Parties sublicensees. Such records shall be retained by each Party or the applicable Third Party sublicensees for a period of at least [****] after the royalties which relate to such records have been accrued and paid. Each Party shall, upon written request from the other, provide access to such records to such Party for the purposes of audit. If any such audit discloses a shortfall in payment (or an overcharge, as the case may be) of more than [****] % for any quarter, the audited Party agrees to pay or reimburse the other Party for the expenses of such audit, and the Parties shall reconcile payments in accordance with the results of the audit.

ARTICLE 5
INTELLECTUAL PROPERTY RIGHTS

     Section 5.1 — Ownership

     (a) Joint Inventions. Although E and EQ have no intention as of the Signing Date of jointly creating any Commercial Improvements, E and EQ agree that, unless otherwise agreed in writing in connection with any joint development efforts, E and EQ shall Jointly Own all right, title and interest in any Commercial Improvements that personnel of E and EQ (including third parties working on each Party’s behalf) jointly create (“Jointly Owned Commercial Improvements”). Notwithstanding this section 5.1, the parties may agree individual terms of joint development of Commercial Improvements, including allocations of their respective responsibilities to the development process, collective development cost budget(s), their respective cost shares and milestones for completion of defined development stages or tasks. If

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the Parties undertake any joint development efforts pursuant to a written agreement, unless otherwise agreed, the parties will share the aggregate (agreed) development costs on a 50/50 basis, and each Party will exchange (subject to confidentiality constraints in this Agreement) all Confidential Information relative to performance of their respective tasks in the development process, as required to achieve full development to enable commercial use of the relevant Jointly Owned Commercial Improvement(s).

     (i) Definition. For purposes of this Section 5.1 (Ownership), “Jointly Own” means that, subject to the terms of the licenses granted and other provisions of this Agreement, each Party or owner thereof is free to exploit such rights and, subject to Section 5.2 (Enforcement of Jointly Owned Commercial Improvements), authorize others to do so, with no obligation to account to the other Party or owner, for profits or otherwise, and each Party hereby waives any right it may have under the laws of any country to require such consent or accounting. In the event that either or both Parties are pursuing enforcement pursuant to Section 5.2 (Enforcement of Jointly Owned Commercial Improvements), any licensing of the respective Jointly Owned Commercial Improvements to the alleged third party infringer shall be pursued (with the intent that the actual or alleged infringement is regularized by appropriate license terms) by the Party or Parties pursuing the action until the conclusion of the respective action.

     (ii) Prosecution and Maintenance. Subject to Section 5.1(c) (Expenses and Assistance), except as otherwise agreed, E and EQ shall have the initial joint right to control the filing for, prosecution and maintenance of any Applicable Commercial Improvements that claim or disclose Jointly Owned Commercial Improvements pursuant to Section 5.1(a) (Joint Inventions) and each shall consult with and keep the other reasonably informed on matters regarding such filing, prosecution and maintenance. In such case, subject to Section 5.1(c) (Expenses and Assistance), each shall (subject to exceptions in this Section 5.1 (a)) take actions reasonably required to assist the other Party, and share costs incurred, to file for, prosecute and/or maintain the Jointly-Owned Commercial Improvements. For purposes of this Section 5.1(a) (Joint Inventions), “prosecution and maintenance” of Intellectual Property Rights shall be deemed to include, without limitation, responding to office actions, payment of maintenance and annuity fees, and conduct of interferences or oppositions, and/or requests for re examinations, reissues or extensions of patent terms.

     (iii) Prosecution and Maintenance By EQ. To the extent that a Party (A) elects not to file, prosecute or maintain any Applicable Commercial Improvement jointly owned by EQ and E, or pay any fee related thereto, the other Party (B) EQ shall have the right, at its option, to control the filing, prosecution and/or maintenance of any such Applicable Commercial Improvement, provided that B shall consult with and keep A reasonably informed of matters regarding such filing, prosecution and maintenance.

     (b) Sole Inventions. Each Party shall own all right, title and interest in all Intellectual Property Rights regarding the Improved Quad/COF Technology, Additional String Ribbon Technology or otherwise invented or authored solely by such Party’s personnel (including third parties working on such Party’s behalf). For purposes of clarification, E retains ownership of Quad/COF Technology developed as of the Signing Date or otherwise developed without

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assistance from EQ. Each Party shall have sole right, at its option, to control the filing for, prosecution and maintenance of any Intellectual Property Rights that claim or disclose inventions that the Party solely owns, subject to Sections 5(b)(i) and 5(b)(ii) below.

     (i) Prosecution and Maintenance of E Technology. To the extent that E elects not to file, prosecute or maintain any E Intellectual Property Right relating to the Improved Quad/COF Technology licensed to EQ under this Agreement, or pay any fee related thereto, E shall notify EQ, and EQ shall have the right, at its option, to control the filing, prosecution and/or maintenance of any such Intellectual Property Right, and E, at EQ’s written request, shall transfer and assign all of its right, title and interest to such E Intellectual Property Right to EQ. In the event of such transfer, E shall retain a world-wide, non-exclusive, fully transferable, perpetual, irrevocable, royalty-free, fully sublicensable license of such transferred Intellectual Property Rights which were originally solely owned by E.

     (ii) Prosecution and Maintenance of EQ Technology. To the extent that EQ elects not to file, prosecute or maintain any EQ Intellectual Property Right relating to Applicable Commercial Improvements licensed to E under this Agreement, EQ shall notify E, and E shall have the right to control the filing, prosecution and/or maintenance of any such EQ Intellectual Property Right, and EQ, at E’s written request, shall transfer and assign all right its right, title and interest to such Intellectual Property Right to E. In the event of such transfer, EQ shall retain a world-wide, fully transferable, non-exclusive, perpetual, irrevocable, royalty-free, fully sublicensable license of such transferred Intellectual Property Rights which were originally solely owned by EQ.

     (c) Expenses and Assistance. To the extent a Party controls the foregoing filing, prosecution and maintenance activities relating to any Jointly Owned Commercial Improvements (or, pursuant to Section 5.1 (Ownership), any other Party’s Intellectual Property Right or Applicable Commercial Improvements licensed to the other Party), such controlling entity shall be responsible for all costs and expenses incurred in connection therewith. In such cases, subject to the foregoing, each Party shall reasonably assist the other Party, as the other Party may reasonably request, in such Party’s efforts to file for, prosecute and/or maintain the Intellectual Property Right or Applicable Commercial Improvements.

     (d) EQ Employee Inventors. EQ shall take all necessary measures to secure all right, title and interest in inventions that are made by its employees under the regulations of the German Employee Inventor Law (Arbeitnehmererfindergesetz) to the maximum extent available under applicable law such that EQ may carry out its obligations of this Article 5 (Intellectual Property Rights) and the Parties may obtain and exercise their rights to the applicable Intellectual Property Rights to the full extent and term available under applicable law. In connection therewith, EQ will comply with all applicable laws including without limitation any obligations to employees under applicable law with respect to employee inventions.

     Section 5.2 — Enforcement of Jointly Owned Commercial Improvements

     (a) Notice of Infringement. Each Party shall promptly notify the other Party if it becomes aware of a possible infringement by a third party of any Jointly Created Commercial

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Improvements. If either Party desires to take any action against such an infringing or misappropriating third party, such Party shall first notify the other Party hereto and consult with such notified Party regarding such action.

     (b) Participation; Management of Actions and Cooperation. If a Party notified pursuant to this Section 5.2 desires to participate in an action against a third party, the Parties shall then jointly and cooperatively pursue such action, in which event they shall bear all costs equally and share in any damages, royalties, license fees or other recoveries equally, provided that either Party may at any time decide not to participate further in such action, in which case any further costs shall be borne by and all damages, royalties, license fees and other recoveries shall be received by the Party which continues to pursue such action. If a Party declines to participate in such action, the other Party shall then have the right to pursue such action alone, and shall bear all costs of and receive all damages, royalties, license fees and other recoveries from such action. Notwithstanding the foregoing, if a Party declines to participate in such an action or withdraws from such an action, such Party shall nevertheless, at the request of the other Party, cooperate with the other Party, at the cost of the other Party and subject to any reasonable conditions (including indemnification against counterclaims by the third party), to the extent which may be necessary to enable the other Party to pursue such action effectively, including without limitation joining such action as an indispensable party.

     (c) Withdrawal. If either Party brings an action or proceeding governed by this Section 5.2 and subsequently ceases to pursue or withdraws from such action or proceeding, it shall promptly notify the other Party and the other Party may substitute itself for the withdrawing Party under the terms of this Section 5.2.

     (d) Recovery Allocation. In the event that either Party exercises the rights conferred in this Section 5.2 and recovers any damages or other sums in such action or proceeding or in settlement thereof, such damages or other sums recovered shall first be applied to all out-of-pocket costs and expenses incurred by the Parties in connection therewith (including attorneys’ fees), unless not reimbursable hereunder. If such recovery is insufficient to cover all such costs and expenses of both Parties, the controlling Party’s costs shall be paid in full first before any of the other Party’s costs. If after such reimbursement any funds shall remain from such damages or other sums recovered, such funds shall be retained by the Party that controlled the action or proceeding under this Section 5.2.

     Section 5.3 — Third Party Licenses

     To the extent that EQ or E may desire or need rights with respect to any Intellectual Property Rights not licensed hereunder, EQ or E, as applicable, shall be solely responsible for obtaining such licenses and paying the associated costs.

     Section 5.4 — Patent Marking

     Any Licensed Products that are made, used, offered for sale, sold or otherwise disposed shall include appropriate marking, which Patent marking shall be in affixed conspicuously on the Licensed Products and otherwise in accordance with the reasonable requirements of the licensor (which must be in conformity with the customs and practices of the applicable jurisdiction and

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the practices applied by the Party licensing the Technology subject to the applicable Patent) and the appropriate patent marking laws of the country in which such products are made, sold or otherwise disposed of so as to provide potential infringers with appropriate notice of the applicable Patent. Similar marking for Patents shall also be printed on any packaging in which the Licensed Products are contained and in the Documentation for such Licensed Products in accordance with the patent marking laws and customs of the relevant jurisdictions. E and EQ will reasonably cooperate to coordinate Patent marking activities for the Licensed Products, including the periodic sharing of lists of countries in which the Parties intend to use, sell, offer for sale or otherwise dispose of the Licensed Products which incorporate Technology that is subject to Patent or Patents owned or controlled by the other Party, and, with respect to each such country, a list of the applicable Patents issued and pending in such countries, and a specimen of the patent marking that is appropriate for use in that jurisdiction.

     Section 5.5 — Trademarks Licenses and Licensed Product Labeling

     EQ agrees that in exchange for non-exclusive rights to use E’s “String Ribbon” trademark, EQ shall only use the String Ribbon trademark in connection with the promotion of products manufactured using the String Ribbon Technology and in accordance with additional guidelines to be established by E for adherence by both E and EQ in their respective use of the trademark (which guidelines shall be subject to the approval of EQ which approval shall not be unreasonably withheld), and that in connection with any use of the trademark EQ agrees to include the following statement (or something substantially similar):

STRING RIBBON is a [registered] trademark of Evergreen Solar, Inc. Evergreen Solar’s solar wafer manufacturing technology is used by EQ under license in the manufacture of EQ’s String Ribbon products.

     The license of the String Ribbon trademark will become effective upon the completion of a mutually agreeable trademark license agreement which shall be negotiated by the parties after the Signing Date.

     Section 5.6 — Further Cooperation

     Each of the Parties hereto agrees, upon the reasonable request of the other Party, to the extent consistent with this Article 5 of the Agreement, to deliver to the other such records, data or other documents reasonably requested by the other, and to take or cause to be taken all such other actions as are reasonably necessary or desirable in order to permit the other to obtain the full benefits of this Agreement (including the execution of any documents reasonably required in connection therewith).

     Section 5.7 — Additional Registered Intellectual Property Rights

     (a) E IP. E will disclose to EQ semi-annually during the Pre-Liquidity Event Licensing Period and the Extended Licensing Period, additional Registered E Intellectual Property Rights to protect the Quad/COF Technology and any Applicable Commercial Improvement are applied for or obtained.

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     (b) EQ IP. EQ will disclose to E semi-annually during the Pre-Liquidity Event Licensing Period and (with respect to Applicable Commercial Improvements licensed by EQ during the Extended Licensing Period) the Extended Licensing Period, any Registered EQ Intellectual Property Rights Registered issued and applied for to protect the Quad/COF Technology or any Applicable Commercial Improvement.

ARTICLE 6
WARRANTIES

     Section 6.1 — Representations and Warranties

     (a) E hereby represents and warrants to EQ that:

     (i) Registered E Intellectual Property. E has provided EQ with a complete and accurate list of all Registered E Intellectual Property Rights issued and applied for worldwide to protect the Quad/COF Technology and any Applicable Commercial Improvement as of the Signing Date.

     (ii) Completeness. The E IP constitutes all of the Intellectual Property owned or Licensable by E that is reasonably necessary for the conduct and operation of the Quad/COF Technology for the manufacture of Wafers for use in the Licensed Products as presently configured.

     (iii) Non-Infringement. To the knowledge of E, EQ’s use of the E IP pursuant to this Agreement in the operation of the Quad/COF Technology and any Applicable Commercial Improvements as it is contemplated to be conducted following the Effective Date, including but not limited to the use of the Quad/COF Technology and any Applicable Commercial Improvements to manufacture Wafers for use in the Licensed Products as presently configured and including use in the design, development, manufacture, use, marketing and sale of the Licensed Products as presently configured does not, and will not, infringe or misappropriate any Intellectual Property Rights of any Third Party, violate any right of any Third Party (including any right to privacy or publicity), or constitute unfair competition or trade practices under the laws of any jurisdiction. Without limiting the foregoing, E has not received notice from any Person claiming that such operation or any act, product, Intellectual Property Rights, Technology or service by E (including products, Intellectual Property Rights, Technology or services currently under development) infringes or misappropriates any Intellectual Property rights of any Person, violates any right of any Person or constitutes unfair competition or trade practices under the laws of any jurisdiction (nor does E have knowledge of any basis therefor). To the knowledge of E, no Person is infringing or misappropriating any E IP.

     (iv) Contracts. There are no contracts, licenses and agreements under which E has been granted any rights, including Intellectual Property Rights or other rights to Technology from Third Parties, that constitute E IP licensed hereunder.

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     (b) EQ hereby represents and warrants to E that:

     (i) Registered EQ Intellectual Property. There are no Registered EQ Intellectual Property Rights issued and applied for to protect to the Quad/COF Technology or any Applicable Commercial Improvement as of the Signing Date.

     (ii) Non-Infringement. To the knowledge of EQ, E’s use of the EQ IP (but not to the extent infringement arises solely by reason of Quad/COF Technology or Applicable Commercial Improvements provided or made by E or on its behalf, on which the Quad/COF Technology or Applicable Commercial Improvements were based) pursuant to this Agreement in the operation the Quad/COF Technology and any Applicable Commercial Improvements as it is contemplated to be conducted following the Effective Date, including but not limited to the use of any Applicable Commercial Improvements to manufacture Wafers for use in the Licensed Products does not, and will not, infringe or misappropriate any Intellectual Property Rights of any Third Party, violate any right of any Third Party (including any right to privacy or publicity), or constitute unfair competition or trade practices under the laws of any jurisdiction. Without limiting the foregoing, EQ has not received notice from any Person claiming that such operation or any act, product, Intellectual Property Rights, Technology or service by EQ (including products, Intellectual Property Rights, Technology or services currently under development) infringes or misappropriates any Intellectual Property rights of any Person, violates any right of any Person or constitutes unfair competition or trade practices under the laws of any jurisdiction (nor does EQ have knowledge of any basis therefor). To the knowledge of EQ, no Person is infringing or misappropriating any EQ IP. Provided that if any person claims that any E IP infringes third party Intellectual Property Rights, E will indemnify and hold EQ harmless, on demand, against all proceedings, losses, liabilities, damages and costs (including legal costs) incurred to address, defend or resolve such claim, and any amounts paid in this regard will be excluded from calculations as to whether any maximum liability amount has been reached notwithstanding this or any other agreement. Additionally, EQ’s royalty payment obligations are reduced to the extent of any ongoing loss, liabilities, cost or damage suffered by EQ (including license fees paid or payable to the relevant third parties) for continued use of the relevant Intellectual Property Rights.

     (iii) Contracts. There are no contracts, licenses and agreements under which EQ has been granted any rights, including Intellectual Property Rights or other rights to Technology from Third Parties, that are Licensable and constitute EQ IP licensed hereunder.

     Section 6.2 — Remedies for Breaches of Warranties

     Each Party’s sole obligation and liability for its breach of the representations and warranties (the “Warranties”) provided in this Article 6 (Warranties) shall be pursuant as set forth in this Section 6.2.

     (a) Liability. In the event of a breach of any Warranty by E or EQ, as the case may be (the “Indemnifying Party”), in Section 6.1 (Representations and Warranties), the other Party

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(the “Indemnified Party”) shall have the right to be indemnified and held harmless against any and all third party claims, suits, losses, and liabilities or portions thereof and the associated costs and expenses, including attorneys’ fees, to the extent awarded by an arbitrator, a court of competent jurisdiction or payable pursuant to a settlement (subject to the reasonable approval of the Indemnifying Party), to the extent caused by a breach by the Indemnifying Party of a Warranty.

     (b) Limitations of Liability for Breach of Warranties.

     (i) Each Indemnifying Party shall (in all cases) only be liable for breach of Warranties to an Indemnified Party in respect of a claim if the aggregate amount of all claims for which the relevant Indemnifying Party would otherwise be liable under this Agreement to the relevant Indemnified Party exceeds € [****] (in which case, however, the relevant Indemnified Party shall be entitled to claim the total amount of such claims and not merely the excess above € [****]).

     (ii) In no event will an Indemnifying Party’s liability for any claim or claims for a breach or breaches of Warranties, in the aggregate, exceed the amount of € [****];

     (iii) All claims for breach of Warranties are limited in time one year after the Termination Date.

     (iv) The limitations on liability set forth in this Section 6.2(b) (Limitations of Liability for Breaches of Warranty) shall not apply to the extent they are not permitted by the German Civil Code (BGB) in cases of liability for intention and strict liability.

     Section 6.3 — Disclaimer

     EXCEPT FOR THE WARRANTIES SET FORTH IN THIS ARTICLE 6 (WARRANTIES), THE PARTIES MAKE NO WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AND SPECIFICALLY DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT AND TITLE. NEITHER PARTY MAKES ANY GUARANTEES TO THE OTHER CONCERNING THE SUCCESS OR POTENTIAL SUCCESS OR COMMERCIAL VIABILITY OF THE ACTIVITIES CONTEMPLATED UNDER THIS AGREEMENT.

ARTICLE 7
CONFIDENTIAL INFORMATION

     Section 7.1 — Definition

     “Confidential Information” means any information: (i) disclosed by one Party (the “Disclosing Party”) to any other Party (the “Receiving Party”), which, if in written, graphic, machine-readable or other tangible form is marked as “Confidential” or “Proprietary”, or which, if disclosed orally or by demonstration, is identified at the time of initial disclosure as

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confidential and reduced to writing and marked “Confidential” within [****] of such disclosure; or (ii) which is otherwise referred to as Confidential Information under this Agreement or any License Agreement. Notwithstanding the foregoing, Confidential Information shall exclude information that: (i) was independently developed by the Receiving Party without using any of the Disclosing Party’s Confidential Information; (ii) becomes known to the Receiving Party, without restriction, from a source other than the Disclosing Party that had a right to disclose it; (iii) was in the public domain at the time it was disclosed or becomes in the public domain through no act or omission of the Receiving Party; or (iv) was rightfully known to the Receiving Party, without restriction, at the time of disclosure.

     Section 7.2 — Confidentiality Obligation

     The Receiving Party shall treat as confidential all of the Disclosing Party’s Confidential Information and shall not use such Confidential Information except as expressly permitted under this Agreement or a License Agreement or in connection with EQ’s or E’s activities. Without limiting the foregoing, the Receiving Party shall use at least the same degree of care that it uses to prevent the disclosure of its own confidential information of like importance, but in no event with less than reasonable care, to prevent the disclosure of the Disclosing Party’s Confidential Information, subject to Section 7.3 (Legal Disclosure).

     Section 7.3 — Legal Disclosure

     Notwithstanding anything herein to the contrary, a Receiving Party has the right to disclose Confidential Information without the prior written consent of the Disclosing Party: (a) as required by any court or other governmental authority, or by any stock exchange the shares of any Party are listed on; (b) as otherwise required by law, or (c) as advisable or required in connection with any government or regulatory filings, including without limitation, filings with any regulating authorities covering the relevant financial markets. If a Receiving Party believes that it will be compelled by a court or other authority to disclose Confidential Information of the Disclosing Party, it shall give the Disclosing Party prompt written notice so that the Disclosing Party may take steps to oppose such disclosure.

     Section 7.4 — General Knowledge

     The Receiving Party shall have no obligation to limit or restrict the assignment of its employees or consultants as a result of their having had access to the Disclosing Party’s Confidential Information. The restrictions regarding Confidential Information shall not be construed to limit any Party’s right to independently develop or acquire products, processes or concepts without use of the Disclosing Party’s Confidential Information, even if similar. Furthermore, notwithstanding the restrictions regarding Confidential Information, the Receiving Party shall be free to use for any purpose the General Knowledge resulting from access to work with or exposure to the Disclosing Party’s Confidential Information, provided that the Receiving Party shall maintain the confidentiality of the Confidential Information as provided herein. The term “General Knowledge” means information in non-tangible form which may be retained by persons who have had access to Disclosing Party’s Confidential Information and may be reduced to a tangible form, including ideas, concepts, know-how or techniques contained therein., to the extent that such information is not Confidential Information; provided that, notwithstanding

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anything to the contrary, each Party may use and distribute any such confidential or proprietary information as reasonably required to exercise its rights under the licenses granted pursuant to Article 2 (Rights and Licenses).

ARTICLE 8
TERM

     Section 8.1 — Term

     This Agreement is effective as of the Effective Date. The licenses set forth in Section 2.1 (E License Grant to EQ) and Section 2.2 (EQ License Grant to E) became effective as of the Effective Date or at the time otherwise set forth in this Agreement. This Agreement may be terminated in the event that E and EQ mutually agree in writing to terminate this Agreement.

     Section 8.2 — Special Termination Right

     E shall have a special right to terminate this Agreement if [****]. Such termination shall be effective following a [****] written notice to EQ, and shall not affect the right of either Party to continue to use the Intellectual Property Rights licensed from the other Party under this Agreement, nor either Party’s obligation to continue to pay royalties to the other Party for such Intellectual Property Rights.

     Section 8.3 — Effect of Termination

     Upon any termination or expiration of this Agreement, all licenses hereunder shall continue as provided in this Agreement, unless otherwise expressly agreed in writing by E and EQ. Article 1 (Definitions), Article 2 (Rights and Licenses), Article 4 (Consideration and Payment), Section 5.1 (Ownership), 7 (Confidential Information), Section 8.3 (Effect of Termination) and Article 9 (Rights in Bankruptcy) and Article 10 (General Provisions) shall survive any termination or expiration of this Agreement. Article 6 (Warranties) shall survive any termination or expiration of this Agreement as required pursuant to Section 6.2(b)(iii).

ARTICLE 9
RIGHTS IN BANKRUPTCY

E acknowledges and agrees that the licenses and rights granted in this Agreement by E to EQ are licenses and rights to “intellectual property” within the definition of Section 101(35A) of the U.S. Bankruptcy Code. The Parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against E under the U.S. Bankruptcy Code, EQ shall be entitled, at its option, to retain all its rights under this Agreement, including without limitation, the licenses granted under Section 2, pursuant to U.S. Bankruptcy Code Section 365(n). Rejection pursuant to Section 365(n) of the U.S. Bankruptcy Code constitutes a material breach of the contract and entitles the aggrieved party to terminate upon written notice.

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ARTICLE 10
GENERAL PROVISIONS

     Section 10.1 — Limitation of Liability

     EXCEPT FOR ANY LIABILITY ARISING FROM (i) INDEMNIFICATION OBLIGATIONS SET FORTH IN ARTICLE 6, (ii) A BREACH BY A PARTY OF ITS CONFIDENTIALITY OBLIGATIONS UNDER ARTICLE 7, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR (A) ANY SPECIAL, INCIDENTAL, INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES (INCLUDING ANY DAMAGES RESULTING FROM LOSS OF USE, LOSS OF DATA, LOSS OF PROFITS OR LOSS OF BUSINESS) ARISING IN ANY WAY UNDER THIS AGREEMENT AND UNDER ANY THEORY OF LIABILITY (INCLUDING BREACH OF CONTRACT, STRICT LIABILITY, NEGLIGENCE, OR OTHER TORT), EVEN IF SUCH PARTY IS INFORMED IN ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES, OR (B) ANY CUMULATIVE LIABILITY TO THE OTHER PARTY ARISING IN CONTRACT, TORT (INCLUDING NEGLIGENCE) OR BREACH OF STATUTORY DUTY, OR OTHERWISE, FOR ANY LOSS OR DAMAGES RESULTING FROM ANY CLAIMS, DEMANDS, OR ACTIONS ARISING OUT OF OR RELATING TO THIS AGREEMENT, IN EXCESS OF [****].

     TO THE EXTENT REQUIRED BY APPLICABLE LAW, NOTHING IN THIS SECTION 10.1 (LIMITATION OF LIABILITY) SHALL LIMIT THE REMEDIES THAT MAY BE AVAILABLE TO THE PARTIES FOR FRAUD OR WILLFUL OR WANTON MISCONDUCT. IN ADDITION, THE LIMITATIONS ON LIABILITY SET FORTH IN THIS SECTION 10.1 (LIMITATION OF LIABILITY) SHALL NOT APPLY TO THE EXTENT THEY ARE NOT PERMITTED BY THE GERMAN CIVIL CODE (BGB) IN CASES OF LIABILITY FOR INTENTION AND STRICT LIABILITY.

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     Section 10.2 — Notices

     All notices, requests and other communications to any Party hereunder shall be in writing (including facsimile transmission) and shall be deemed to have been duly given if (a) delivered personally, (b) sent by next-day mail or overnight mail or delivery or (c) sent by facsimile, as follows:

As to EQ:	EverQ GmbH
	OT Thalheim
	Sonnenallee 14-24
	06766 Bitterfeld-Wolfen
	Germany
Attention:	Ted Scheidegger
	Hans-Jörg Axmann
	Katja Raschke
As to E:	Evergreen Solar, Inc.
	138 Bartlett Street
	Marlboro, MA 01752, USA
Attention:	Richard M. Feldt, President and CEO
	Michael El-Hillow, Chief Financial Officer
	Christian M. Ehrbar, General Counsel

or, in each case, at such other address as may be specified in writing to the other Parties hereto.

     Section 10.3 — Language

     All documentation, communication and services in connection with this Agreement in shall be in English.

     Section 10.4 — Amendments and Waivers

     Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each Party to this Agreement, or in the case of a waiver, by the Party against whom the waiver is to be effective. The same applies to any waiver of this written form requirement.

     No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any or other further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

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     Section 10.5 — Assignment

     Other than as expressly otherwise provided herein, this Agreement shall not be assignable or otherwise transferable by any Party hereto without the prior written consent of the other Party hereto; provided, however, that neither Party shall be obligated to obtain the consent of the other Party or other parties under this Section 10.5 (Assignment) in the event of an acquisition of such entity by another person by means of any transaction or series of related transactions (including, without limitation, any share acquisition, sale of all or substantially all of the assets, reorganization, merger or consolidation), and such Party shall have the right to assign this Agreement, in its entirety including all rights and obligations, to such Party’s successor in such acquisition. Subject to the foregoing, the provisions of this Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns. Any assignment or transfer (including through a change of control) of this Agreement in violation of this Section 10.5 (Assignment) shall be null and void.

     Section 10.6 — MOU; LTTA; Entire Agreement; Severability

     This Agreement supersedes and replaces Section F of the MOU with respect to Quad/COF Technology and any provisions of the LTTA that would otherwise be applicable to the Quad/COF Technology. This Agreement constitutes the entire agreement between the Parties hereto and any of such Parties’ respective affiliates with respect to the subject matter of this Agreement and supersedes all prior communications, agreements and understandings, both oral and written, with respect to the subject matter of this Agreement. For clarification, except as superseded hereby, the LTTA (as modified by the MOU) shall otherwise continue in effect and govern the license of Gemini String Ribbon Technology (including royalties payable therefor), improvements to the Gemini String Ribbon Technology and other Technology which is currently or may become subject to that Agreement, but not govern the Quad/COF Technology, any Applicable Commercial Improvements, which instead shall be governed solely by this Agreement. In the event any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision, and the Parties agree to negotiate, in good faith, a legal and enforceable substitute provision which most nearly effects the Parties’ intent in entering into this Agreement.

     Section 10.7 — Other Remedies; Specific Performance

     Except as otherwise provided herein, any and all remedies herein expressly conferred upon a Party will be deemed cumulative with and not exclusive of any other remedy conferred hereby or by law or equity upon such Party, and the exercise by a Party of any one remedy will not preclude the exercise of any other remedy. The Parties hereto agree that irreparable damage may occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Parties may be entitled to seek an injunction to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in court, this being in addition to any other remedy to which they are entitled at law or in equity and permitted in advance of any dispute resolution pursuant to Section 10.8 (Governing Law and Dispute Resolution).

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     Section 10.8 — Governing Law and Dispute Resolution

     (a) This Agreement shall be construed in accordance with and governed by the laws of the Federal Republic of Germany, without giving effect to any choice of law or conflict of law rules or provisions (whether of the Federal Republic of Germany or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the Commonwealth of Massachusetts).

     (b) Except as otherwise expressly provided for herein, all disputes arising in connection with this Agreement or its validity or any agreement provided herein, including the determination of the scope or applicability of this agreement to arbitrate, which cannot be resolved by mutual agreement of the Parties shall be finally settled in accordance with the Arbitration Rules and Procedures of the of International Chamber of Commerce without recourse to the ordinary courts of law (except where a Party seeks an injunction as provided in Section 10.7 and where a Party seeks to enforce a determination made by the arbitral body). The place of arbitration is Berlin, Germany. The arbitral tribunal consists of three (3) arbitrators. The Substantive law of the Federal Republic of Germany is applicable to the dispute. The language of the arbitral proceedings is English.

     Section 10.9 — Compliance with Laws and Regulations

     Each Party will comply with all applicable laws, regulations and ordinances.

     Section 10.10 — Export

     No Party shall export or re export, directly or indirectly, any technical information disclosed hereunder or direct product thereof to any destination prohibited or restricted by the applicable export control regulations, including the U.S. Export Administration Regulations and regulations of Germany, without the prior authorization from the appropriate governmental authorities. Without limiting the foregoing, E shall be responsible for obtaining government approvals, permits or the like necessary for the export of its technology from the United States to EQ in Germany, and EQ shall be responsible for obtaining all government approvals, permits or the like required for the import of any technology to EQ and into Germany and for the export of any technology or products by EQ from Germany.

     Section 10.11 — Force Majeure

     No Party shall be liable to another Party for failure to perform its obligations under this Agreement if such failure is caused by any event or condition not reasonably within the control and anticipation of the affected Party, including, without limitation, by fire, flood, typhoon, earthquake, explosion, strike, labor trouble or other industrial disturbance, unavoidable accident, war (declared or undeclared), act of terrorism, sabotage, embargo, riot, or any other cause beyond the control of the Parties, provided that the affected Party promptly notifies the other Party of the occurrence of such event or condition and takes reasonable steps necessary to resume performance of its obligations so interfered with.

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     Section 10.12 — Independent Contractors

     The Parties hereto are independent contractors. Nothing contained herein or done pursuant to this Agreement shall constitute either Party the agent of the other Party for any purpose or in any sense whatsoever, or constitute the Parties as partners or joint venturers.

     Section 10.13 — Third Party Beneficiaries

     No provision of this Agreement is intended to confer upon any person or entity other than the Parties hereto (and their permitted assigns) any rights or remedies hereunder.

     Section 10.14 — Counterparts

     This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each Party hereto shall have received a counterpart hereof signed by the other Party hereto.

(The remainder of this page is intentionally left blank.)

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     IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

EVERGREEN SOLAR, INC.
By:	/s/ Michael El-Hillow
	Name:	Michael El-Hillow
	Title:	CFO

EVERQ GMBH
By:	/s/ T. Scheidegger / /s/ C. Langden
	Name:	T. Scheidegger / C. Langden
	Title:	CEO / CSO

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EXHIBIT A

Cost Comparison Spreadsheet

[****]

EX-10.35

Exhibit 10.35

ADDENDUM

to the

QUAD TECHNOLOGY LICENSE AGREEMENT

dated October 6, 2008

By and Between

EVERGREEN SOLAR, INC.

and

EVERQ GMBH

As of October 6, 2008

Evergreen Solar, Inc. (“E”) and EverQ GmbH (“EQ”) have entered into the Quad Technology License Agreement (the “Agreement”) dated October 6, 2008. In addition to the Agreement E, EQ and Deutsche Bank AG Filiale Deutschlandgeschäft (“Bank”) agree as follows:

1.	E and EQ hereby assign all of EQ’s rights and obligations arising from the Agreement with the approval of Q-Cells AG and Renewable Energy Corporation ASA as a whole to any person named by the Bank continuing EQ’s business by means of acquisition of the shares in EQ or substantially all of its assets (the assignee hereafter referred to as the “Purchaser”).
	The aforementioned assignment is effective only under the occurrence of the following condition precedent (“Condition Precedent”): that any and all conditions for the utilization of securities included in the loan agreement on a consortional loan of EUR 192,500,000.00 dated September 1, 2008 by and between EQ, the Bank and other parties and in any of its securities related subcontracts have been met.
2.	Purchaser shall not have the right under this Agreement to make in total more than 180 MW of Licensed Products per year (including the right to make not more than 90 MW of Licensed Products per year according to No. 3 of the Addendum to the Amended and Restated License and Technology Transfer Agreement dated April 30, 2007). EQ’s rights and obligations resulting from the Amended and Restated License and Technology Transfer Agreement dated September 29, 2006, shall apply for the portion of Licensed Products produced on the basis of the Gemini Technology. EQ’s rights and obligations resulting from the Quad Technology License Agreement dated October 6, 2008 shall apply for the portion of Licensed Products produced on the basis of the Quad Technology.
3.	Notwithstanding anything contained herein or in the Agreement to the contrary, Intellectual Property Rights and Technology licensed to each Purchaser and E under the Agreement shall not include any Intellectual Property Rights or Technology developed after effectiveness of the Condition Precedent. Additionally, Article 3 (Technology Transfer) of the Agreement shall terminate upon effectiveness of the Condition Precedent, and Purchaser shall have no rights and no obligations under such Article.

2

4. Following assignment under the provisions of this Addendum, E may terminate this Addendum and the Agreement at any time by notice in the event that Purchaser fails to comply with any material provision of this Addendum or the Agreement and, in the case of a breach which is capable of remedy, fails to remedy such breach within forty-five (45) days of notification of such breach. Any rights of extraordinary termination remain unaffected.

Evergreeen Solar, Inc.

Place, Date	Signature(s)
EverQ GmbH
Place, Date	Signature(s)
Deutsche Bank AG
Filiale Deutschlandgeschäft
Place, Date	Signature(s)

We hereby declare approval of the Addendum above:

Q-Cells AG
Place, Date	Signature(s)
Renewable Energy Corporation ASA
Place, Date	Signature(s)

3

EX-10.36

Exhibit 10.36

Seite 108 von 163 des Vertrages vom 01. September 2008 über einen Konsortialkredit an die EverQ GmbH in Höhe von €192.500.000,00

ANLAGE 11

Undertaking of Evergreen Solar Inc.

Evergreen Solar, Inc. (“Evergreen”)
Deutsche Bank AG Filiale Deutschlandgeschäft, in its capacity as Security Agent and Lender,
Deutsche Bank Luxembourg S.A.
Bayerische Hypo- und Vereinsbank Aktiengesellschaft
HVB Banque Luxembourg Société Anonyme
NORD/LB Norddeutsche Landesbank Girozentrale
IKB Deutsche Industriebank AG
Sachsen Bank unselbstständige Anstalt der Landesbank Baden-Württemberg
EverQ GmbH

agree as follows:

Undertaking

All terms set in italics in this Undertaking have the same meaning as the terms set opposite to them in the table attached as Annex 1, which in turn have the meaning defined in the syndicated loan agreement dated 30 April, 2007 as amended on 22 May 2007 and on 01 September 2008 regarding a syndicated loan in the amount of EUR 192,500,000.00 granted to EverQ GmbH (Loan Agreement). The Loan Agreement including schedules is known to Evergreen in its entirety. Terms defined in this Undertaking (“Undertaking”) have the meaning defined herein and are not set in italics.

However, Evergreen is not a party to the Loan Agreement and the latter does not constitute a legally binding document for Evergreen even where the wording of the Loan Agreement might suggest otherwise. Rather, the legal relationship between Evergreen on the one side and the Financing Parties and the Borrower on the other side is exclusively governed by this Undertaking regarding the issuance of the aforementioned loan to the Borrower.

Seite 109 von 163 des Vertrages vom 01. September 2008 über einen Konsortialkredit an die EverQ GmbH in Höhe von €192.500.000,00

Section A     Undertaking

§ 1	Subordination of claims of Shareholders
(1)	Evergreen hereby subordinates all of its current and future claims against the Borrower, and all of the rights appertaining thereto, with the exception of trade receivables and the claims on interest out of its shareholder loans that may not bear significantly higher interest than Tranche C, to all of the current and future claims of the Banks (including all of their domestic and foreign branches) against the Borrower under the Financing Documents, irrespective of the legal form of the Borrower at such time and irrespective of the identity of its shareholders. As long as the Banks have not been fully satisfied in respect of the aforementioned claims when due and payable, Evergreen will not dispose of its claims subordinated in accordance with this subsection without the prior written consent of the Banks and, in particular, will not collect on them, secure them, assign them to third parties, pledge them or set them off. At the same time, Evergreen warrants that it has not disposed of the claims prior to today, so that no third party rights exist with respect to such claims.
(2)	Evergreen hereby subordinates all of its current and future trade receivables and all of the rights against the Borrower appertaining thereto as well as the claims on interest out of its shareholder loans that may not bear significantly higher interest than Tranche C to all of the claims of the Banks (including all of their domestic and foreign branches) against the Borrower under the Financing Documents that have or will have fallen due, irrespective of the legal form of the Borrower at such time and irrespective of the identity of its shareholders. As long as the Banks have not been fully satisfied in respect of the aforementioned claims when due and payable, Evergreen will not dispose of its claims subordinated in accordance with this subsection without the prior written consent of the Banks and, in particular, will not collect on them, secure them, assign them to third parties, pledge them or set them off. At the same time, Evergreen warrants that it has not disposed of the claims prior to today, so that no third party rights exist with respect to such claims.
(3)	This subordination shall remain valid until it is rescinded by written mutual agreement. The Banks shall consent to the rescission if the Borrower has fulfilled or secured all of its obligations to them under the Financing Documents. The Banks have the right to grant their consent subject to the condition subsequent that the Banks are required to return the

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amounts that have been paid to them (especially in the case of impending challenge during insolvency proceedings).

§ 2 Representations and Warranties

By concluding this Undertaking, Evergreen represents and warrants to the Banks that

(a)	within the framework of the current version of the Master Joint Venture Agreement, the MoU and the respective License and Technology Transfer Agreement executed by Evergreen, the Borrower will receive unlimited use of all of the licenses and other rights of use, as well as the necessary process expertise, necessary to satisfy the Business Plan, to the extent Evergreen owns such rights;
(b)	no judicial or extrajudicial legal proceedings exist with respect to the licenses and other rights of use referred to in subparagraph (a) that could threaten the Borrower’s rights out of the licenses or the rights of use;
(c)	all agreements between the Borrower and Evergreen have been concluded, and are being performed, on the basis of terms that are at arm’s length;
(d)	if it expands production capacity, grants licenses or other rights of use to third parties — or acquires shares of companies — that compete with the Borrower using comparable technology to its own technology it shall, to the extent feasible, grant to the Borrower within the framework of the current versions of the Master Joint Venture Agreement, the MoU and of the respective License and Technology Transfer Agreement access to the use of the respective technology at least equivalent to its own access and on at least the same (or more favorable) terms.

The aforementioned Representations and Warranties shall apply as having been repeated by Evergreen with every Notice of Drawing, on each drawing date and on the first day of each Interest Period.

§ 3	Conclusion of Inter-Company Agreements
(1)	Evergreen covenants, in respect to the Borrower, not to enter into any control, profit transfer or other inter-company agreements within the meaning of sec. 291 and 292 of the German Stock Corporation Act (Aktiengesetz), or to execute transformations within the meaning of

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	the German Act on Business Transformations (Umwandlungsgesetz) or comparable transactions without the prior written consent of the Banks.
(2)	§ 3 (1) above does not apply to the Borrower’s transformation into a stock corporation (Aktiengesellschaft) according to sec. 190 ff. of the German Act on Business Transformations (Umwandlungsgesetz).

§ 4 Expansion Measures

The Borrower and the Shareholders shall offer the Banks the option of financing the Expansion Measures in preference to all other financing providers. However, no prejudice to a favourable financing decision may be derived therefrom.

If the Banks’ review does not lead to a favourable financing decision, then the Banks consent to the Expansion Measures already by executing the Loan Agreement if the Borrower and the Shareholders are implementing the Expansion Measures via a subsidiary or affiliate on a stand-alone basis, i.e. without any financial or non-financial recourse whatsoever to the Borrower, it being understood that the Shareholders must grant to the Borrower at least the same terms and conditions as to such subsidiary or affiliate to the extent services rendered, goods delivered or rights granted to such subsidiary or affiliate are also rendered, delivered or granted under the Project Contracts.

§ 5	Further Obligations
(1)	Jointly with the further Shareholders, Evergreen has contributed equity capital to the Borrower in the amount of EUR 62,900,000.00 and has granted the Borrower shareholder loans (subordinate to the claims of the Banks under the Loan Agreement in accordance with Section A § 1 subsections (1) and (2) above) in the amount of at least EUR 125,000,000.00 prior to the first Drawing under the Loan Agreement.
(2)	Until the full repayment of all amounts payable by the Borrower under the Loan Agreement, Evergreen covenants

(i) to grant additional equity capital or additional loans (subordinated in accordance with Section A § 1 subsections (1) and (2) above to claims of the Banks under the Loan Agreement), in the amount of 33.33% of that amount by which

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(a)	the investment costs for EverQ3 exceed the investment costs projected in the Business Plan or
(b)	investment grants or investment subsidies are not granted in the projected amount or investment grants or investment subsidies are required to be repaid or Tranche B is to be repaid by Maturity Date;

In case of (b) above the Borrower is obliged to make a repayment towards the drawdown under Tranche B in the amount of the additional equity or additional loans received.

(ii)	to secure Completion of the EverQ3 investment by granting additional equity capital or additional loans (subordinated in accordance with Section A § 1 subsections (1) and (2) above to claims of the Banks under the Loan Agreement), in the amount of 33,33% of the necessary amount if the Borrower fails to comply with its Undertakings under § 15 (Financial Ratios) during the construction period of EverQ3; such additional shareholder loans may be repaid to Evergreen provided that and insofar as the Borrower again complies with its Undertakings under § 15 (Financial Ratios) considering such repayment;
(iii)	to secure Completion, including — if required — backfitting from Quad Technology to Gemini String Technology.
(iv)	to support the Borrower by implementation of actions contained in the MoU,
(v)	to promote the Borrower’s operations on the basis of the Project Contracts.

(3)	The repayment of Evergreen’s shareholder loans is permitted provided that and insofar as the Borrower’s equity capital was increased by proceeds of the IPO at least in the Aggregate Amount.
	“Aggregate Amount” equals the sum of the repayments of Shareholder-1’s, Shareholder-2’s and Shareholder-3’s shareholder loans, the payment according to Section A § 5 subsection (4) of the Undertaking of Shareholder-1 (Schedule 11 to the Loan Agreement) and the payment according to Section A § 5 subsection (4) of the Undertaking of Shareholder-3 (Schedule 13 to the Loan Agreement).

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(4)	Evergreen covenants to receive the in section E.IV of the MoU mentioned “Gemini Compensation Value” in the amount of USD 45.000.000,00 or any comparable payment from the Borrower only provided that and insofar as the Borrower’s equity capital was increased by proceeds of the IPO at least in the Aggregate Amount
(5)	Upon demand, Evergreen will reimburse the Agent, the Security Agent and the other Financing Parties all such reasonable and necessary external costs as the latter have incurred in connection with the judicial or extrajudicial preservation or enforcement of their rights against Evergreen.
(6)	Evergreen covenants not to entirely or partially assign or transfer its rights and obligations under this Undertaking.
(7)	Until the Borrower is not listed on the stock exchange, Evergreen covenants not to receive dividends or distributions or comparable (direct or indirect) payments or benefits from the Borrower. If permitted to Commercial Law, such payments or performances are permitted from the year 2010 for the business year 2009, as far and as long as the Leverage Ratio goes below the value 1,5.
(8)	Evergreen shall concurrently sign this Undertaking, Addendum-1 according to Annex 2 and the Addendum-2 according to Annex 3 to this Undertaking.
§ 6	Miscellaneous
	Claims of the Financing Parties against Evergreen are not affected by the agreements in § 23 subsection (8) (Costs and expenses) of the Loan Agreement.

Section B     Miscellaneous

§ 1	Payments
(1)	Payment without deductions

All payments of Evergreen under this Undertaking are payable net, with no deductions of tax or similar charges whatsoever, irrespective of the nature thereof, without any express demand made therefor, on the due date (no later than 10 am local time). Payment obligations shall only be

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deemed to have been satisfied with the effect of discharging the obligation vis-a-vis the Bank or Banks if and to the extent the relevant amounts are effectively paid in the currency in which they are owed and in immediately disposable funds and have been credited, without reservation, to the corresponding account designated by the Agent (or, in the case of payment obligations under an Ancillary Facility, by the relevant Ancillary Bank) at the main trading centre of the currency in question.

(2) No set-off

Evergreen is not entitled to set-off its own counterclaims against claims of the Agent or of the Banks under the Loan Agreement or to assert a right of retention. The waiver of the right to set-off and of retention does not apply to the extent the counterclaims are undisputed or have been bindingly adjudicated.

(3) Partial payments

Should Evergreen make payments that are insufficient to satisfy liabilities under this Undertaking which are in arrears or which are due, then in the event of payments to the Agent, the Agent (in accordance with the ratios of the Banks) or, in the case of payments made to an Ancillary Bank, the Ancillary Bank in question shall apply these payments towards such payments as are in arrears or due, in the following priority:

(a)	first — towards fees, commissions, costs and other expenses of the Arranger, the Agent or the Security Agent to be reimbursed;
(b)	second — towards interest claims which are due and have not been paid;
(c)	third — towards outstanding Drawings; and
(d)	fourth — towards all further claims which are due.
§ 2	Notices
(1)	Form

Unless otherwise provided in this Undertaking, all notices under this Undertaking must be given by letter or facsimile.

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(2) Address

All notices to Evergreen shall be directed to the address set forth in Schedule 10 to the Loan Agreement or to such other address as Evergreen has timely indicated to the Agent.

§ 3 Amendments

No amendments to this Undertaking shall be valid unless made in writing. The foregoing also applies to any amendment to or waiver of this writing requirement.

§ 4 Transfer

Each Bank is entitled and obliged to assign or transfer, as the case may be, all or part of its rights and duties under this Undertaking to another credit institution or financial institution, provided, however, that such assignment and transfer may only be effected jointly with the assignment and transfer of all or the correspondig part of, as the case may be, the rights and duties such Bank has under the Financing Documents.

§ 5 Severability clause

Should any provisions of this Undertaking be or become invalid or unenforceable, whether in whole or in part, then the remaining provisions hereof shall remain unaffected thereby. The Parties hereby undertake to replace an invalid or unenforceable provision with the valid and enforceable provision that most closely reflects in commercial terms the purpose of the invalid or unenforceable provision. An analogous rule shall apply in the case of contractual gaps.

§ 6 No waiver

A delay or a failure (including an only partial failure) to exercise rights on the part of the Agent or the Banks shall not be deemed a waiver of those rights and shall not give rise to a forfeiture of such rights.

§ 7 Language

(1) Notices

All notices given in connection with this Undertaking must be given in German or English.

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(2) Documents

Any other document submitted in connection with a Financing Document must:

(a)	be prepared in German or English,
(b)	unless otherwise agreed with the Agent, be submitted together with a certified German translation. In such case the German translation shall take priority, except where the document in question is prescribed by law or is otherwise an official document.

§ 8 Prescription

Any right and any claim of a Financing Party against Evergreen arising in connection with a Financing Document shall be prescribed after three years from the date it falls due, except where the relevant statutory prescription period is longer.

§ 9 Term

The term of this Undertaking shall not expire until all claims of the Banks under the Loan Agreement have been finally fulfilled.

§ 10 Applicable Law, Jurisdiction

(1)	This Undertaking and all rights and obligations arising hereunder shall in all respects be governed by German law.
(2)	Evergreen hereby submits to the jurisdiction of the competent courts of Frankfurt am Main. However, each Financing Party may sue Evergreen before each other competent court. Evergreen irrevocably waives any objection which it may now or hereafter have that such proceedings have to be brought in a more convenient forum.

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Date:	Evergreen Solar, Inc.
Sep 19, 2008
	(/s/ Richard M. Feldt)       (                       )
The Security Agent
Date:	Deutsche Bank AG, Filiale Deutschlandgeschäft
	(                     )      (                     )
The Agent
Date:	Deutsche Bank Luxembourg S.A.
	(                     )      (                     )
The Banks
Date:	Deutsche Bank AG, Filiale Deutschlandgeschäft
	(                     )      (                     )

Seite 118 von 163 des Vertrages vom 01. September 2008 über einen Konsortialkredit an die EverQ GmbH in Höhe von €192.500.000,00

Date:	Deutsche Bank Luxembourg S. A.
	(                      )     (                      )
Date:	Bayerische Hypo- und Vereinsbank Aktiengesellschaft
	(                      )     (                      )
Date:	HVB Banque Luxembourg Société Anonyme
	(                      )     (                      )
Date:	NORD/LB Norddeutsche Landesbank Girozentrale
	(                      )     (                      )
Date:	IKB Deutsche Industriebank AG
	(                      )     (                      )

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Date:	Sachsen Bank
	unselbstständige Anstalt der Landesbank Baden-Württemberg
	(                      )     (                      )
The Borrower
Date:	EverQ GmbH

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Annex 1

Terms Defined in the Loan Agreement

Addendum-1	Addendum-1
Addendum-2	Addendum-2
Agent	Agent
Lead Arranger	Lead Arranger
Co-Lead Arranger	Co-Lead Arranger
Arranger	Arranger
Ancillary Bank	Ancillary Bank
Ancillary Facility	Ancillary Fazilität
Banks	Banken
Borrower	Kreditnehmer
Business Plan	Businessplan
Completion	Fertigstellung
Completion date	Fertigstellungstermin
Drawing	Ziehung
EverQ3	EverQ3
Expansion Measures	Expansionsmaßnahmen
Financing Documents	Finanzierungsdokumente
Financing Parties	Finanzierungsparteien

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Interest Period	Zinsperiode
IPO	Börsengang
Leverage Ratio	Verschuldungsgrad
Loan Agreement	Kreditvertrag
MoU	MoU
Maturity Date	Endfälligkeitstag
Notice of Drawing	Ziehungsnachricht
Project Contracts	Projektverträge
Representations and Warranties	Bestätigungen und Zusicherungen
Security Agent	Sicherheitenagent
Shareholder	Gesellschafter
Shareholder-1	Gesellschafter-1
Shareholder-2	Gesellschafter-2
Shareholder-3	Gesellschafter-3
Tranche B	Tranche B
Tranche C	Tranche C

EX-10.37

Exhibit 10.37

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.

AMENDED AND RESTATED

MASTER JOINT VENTURE AGREEMENT

By and Among

EVERGREEN SOLAR, INC.

Q — CELLS SE

RENEWABLE ENERGY CORPORATION ASA

and

EVERQ GmbH
(envisaged SOVELLO AG)

TABLE OF CONTENTS

		Page
ARTICLE I. Relation to Existing Agreements; Interpretation, Relation to Articles, Participation of Sovello			3
1.1	Relation to Existing MJVA and Concurrent Agreements		3
1.2	Definitions		4
1.3	Headings and Other Interpretation		10
1.4	Relation to Articles of Association and Rules of Procedure for the Management Board		10
1.5	German Legal Terms		10
1.6	Participation of Sovello		10
ARTICLE II. Purpose of Sovello			11
ARTICLE III. Management and Operation of Sovello			11
3.1	Management and Supervision of Sovello		11
3.2	Accounting Matters; Basic Financial Inspection Rights		11
3.3	Other Financial Matters		12
3.4	Information to be Shared Equally		13
3.5	Further Capacity Expansions and Additional Financing		13
3.6	Directors		14
3.7	Indemnification		15
ARTICLE IV. Restrictions on Transfer; Right of First Refusal for Sale of Shares			15
4.1	Restrictions on Transfer; Exceptions		15
4.2	Right to Notice		15
4.3	Exercise of Right of First Refusal		16
4.4	Right to Sell to Third Party		16
4.5	Reinstatement of Right of First Refusal		16
4.6	Change of Control		17
4.7	Co-Selling Rights		17
4.8	Adherence by Third Party		17
4.9	Drag along — right and relation to Articles of Association		17
ARTICLE V. Term and Termination			18
5.1	Term		18
5.2	Termination by mutual consent		18
5.3	Expulsion for Breach		18
5.4	Termination after [****]		21
5.5	Termination in Case of Sale and Transfer		21
5.6	Post-Termination Covenants		21

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		Page
ARTICLE VI.			22
	Warranties		22
ARTICLE VII. Liability and Limitations of Liability			23
7.1	Liability		23
7.2	Definitions		23
7.3	Determination of the Amount of Damage		23
7.4	Limitations of Liability for Breach of Warranties		24
7.5	GENERAL LIMITATION OF LIABILITY		24
ARTICLE VIII. Additional Agreements			24
8.1	Marketing		24
8.2	Q Manufacturing Right of First Refusal		24
8.3	REC Manufacturing Right of First Refusal		25
8.4	Relation of Sections 8.2 and 8.3		26
8.5	[****]		26
8.6	Cooperation to Pursue Tax Efficiencies		27
8.7	Confidentiality		27
8.8	Reasonable Efforts		29
8.9	Standstill		29
ARTICLE IX. Miscellaneous			30
9.1	Expenses		30
9.2	Further Assurances		30
9.3	Notices		30
9.4	Governing Law and Dispute Resolution		32
9.5	Binding Effect		32
9.6	Assignment		32
9.7	No Third Party Beneficiaries		33
9.8	Foreign Corrupt Practices Act		33
9.9	Sarbanes-Oxley and Nasdaq Covenant		33
9.10	Amendment, Waivers		33
9.11	Entire Agreement		34
9.12	No Joint Venture or Partnership		34
9.13	Language for Joint Venture and this Agreement		34
9.14	Voting and other rights		34
9.15	Severability		34
9.16	Condition precedent		35

Exhibits

Exhibit A Articles of Association

Exhibit A-1 German Translation of Articles of Association

Exhibit B Rules of Procedure for the Management Board

Exhibit B-1 German Translation of the Rules of Procedure for the Management Board

-ii-

-iii-

AMENDED AND RESTATED
MASTER JOINT VENTURE AGREEMENT

     This Amended and Restated Master Joint Venture Agreement (the “Agreement”) is made and entered into on November 5, 2008, by and between

     Evergreen Solar, Inc., a Delaware corporation with its principal executive offices located at 138 Bartlett Street, Marlboro, Massachusetts, USA (“Evergreen” or “E”),

     Q-Cells SE, a European stock corporation organized under the laws of Germany with its principal executive offices located at Guardianstr. 16, 06766 Bitterfeld-Wolfen, OT Thalheim, Germany (,,Q-Cells“ or “Q”), as legal successor of Q-Cells AG,

     Renewable Energy Corporation ASA, a stock corporation organized under the laws of Norway with its principal executive offices located at Kjørboveien 29, NO-1337 Sandvika, NORWAY (“REC”)

     and

     EverQ GmbH, a limited liability company organized under the laws of Germany, after the envisaged reorganization by way of change of legal form (Formwechsel) pursuant to sections 238 et seq., 226, 190 et seq. of the German Merger and Reorganization Act (Umwandlungs-gesetz, UmwG) into Sovello AG, a stock corporation organized under the laws of Germany, with its principal offices located at Sonnenallee 14-24, 06766 Bitterfeld-Wolfen, OT Thalheim, Germany (hereinafter only ,,Sovello”).

     Capitalized terms used herein shall have the meaning ascribed to them in Section 1.2.

Recitals

     WHEREAS:

     The Parties are each engaged in the manufacture and distribution of photovoltaic solar products.

A. Evergreen Solar

Evergreen has unique and proprietary wafer manufacturing technology which enables lower cost manufacturing of solar wafers, cells and panels. Evergreen has an active research program to continue to develop its advanced manufacturing technology.

B. Sovello

Sovello is a joint venture between REC, Q-Cells and Evergreen that was established in 2005 to manufacture wafers using String Ribbon Technology, photovoltaic cells and modules incorporating such wafers based on the combination of their respective technologies and expertise. Two existing factories are already running in Thalheim, Germany, using Gemini String Ribbon Technology. In October 2007, REC, Q-Cells and Evergreen agreed (i) on a further expansion of Sovello with a capacity of further 75 MW based on Quad/COF Technology, (ii) to look to establish factories in other locations worldwide and (iii) to make changes in the contractual relationships between Evergreen and Sovello and establish Sovello as an independent company with a goal of completing an initial public offering.

C. REC

REC is, via its subsidiaries Solar Grade Silicon Holding, Inc. and Solar Grade Silicon LLC with production at Moses Lake, Washington, USA and Butte, Montana USA (“SGS”), the world leader in the production of solar grade silicon. REC is also the world’s largest suppliers of high quality silicon wafers for photovoltaic applications. At present REC produces silicon wafers through its unique and proprietary casting and slicing processes.

D. Q-Cells

Q-Cells is the largest independent manufacturer of crystalline silicon solar cells in the world. Q-Cells has active programs to increase the efficiency and reduce the cost to convert wafers into solar cells.

E. Benefits to Parties

The Parties believe that combining their respective technologies and capabilities would have a number of benefits including:

     (1) REC

(a)	Equity participation in Sovello
(b)	Secure high value customer for scaling of granular silicon
(c)	[****]

-2-

     (2) Evergreen

(a)	Accelerated development and proliferation of its wafer manufacturing technology
(b)	Equity participation in Sovello

     (3) Sovello

(a)	Secure silicon supply at attractive market related pricing
(b)	Accelerated wafer manufacturing technology development
(c)	Accelerated technology and manufacturing systems development

     (4) Q-Cells

(a)	Improved cost position through Sovello
(b)	Low-cost supply of polysilicon-based wafers
(c)	Equity participation in Sovello

F. E, Q and REC have agreed on the renaming and conversion of EverQ GmbH into Sovello, a stock corporation to be organized under the laws of Germany.

G. Existing MJVA

The original Master Joint Venture Agreement dated January 14, 2005 (notarial deed nr. 7/2005 of the Berlin notary public Dr. Rudolf von Hanstein) has been fully restated on November 22, 2005 (notarial deed nr. 287/2005 of the Berlin notary public Dr. Rudolf von Hanstein) and further amended on September 29, 2006 and October 23, 2007, respectively, (notarial deeds nrs 267/2006 and. 463 / 2007 of the Berlin notary public Dr. Rudolf von Hanstein) by E, Q, REC and EverQ GmbH (as so amended, the “Existing MJVA”).

NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and of the mutual benefits to be derived here from, and for other good and valuable consideration (the receipt and adequacy of which are hereby acknowledged), the Parties hereto agree as follows:

ARTICLE I.

Relation to Existing Agreements; Interpretation, Relation to Articles, Participation of Sovello

     1.1 Relation to Existing MJVA and Concurrent Agreements

     The Existing MJVA is hereby amended and restated as set forth in this Agreement with effect immediately upon registration of the conversion and renaming of EverQ GmbH into Sovello at the commercial register with the local court of Stendal. The Concurrent Agreements entered into by a Party and/or the Parties and Sovello remain in full force and effect.

-3-

     1.2 Definitions For the purposes of this Agreement, capitalized terms used herein shall have the respective meanings assigned thereto in this Section 1.2.

          “Acquisition Proposal” has the meaning assigned in Section 4.2.

          “Acquisition Proposal Notice” has the meaning assigned in Section 4.2.

          “Act” has the meaning assigned in Section 9.8.

          “Action” means any claim, action, suit or arbitration, as well as any inquiry, proceeding or investigation by or before any Governmental Authority.

          “Additional Capital Contributions” has the meaning set forth in Section 2.3.

          “Affiliate” means any Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, a Party at the relevant time. For the purposes of this definition, “control” means the beneficial ownership of more than fifty percent (50%) of the voting rights.

          [****]

          “Alternative Venture” means [****]

          [****]

          “Annual Plan” shall mean an annual business and operations plan as prepared by the Management Board.

          “Arbitrator” has the meaning assigned in Section 5.3 (c)(ii)(3).

          “Articles of Association” means the Articles of Association (Satzung) of Sovello set forth as Exhibit A attached hereto (a German translation is attached hereto as Exhibit A-1), together with any amendments thereto approved by the Parties. Should there be a discrepancy between the German and the English versions of the Articles, the English version shall prevail only for the purposes of this Agreement and the Parties shall amend the German version of the Articles to reflect the meaning of the English version.

          “Bankruptcy Event” means with regard to any Party:

               a) such Party commencing a voluntary case or other proceeding, or an involuntary case or other proceeding being commenced against such Party and remaining undismissed and unstayed for a period of [****] days, in either case seeking liquidation, reorganization or other relief with respect to such Party or its debts under any applicable bankruptcy, reorganization, composition, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of such Party or any substantial part of its property;

-4-

               b) such Party consenting to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it; or

               c) such Party admitting in writing its inability to pay its debts generally as they become due or generally failing to pay such debts as they become due or becoming subject to disposition of a clearing-house to suspend transactions.

          “Breaching Party” has the meaning assigned in Section 5.3.

          “Business Day” means any day on which financial institutions are generally open and available for business, and which is not otherwise a holiday, in all of the German state of Saxony-Anhalt, the US state of Massachusetts and Oslo, Norway.

          “Business Year” means the period of time which, according to Sovello’s Articles of Association, or relevant legislation, shall be the annual period used for accounting and public reporting obligations of Sovello.

          “Capacity Expansion” has the meaning assigned in Section 3.5 (a).

          “Cell” means a crystalline silicon material substrate that has been processed to provide electrical output from incident sunlight.

          “Change of Control” means with respect to any entity, the acquisition of such entity by another Person by means of any transaction or series of related transactions (including, without limitation, any share acquisition, sale of all or substantially all of the assets, reorganization, merger or consolidation, but excluding any sale of shares for capital raising purposes) other than a transaction or series of transactions in which the holders of the voting securities of such entity outstanding immediately prior to such transaction continue to retain (either by such voting securities remaining outstanding or by such voting securities being converted into voting securities of the surviving entity), as a result of shares in such entity held by such holders prior to such transaction, more than 50% of the total voting power represented by the voting securities of such entity or such surviving entity outstanding immediately after such transaction or series of transactions.

          “Concurrent Agreements” means the existing Services Agreements, the License Agreements, the Silicon Supply Agreements (including the Silicon Supply Agreement between SGS and E entered into on November 22, 2005) between the Parties and Sovello, including the Memorandum of Understanding by and among Sovello, Evergreen, REC and Q-Cells (the “MOU”) made on October 25, 2007, and all further agreements made between a Party and/or the Parties and Sovello.

          “Confidential Information” has the meaning assigned in Section 8.7.

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          “Director” means a member of the Supervisory Board (Aufsichtsratsmitglied) of Sovello.

          “Disclosing Party” has the meaning assigned in Section 8.7(a).

          “Distribution” means the transfer of cash or other property whether by way of dividend or otherwise to one or more of the Shareholders, or the purchase or redemption of Shares for cash or other property.

          “EU” means European Union.

          “E First Refusal Notice” has the meaning assigned in Section 8.2(b).

          “Election Notice” has the meaning assigned in Section 4.3.

          “EverQ GmbH” means the limited liability company organized under the laws of Germany, registered at the commercial register of the local court of Stendal, Saxony-Anhalt, Germany, under HRB 4769, as the legal predecessor entity to Sovello.

          “Exchange Act” means the Securities Exchange Act of 1934, as amended.

          “Existing MJVA” has the Meaning assigned in the Recitals (G)

          “Fair Market Value” has the meaning assigned in Section 5.3(c).

          “Free Cash” means, as of any date of determination, the amount of liquid net assets held in cash and other liquid, short-term investment instruments in excess of the amount which is sufficient to fund the operations and investments of Sovello for the following [****] period according to Sovello’s then-current budget projections.

          “Gemini String Ribbon Technology” shall mean the String Ribbon Technology as used in Sovello 2 as of the date of signing of this Agreement.

          “Government Investment Grant” means GA-grants (GA-Mittel; Mittel aus dem Programm “Gemeinschaftsaufgabe Aufbau Neue Laender“)

          “Governmental Authority” means any US, German or Norwegian, federal, national, supranational, state, provincial, municipal, local, or similar government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body.

          “Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.

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          “IFRS” means International Financial Reporting Standards.

          “IPO” means an initial public offering of shares of Sovello which results in a listing of the shares in Sovello on a stock exchange of recognized international standing or on an authorized marketplace of recognized international standing.

          “Knowledge” shall mean, with respect to a Party, the actual knowledge of its officers and the members of the Board of Directors or Supervisory Board of such Party, provided that such persons shall have made reasonable inquiry of those employees and consultants, as the case may be, whom such officers or members of the Board of Directors or the Supervisory Board reasonably believe would have actual knowledge of the matters represented.

          “Law” means any US, German or Norwegian, federal, national, supranational, state, provincial, municipal, local or similar statute, law, ordinance, regulation, rule, code, order, requirement or rule of law.

          “Liabilities” means any and all indebtedness or other liabilities and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured or determined or determinable, including those arising under any Law, Action, Governmental Order and those arising under any contract, agreement, arrangement, commitment or undertaking.

          “License Agreements” means the License and Technology Transfer Agreement between Q and Sovello; the License and Technology Transfer Agreement between REC and Sovello; the Quad Technology License Agreement between E and Sovello dated as of October 6, 2008 and the Amended and Restated License and Technology Transfer Agreement between Evergreen and Sovello dated as of September 29, 2006 (as amended by the MOU) and as E and Sovello intend to amend and restate shortly following the date of this Agreement.

          “Management Board” shall mean the Management Board (Vorstand) of Sovello.

          “Material Agreement” means agreements entered into by Sovello with an annual value above Euro 500,000.

          “Material Breach” has the meaning assigned in Section 5.3.

          “Module” means an assembly of multiple, electrically connected Cells also known as a solar panel.

          “Negotiation Period” has the meaning assigned in Section 4.3.

          “Non-Selling Parties” has the meaning assigned in Section 4.2.

          “Parties” means the parties to this Agreement, from time to time, and a “Party” shall mean either E, Q or REC, as applicable. For the avoidance of doubt, Sovello shall not be treated as a Party to this Agreement, if not otherwise stated.

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          “Percentage Interests” means the percentage interests of the Parties in Sovello.

          “Person” means any natural person, firm, partnership, association, corporation, company, trust, business trust, governmental authority or other entity.

          “Quad/COF Technology” meaning the process developed by E for producing silicon wafers using a furnace known as the “Quad” furnace, including Cut on the Fly, as such technology exists at the time of Signing of this Agreement and licensed from E.

          “Q Confirmation Notice” has the meaning assigned in Section 8.2(b).

          “Recapitalization” means any stock dividend, stock split, combination of shares, reorganization, recapitalization, reclassification or other similar event.

          “Receiving Party” has the meaning assigned in Section 8.7(a).

          “Ribbon Technology” means a technique in which a thin sheet of silicon, typically polycrystalline silicon, is grown directly from molten silicon. The sheet is generally grown in a vertical orientation without the use of foreign substrate on which the silicon is formed, although some processes grow the silicon in a horizontal direction and can use a substrate on which the silicon is formed.

          [****]

          “Rules of Procedure for the Management Board” means the rules of procedure for the management board (Geschäftsordnung für den Vorstand) of Sovello set forth as Exhibit B attached hereto (a German translation is attached hereto as Exhibit B-1), together with any amendments thereto. Should there be a discrepancy between the German and the English versions of the Articles, the English version shall prevail only for the purposes of this Agreement and to the extent legally permissible the Parties shall cause to the Supervisory Board to amend the German version of the Rules of Procedure for the Management Board to reflect the meaning of the English version.

          “Sale Period” has the meaning assigned in Section 4.4.

          “Securities Act” means the Securities Act of 1934, as amended.

          “Selling Party” has the meaning assigned in Section 4.2.

          “SGS” has the meaning assigned in the recitals.

          “Shareholder” means each of E, Q and REC and their respective Affiliates.

          “Shares” means shares of Sovello after conversion of EverQ GmbH equity securities or securities convertible or exchangeable into Sovello equity securities.

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          “Signing Date” means the date hereof.

          “Sovello” has the meaning assigned in the Recitals.

          “Sovello 2” shall mean the existing production facilities of Sovello as of the date of this Agreement using the Gemini String Ribbon Technology licensed from E.

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

          “String Ribbon Technology” means [****].

          “Subject Shares” has the meaning assigned in Section 4.2.

          “Supervisory Board” means the Supervisory Board of Directors (Aufsichtsrat) of Sovello.

          “Tax” or, collectively, “Taxes” means any and all German, United States, provincial, state, local and other taxes, assessments and other governmental charges, duties, impositions and liabilities, including taxes based upon or measured by gross receipts, income, profits, sales, use and occupation, and value added, ad valorem, transfer, franchise, withholding, payroll, recapture, employment, excise and property taxes, together with all interest, penalties and additions imposed with respect to such amounts, and any obligations with respect to such amounts arising as a result of being a member of an affiliated, consolidated, combined or unitary group for any period or under any agreements or arrangements with any other Person and including any liability for taxes of a predecessor or transferor entity.

          “Terminating Party” has the meanings assigned in Article 5, as applicable.

          “Termination Call Right” has the meanings assigned in Section 5.3 (d) and Section 5.4 (b), as applicable.

          “Termination Securities” has the meaning assigned in Section 5.3(c).

          “Third Party” means a Person who is neither a Party nor an Affiliate of a Party.

          “Transfer” has the meaning assigned in Section 4.1.

          “US GAAP” means the generally accepted accounting principles in the United States.

          “Wafer” means a crystalline silicon material substrate that is intended to but has not yet been made into a Cell.

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     1.3 Headings and Other Interpretation. In this Agreement (a) headings are for convenience of reference only and shall not affect the interpretation of the provisions of this Agreement except to the extent that the context otherwise requires; (b) words importing the singular shall include the plural and vice versa; (c) words denoting individuals shall include any form of entity and vice versa; (d) words denoting any gender shall include all genders; (e) where any act, matter or thing is required by this Agreement to be performed or carried out on a certain day and that day is not a Business Day then that act, matter or thing shall be carried out or performed on the next following Business Day; (f) unless specified otherwise, any reference herein to any Article, Section, clause, sub-article, sub-clause, Appendix or Exhibit shall be deemed to be a reference to an Article, Section, clause, sub-article, sub-clause, Appendix or Exhibit of this Agreement; (g) any reference to any agreement, document or instrument shall refer to such agreement, document or instrument as amended, modified, supplemented, or novated; and (h) the words “include,” “including” and the derivations thereof shall not be limiting.

     1.4 Relation to Articles of Association and Rules of Procedure for the Management Board. In the event that this Agreement and the Articles of Association and/or Rules of Procedure for the Management Board of Sovello should differ in one or several aspects, in the internal relation between E, Q and REC this Agreement shall supersede the Articles of Association and/or Rules of Procedure for the Management Board as far as this is legally permissible. To the extent legally permissible E, Q and REC hereby undertake that they shall cooperate with respect to the adjustment of Sovello’s Articles of Association and/or Rules of Procedure for the Management Board in accordance with this Agreement. The Parties shall whenever necessary exercise all voting and other rights and powers available to them to procure the alteration of the Articles of Association and/or Rules of Procedure for the Management Board to the extent necessary to permit Sovello and its affairs to be carried out as provided in this Agreement. For the avoidance of doubt, the Articles of Association and/or Rules of Procedure for the Management Board of Sovello do not conflict and are not to be treated as conflicting with any provision of this Agreement. Subject as aforesaid, the Parties hereby undertake to each other to observe and perform the provisions of the Articles of Association of the Company.

     1.5 German Legal Terms. In case of doubt of the meaning of German legal terms, the German words written in brackets and italics shall be definitive.

     1.6 Participation of Sovello.

     Sovello shall, with exception of the rights in Article VII, have no rights under this Agreement and shall not be bound by any obligation hereunder.

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ARTICLE II.

Purpose of Sovello

     The purpose of Sovello shall be the manufacturing and marketing of String Ribbon Technology based photovoltaic products. Sovello shall be a manufacturing company designed to exploit the combined strengths of E, Q and REC. The parties intend that Sovello shall:

          (a) manufacture Wafers using E’s String Ribbon Technology;

          (b) process such Wafers into Cells using a fabrication process that combines certain Cell manufacturing technologies;

          (c) assemble Cells into Modules;

          (d) conduct specific manufacturing and product technology-oriented development work required to optimize its activities; and

          (e) conduct all other activities necessary to the manufacture, test and sale of such solar products with an initial focus on the manufacture, sale and distribution of Modules.

ARTICLE III.

Management and Operation of Sovello

     3.1 Management and Supervision of Sovello.

     To the extent legally permissible, the Parties shall cause Sovello to be managed and supervised in accordance with the provisions of the Articles of Association and the Rules of Procedure for the Management Board. In particular, unless otherwise specifically agreed to by the Parties, the Parties shall cause specific duties and powers of the Supervisory Board to be as set forth in Articles of Association and the Rules of Procedure for the Management Board. Subject to Section 1.4, the Parties shall not take any action in contravention of the Articles of Association and the Rules of Procedure for the Management Board.

     3.2 Accounting Matters; Basic Financial Inspection Rights.

          (a) Basic Accounting Matters. To the extent legally permissible (i) the Parties shall cause Sovello to (i) establish its annual accounts and report its annual results in accordance with the applicable corporate laws of the Federal Republic of Germany, aiming at the optimization of tax benefits of the Shareholders and (ii) make adjustments to its accounts to reflect its financial position and results of operations in accordance with U.S. GAAP.

               (ii) the Parties shall cause Sovello to keep books and records reflecting all its respective transactions, complete and accurate in all material respects.

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               (iii) the Parties shall cause the fiscal year of Sovello to commence on January 1 and end on December 31.

          (b) Basic Financial Information. To the extent legally permissible, the Parties shall cause Sovello to furnish the following reports to each of E, Q and REC:

               (i) As soon as practicable after the end of each fiscal year of Sovello, and in any event within forty (40) days after the end of each fiscal year of Sovello, an audited consolidated balance sheet of Sovello as at the end of such fiscal year, and consolidated statements of income and cash flows of Sovello for such year, prepared in accordance with German GAAP (HGB), IFRS and US GAAP consistently applied.

               (ii) As soon as practicable after the end of the first, second and third quarterly accounting periods in each fiscal year of Sovello, and in any event within twenty-five (25) days after the end of the first, second, and third quarterly accounting periods in each fiscal year of Sovello, an unaudited consolidated balance sheet of Sovello as of the end of each such quarterly period, and unaudited consolidated statements of income and cash flows of Sovello for such period, prepared in accordance with German GAAP (HGB), IFRS and US GAAP consistently applied, subject to changes resulting from normal year-end audit adjustments.

               (iii) Monthly profit and loss statements as soon as reasonably practicable.

               (iv) Such other information relating to the financial condition, business prospects or corporate affairs of Sovello as E, Q or REC may from time to time reasonably request.

          (c) Basic Financial Inspection Rights. To the extent permitted by German law during the regular office hours of Sovello, and upon twenty-four (24) hours’ notice to Sovello, E, Q and REC shall cause Sovello to give E, Q, and REC, each individually, (i) full access to all properties, books of account and records of Sovello, and (ii) the right to make copies from such books and records at their own expense.

     3.3 Other Financial Matters.

          (a) Annual Plan. To the extent legally permissible, the Parties shall cause Sovello to prepare, consider and approve, an Annual Plan with respect to each fiscal year of Sovello no later than thirty (30) days prior to the commencement of each fiscal year.

          (b) Dividend Policy. To the extent legally permissible, the Parties agree that an unanimous approval of the shareholders is required prior to any Distribution (i) declared at any time that Free Cash does not exist, (ii) if such Distribution shall cause Free Cash not to exist immediately following such Distribution, or (iii) other than in a manner proportionate to the respective ownership interests of the equity securities of Sovello regardless of whether Free

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          Cash exists. Parties will not accept any Distribution based on decisions made not in accordance with this provision.

     3.4 Information to be Shared Equally.

     Each Party shall cause Sovello to share information regarding the affairs of Sovello equally with all of the Parties and not selectively disclose any such information. In the event Sovello shares information with a Party but not one or both other Parties, any non-recipient Party may request of the receiving Party that the information be provided to all the Parties and, promptly following the receipt of such request, the receiving Party shall share such information with the other Parties.

     3.5 Further Capacity Expansions and Additional Financing.

          (a) It is the intent of the Parties that Sovello shall, if economically viable for Sovello, expand its manufacturing total capacity to approximately 600 MW (the “Capacity Expansion”). Without limiting the foregoing, each of the Parties shall, and, to the extent legally permissible, shall cause the Supervisory Board and/or the Management Board of Sovello to approve the Capacity Expansion, if economically viable for Sovello, and commence substantial activities in furtherance of the Capacity Expansion following the MOU. To that date, Sovello 3 with approximately further 75 MW of the Capacity Expansion has been approved by the Parties and commenced.

          (b) If a majority of the shareholders so requests and to the extent legally permissible, the Parties shall cause Sovello to consider and approve a Capacity Expansion following a determination by such majority of the shareholders that the Capacity Expansion is in the best interest of Sovello.

          (c) Compensation for Grant Repayment Obligations. If Sovello is required to repay all or part of the Government Investment Grant, the following will occur:

               (i) E, Q and REC will loan Sovello the amount to be repaid and Sovello will repay the part of the Government Investment Grant to the appropriate government authorities.

               (ii) The loan will be at [****] % p.a. interest rate.

               (iii) The loan will be made by the Parties in proportion to the shareholdings in Sovello and will be adjusted accordingly as such shareholdings change.

               (iv) All further conditions of the loan shall be at arm’s length.

          (d) Sovello Debt. E, Q and REC have provided undertakings to the Sovello banks pro rata according to their shareholding in Sovello. If only one (or two) of those undertakings is (are) executed by the respective bank(s), the Parties shall share the burden pro rata based on each

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          Party’s shareholding relative to the shareholding of all three Parties in Sovello at the time of such execution.

          (e) No Additional Obligation. No Party shall be required to provide loan financing, equity contributions or any form of guarantee or credit support for repayment for any funding obtained by Sovello, above the obligations described in Section 3.5 (c). For the avoidance of doubt, the Capacity Expansion referenced in Section 3.5 (a) does not oblige any Party to provide additional funding to Sovello. Additionally, for the avoidance of doubt, in each capital increase (including any issuance of any instruments convertible into shares), all Parties shall be entitled to subscribe to new shares (or any instruments convertible into shares) at the same price and terms and pro rata based on their shareholdings in Sovello at such time relative to the shareholdings of the other Parties. For the avoidance of doubt, already existing loans, guarantees and undertakings are excluded.

     3.6 Directors

          (a) Pursuant to § 1 subsection 1 no. 3 of the German Act of One-Third-Participation (Drittelbeteiligungsgesetz, “DrittelbG”) Sovello shall have nine (9) Directors. Six Directors shall be elected by the shareholders ´ meeting according to the provisions of the Articles of Association and the applicable statutory provisions. Three Directors shall be elected by the employees of Sovello according to the provisions of the DrittelbG.

          (b) Each shareholder shall have the right to nominate two Directors and two substitute Directors. The shareholders undertake to elect these nominated Directors and substitute Directors.

          (c) Each Party shall cause conveniently and as far as legally permissible each Director nominated by it to perform his duties as a Director fully in compliance with the terms of this Agreement and the Articles of Association. None of the Parties shall be excused from the performance of this Agreement on the account of the failure of such Party to control such Director nominated by it and appointed by the shareholders.

          (d) In case that the Supervisory Board has to resolve on any transaction of the Management Board according to Article 8.1 b) — d) and i) of the Rules of Procedure for the Management Board each shareholder shall cause conveniently and as far as legally admissible, however respecting the independence of the Directors, the Directors appointed by the shareholders to:

vote against such transaction in the respective voting of the Supervisory Board in case that at least one Director appointed by a shareholder holding at least 15 % in the share capital of Sovello suggests to vote/ votes against such transaction. However, the affirmative vote of any Director nominated by a shareholder who is either a party of such contractual transaction requiring the consent of the Supervisory Board or a controlling shareholder in the party of such contractual transaction is not required.

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          (e) In case that the Supervisory Board has to resolve on any transaction of the Management Board according to Article 8. 1 e) — f) of the Rules of Procedure for the Management Board each shareholder shall cause conveniently and as far as legally admissible, however respecting the independence of the Directors, the Directors appointed by the shareholders to:

vote against such transaction in the respective voting of the Supervisory Board in case that at least one Director appointed by the shareholders suggests to vote/votes against such transaction in the respective voting of the Supervisory Board. However, the affirmative vote of any Director nominated by a shareholder who is either a party of such contractual transaction requiring the consent of the Supervisory Board or a controlling shareholder in the party of such contractual transaction is not required.

     3.7 Indemnification.

     To the fullest extent permitted by German law, E, Q and REC shall cause Sovello to indemnify and hold harmless each Director designated to the Supervisory Board nominated by E, Q and REC from all losses, liabilities, costs and expenses arising out of or relating to such Director’s actions in connection with any action taken within their authority and in their capacity as a Director, except to the extent that such losses, liabilities, costs or expenses are caused by such Director’s fraud, bad faith or willful misconduct, and except to the extent that such Director’s actions comprised or caused breach of this Agreement by the Party who appointed that Director. E, Q and REC agree to vote according to this provision in shareholders meetings.

ARTICLE IV.

Restrictions on Transfer; Right of First Refusal for Sale of Shares

     4.1 Restrictions on Transfer; Exceptions.

     Each of the Parties agrees that it shall not, either directly or indirectly, sell, transfer or dispose of (“Transfer”) any Shares during the term of this Agreement, without complying with the terms of this Article 4; provided, however, that the foregoing restrictions shall not apply to Transfers of shares or other equity interests of Sovello (i) by any Party to any Affiliate of such Party or (ii) from any Affiliate of such Party to such Party or to any Affiliate of such Party, provided always that the transferring Party remains, and the transferee of such transferred Shares or equity interests agrees in the appropriate form to be, bound by the terms of this Agreement to the same extent that the original Parties are bound thereby. For the avoidance of doubt, a Change of Control in a Party does not trigger the other Parties’ right of first refusal under this Section 4.1.

     4.2 Right to Notice.

     Other than those Transfers excepted under Section 4.1, prior to any Party proposing to Transfer any portion of the Shares held by such Party (the “Subject Shares”) to a Third Party

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(an “Acquisition Proposal”), the proposed transferring Party (the “Selling Party”) shall provide to the other Parties (the “Non-Selling Parties”) written notice of the Acquisition Proposal, which notice shall include a reasonable description of all material terms and conditions of or related to the Acquisition Proposal (the “Acquisition Proposal Notice”).

     4.3 Exercise of Right of First Refusal.

     Following receipt of the Acquisition Proposal Notice by the Non-Selling Parties, each of the Non-Selling Parties shall have [****] to provide written notice to the Selling Party (the “Election Notice”) that it intends to elect to exercise its right of first refusal. After delivery of the Election Notice to the Selling Party, the Parties agree to negotiate in good faith the terms and conditions under which the Non-Selling Party or Parties would acquire, [****], all (but not less than all) of the Subject Shares at issue, and the Non-Selling Parties shall have a right of first refusal to purchase all (but not less than all) of the Subject Shares on terms that:

               (i) are reasonably equivalent to the terms set forth in the in the Acquisition Proposal Notice, provided that the Non-Selling Parties shall not have any obligation to agree to any terms which are unique to such Third Party, or

               (ii) are reasonably acceptable to the Selling Party.

     The Parties agree that such good-faith negotiations will continue until the earlier of (i) [****] from the date of delivery of the Election Notice or (ii) such negotiations are terminated earlier by agreement between the Parties (the “Negotiation Period”), during which period appropriate representatives of each Party shall, in good faith, make themselves available to meet. During the Negotiation Period, the Non-Selling Parties shall be permitted to conduct appropriate due diligence. Delivery of the Election Notice shall not obligate the Non-Selling Party to purchase the Subject Shares, but shall be delivered in good faith. [****]

     4.4 Right to Sell to Third Party.

     Subject to compliance with the provisions hereof, including Section 4.3 and Section 4.5, if (i) all Non-Selling Parties fail to deliver an Election Notice within the time required, (ii) all Non-Selling Parties fail to acquire the Subject Shares before the end of the Negotiation Period and such failure to acquire is not due to the unreasonable delay of the Selling Party or (iii) such negotiations are terminated earlier by agreement between or among the Parties (the earlier to occur is referred to herein as the “Lapse Date”), then the Selling Party shall have the right to enter into a transaction with a Third Party to sell the Subject Shares at a price and on terms no more favorable than as set forth in the Acquisition Proposal Notice, provided that such Third Party acquires the Subject Shares within [****] of the Lapse Date (the “Sale Period”). All Parties shall approve such transfer in a shareholders’ meeting of Sovello.

     4.5 Reinstatement of Right of First Refusal.

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     In the event that the Third Party fails to acquire the Subject Shares within Sale Period as described in Section 4.4, the Selling Party shall not thereafter Transfer any shares without first again offering such securities to the Non-Selling Party in the manner provided in this Article IV.

     4.6 Change of Control.

     The Parties agree that the provisions of this Article IV shall not apply to, and shall in no way restrict, any Parties’ right or ability to engage in a Change of Control.

     4.7 Co-Selling Rights.

     In the event that in conjunction with one or a series of transactions contemplated by this Article IV, [****] or more of the outstanding equity interest of Sovello are to be transferred to a third party, such transaction or transactions shall not be completed until such third party shall offer and, if such offer is accepted, agree to acquire the remaining outstanding equity interests of Sovello.

     4.8 Adherence by Third Party.

     No third party shall become a shareholder in Sovello unless such third party signs a deed of adherence to the rights and obligations imposed by Article IV, Article V, Sections 8.5 through 8.10 and Article IX. Such deed of adherence shall be in a form acceptable by the Parties. All Parties hereby grant power of attorney to the chairman of the supervisory board of Sovello, from time to time, to accept such deed of adherence

     4.9 Drag along — right and relation to Articles of Association.

     If one or more shareholders who jointly own more than [****] of the registered share capital in Sovello sell and transfer all of their shares at full market value to an unrelated third party, they can demand in writing that the other shareholder or shareholders sell and transfer all (but not less than all) of their shares under the same conditions. The obligation of the minority shareholders is subject to the condition precedent that, prior to such sale and transfer, they have been offered to acquire all of the shares of the majority shareholders under the same conditions. If one or more shareholders who jointly own more than [****] of the shares in Sovello sell and transfer all of their shares at full market value to an unrelated third party, the minority shareholders can demand that their shares are sold under the same terms conditions. The procedure laid down in Sections 4.2 through 4.5 above also applies to this offer to the minority shareholders. This Article IV does not alter any provision or provisions contained in the Articles of Association restricting the transfer of shares. However, the Parties shall exercise all voting and other rights available to them to ensure the implementation of the foregoing provisions of this Article IV and any provisions contained in the Articles of Association restricting transfers of shares are waived or suspended, if applicable, to allow such sales and purchases to proceed as provided above.

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ARTICLE V.

Term and Termination

     5.1 Term.

     The term of this Agreement shall commence on the date hereof and shall continue and remain in full force and effect, until an IPO occurs or this Agreement is terminated in accordance with this Article 5.

     5.2 Termination by mutual consent.

          (a) This Agreement may be terminated by mutual written consent of all Parties.

          (b) In the event of termination pursuant to Section 5.2(a), the consequences of Termination shall be agreed among the Parties in writing, unless the form of a notarial deed is required under German law.

     5.3 Expulsion for Breach.

          (a) Any of the Parties to this Agreement who are not in Material Breach of this Agreement (for purposes of this Section 5.3, each a “Removing Party” and collectively “Removing Parties”) may trigger, pursuant to the terms of this Section 5.3, the repurchase of all shares of Sovello held by such other Party (an “Expulsion”, and the securities subject to such repurchase, “Expulsion Securities”) if the Party subject to Expulsion (the “Breaching Party”) commits a Material Breach of this Agreement or if the Breaching Party becomes subject to a Bankruptcy Event. For the avoidance of doubt, this is an individual right of each Removing Party which is not a Breaching Party.

               (i) If the Breaching Party commits a Material Breach of this Agreement, and if

                    (1) the Material Breach is incurable, the notice of Expulsion (“Expulsion Notice”) must be made in writing not later than [****] after the Removing Party learns about the Material Breach.

                    (2) the Material Breach is curable, the Removing Party has to request such cure in writing, not later than [****] after it learns about the Material Breach, granting the Breaching Party a cure period of another [****]. If the Removing Party fails to cure such Material Breach within the [****] period, the notice of Expulsion must be made in writing not later than [****] days after the expiry of the cure period.

                    (3) For the purposes of this Section 5.3, “Material Breach” is defined as a material breach of this Agreement or any of the Concurrent Agreements that has

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had, or is reasonable likely to have, a material adverse effect on the financial performance or business prospects of Sovello, either in the short-term or the long-term.

               (ii) If the Breaching Party becomes subject to a Bankruptcy Event, the Expulsion Notice must be made in writing not later than [****] after the Removing Party learns about the Bankruptcy Event.

          (b) Within a period of [****] after it has delivered an Expulsion Notice, any Removing Party is entitled to start a process to determine the Fair Market Value of the Expulsion Securities by indicating so to the Breaching Party in writing (the “Valuation Request”). The Valuation Request may be combined with the Expulsion Notice.

          (c) The “Fair Market Value” shall be determined based on the fair market value for [****], and shall be determined as follows:

               (i) If the Expulsion Securities are publicly traded on a national stock market or exchange, the Fair Market Value shall be deemed to be [****].

               (ii) If there is no active public market for the Expulsion Securities, the value shall be the Fair Market Value thereof as determined by good faith negotiation between the Parties. If such negotiation fails to determine the Fair Market Value within [****] after the date of the Valuation Request, the Fair Market Value shall be determined as follows:

                    (1) Each Party shall retain at its expense an independent third party investment bank or M&A advisor with expertise valuing companies such as Sovello.

                    (2) Subject to execution of customary confidentiality agreements by the independent third-party firms, Sovello shall provide or be caused to provide to each firm all material information, including any material changes in such information, reasonably necessary to value Sovello or reasonably requested by the firms. [****]

                    (3) Within [****] after the Valuation Request pursuant to Section 5.3(b) above, each Party shall submit a final valuation proposal, prepared in writing with a supporting analysis by its retained third-party firm, to the other Party and the other Party’s third party firm and to the "Arbitrator.” The “Arbitrator” shall be a Person with expertise in valuing companies in the photovoltaic industry, shall not have a material business relationship with any Party or Sovello and shall be reasonably acceptable to both Parties. If the Parties agree upon a single Arbitrator, the decision of such Arbitrator shall be final and binding on the Parties. If the Parties have not agreed on a single Arbitrator, the Non-Breaching Party or Parties on the one hand and the Breaching Party or Parties on the other hand will each select an Arbitrator satisfying the criteria set forth herein and the selected Arbitrators will select a third. In that case, the decision of a majority of the Arbitrators will control and shall be final and binding on both Parties. In either case, the arbitrator shall submit his decision to the Parties in writing within [****] after receiving the two final valuation proposals.

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                    (4) If one Party does not submit in a timely manner a final valuation proposal, then the valuation proposal of the other Party shall be used to establish the Fair Market Value.

          (d) If an Expulsion is initiated pursuant to Section 5.3 (a), the Removing Party or Parties, notwithstanding any other remedy that they may have pursuant to this Agreement or otherwise under German law, may, within a period of [****] following decision of the Arbitrator pursuant to Section 5.3 (c) (ii) (3), purchase all of the Expulsion Securities legally or beneficially owned by each of the Breaching Parties for a cash amount equal to [****] of the Fair Market Value of such Expulsion Securities (the “Expulsion Call Right”). The Expulsion Call Right must be exercised in writing or in the form required under German law and delivered to each of the Breaching Parties. If there is more than one Removing Party, they are entitled to the Expulsion Call right pro rata to their shareholdings in Sovello. If one Removing Party does not exercise this right at all or not in full, the other Removing Party is entitled to purchase the remaining shares as well.

          (e) The closing of any purchase and sale of Expulsion Securities shall take place at the office of Sovello within [****] of the exercise of the Expulsion Call Right. At such closing, the aggregate purchase price for such purchase and sale shall be paid in cash or other immediately available funds in exchange for the Expulsion Securities to be sold.

          (f) Promptly upon receiving notice by a Removing Party of its exercise of its rights pursuant to Section 5.3(a), the Breaching Party shall take such actions, and cause its Affiliates to take such actions, as may be necessary to enable the Removing Party to consummate its rights.

          (g) Continuation of Business. Subject to Section 5.3 (i), during any period in which a Party has the right to purchase or is purchasing the Securities of the other Party pursuant to this Section 5.3, Sovello shall continue its business in the ordinary course. The Parties and Sovello shall use their reasonable best efforts to maintain and preserve the business of Sovello pending the consummation of such purchase.

          (h) In each case of Expulsion according to Section 5.3 (a), each Party shall have the right to demand that all Parties hold a Shareholders’ meeting of Sovello without undue delay and vote in favor of the dissolution and winding up of Sovello in accordance with applicable law and the Articles of Association, if either (i) all of the Removing Parties waive their rights under Section 5.3(d) in writing or (ii) none of the Removing Parties has exercised such rights within the [****] period specified in Section 5.3(d), unless the Breaching Party has offered to purchase the Shares of all of the Removing Parties at [****], has demonstrated to the Removing Parties’ satisfaction that it can complete and provide payment for the shares within [****] of such offer, and the Removing Parties have elected to sell their Shares to the Breaching Party.

          (i) If the applicable Expulsion Call Right is exercised, the Parties shall cause the Concurrent Agreements to remain in full force and effect. The Parties shall cause the Concurrent

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          Agreements to be terminated if the Parties proceed to dissolution of Sovello, as provided in (h) above (on the effective date of dissolution).

          (j) In the event of any Expulsion pursuant to this Section 5.3 and except as otherwise set forth in this Agreement, this Agreement shall cease to have further force or effect on the Breaching Party, provided that this event shall not release any Party from any liability or obligation which has already accrued as of the effective date of such event, and shall not constitute a waiver or release of, or otherwise be deemed to prejudice or adversely affect, any rights, remedies or claims, whether for damages or otherwise, which a Party may have hereunder, at law, equity or otherwise or which may arise out of or in connection with such event. This Agreement shall remain in full force and effect among the Removing Parties.

          (k) Without limiting any other remedies that may be available to any Removing Party under this Agreement (but, for the avoidance of doubt, not under Section 5.3. (a) through (j)) or under German law, in the event of a Material Breach pursuant to Section 5.3(a)(i)(3)(B) in lieu of terminating this Agreement as provided in this Section 5.3, the Removing Parties may, after the expiration of any cure period applicable with respect to such Material Breach, upon written notice to Sovello and the Breaching Party, cause the Percentage Interest of the Breaching Party to be reduced to reflect the relative capital contributions of the Parties actually contributed, in which case the Shares held by the Parties shall be correspondingly adjusted to reflect the Percentage Interests, as adjusted pursuant to this Section 5.3(k). The Breaching Party is obliged, to the extent required to obtain the result contemplated by this Section 5.3(k), to transfer such share(s) to the Non-Breaching Parties free of charge and pro rata to their shareholdings in Sovello.

     5.4 Termination after [****].

          (a) Any Party may terminate this Agreement with [****] written notice to the other Parties anytime time following [****].

          (b) If this Agreement is terminated pursuant to Section 5.4 (a) by one Party, the other Parties may purchase, pro rata to their shareholding in Sovello at the date of termination, the terminating party’s Percentage Interest in Sovello of [****] (the “Termination Call Right”).

          (c) Section 5.3 (b) through (j) shall apply correspondingly, provided, however, that the period to exercise the Termination Call Right is extended to [****] following decision of the Arbitrator pursuant to Section 5.3. (c) (ii) (3).

     5.5 Termination in Case of Sale and Transfer

     If one Party (the “Transferring Party”) transfers all of the Shares beneficially owned by it to the other Parties, any Concurrent Agreements to which such Transferring Party is a party shall survive in accordance with their respective terms.

     5.6 Post-Termination Covenants.

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          (a) Return of Confidential Information. Upon the termination of this Agreement, each Party, at its own cost, shall promptly return to the Disclosing Party any and all documents and materials constituting or containing Confidential Information of the Disclosing Party which are in its possession or control, or at its option, shall destroy such documents and materials and certify such destruction in writing to the Disclosing Party.

          (b) Survival of Rights and Obligations. The rights and obligations of the Parties under Articles / Sections V, VI, VII, 8.2, 8.3, 8.4, 8.5, 8.7 and IX shall survive any termination of this Agreement.

          (c) Sovello shall be entitled to enforce any agreement to which it is a party unless such agreement is terminated in accordance with its terms or this Article V.

ARTICLE VI.

Warranties.

Each Party hereby warrants in the form of an independent no fault guarantee (rechtlich selbstaendiges verschuldensunabhaengiges Garantieversprechen) within the meaning of Sec. 311 paragraph (1) German Civil Code (Buergerliches Gesetzbuch) to each of the other Parties as follows:

Intellectual Property. To the extent required to execute and consummate this Agreement and the Concurrent Agreements or except as would not materially impair it’s ability to perform its obligations hereunder and thereunder, no contracts, licenses or agreements to which it is a party (including, without limitation, this Agreement and the existing License Agreement and the transactions contemplated herein and therein) or, to its knowledge, by operation of law, will:

                    (i) Result in Sovello or any of the Parties being bound by, or subject to, any non-compete, exclusivity restriction or other restriction on the operation or scope of its businesses; or

                    (ii) Result in Sovello or any of the Parties being obligated to pay any royalties or other amounts to any Third Party.

                    (iii) Grant to any Third-Party any right to or with respect to any Intellectual Property owned by, or licensed to, Sovello or any of the Parties.

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ARTICLE VII.

Liability and Limitations of Liability

     7.1 Liability.

In the event of a breach of any of the Warranties given by any of the Parties (the “Indemnifying Party”) in Article VI or in that Party’s License Agreement (subject to the limitations and expiration of liability for such Warranties as set forth in the License Agreements), the other Parties and Sovello, each individually, shall have the right to request in writing that the Indemnifying Party puts Sovello in the position that it would have been in, had there been no breach of Warranty. If, within eight weeks of such a request, the Indemnifying Party has not complied with the request, or if such remedy is impossible, the Indemnifying Party shall indemnify Sovello in cash. If Sovello has become insolvent as a result of such breach, or in the case and to the extent that the other Parties have suffered a damage in excess or outside of the loss in value of their respective holding in Sovello, the other Parties shall have the right to request in writing that the Indemnifying Party indemnifies the other Parties in cash. For the avoidance of doubt: The Indemnifying Party will not be obligated to double compensate the same loss to either of the other Parties and Sovello.

     7.2 Definitions.

All of the claims described in Section 7.1 above shall be referred to as the “Indemnifiable Claims.” Any party seeking such indemnification is hereafter referred to as an “Indemnified Party”.

     7.3 Determination of the Amount of Damage.

          (a) For the purpose of this Article 7, the damage shall consist of the amount necessary to cure any event or set of facts causing such Warranty to be breached or the loss in value of Sovello caused by such breach, whichever amount is higher.

          (b) In case of dispute, the amount of such damage (but for the avoidance of doubt, not the existence of a breach) shall be determined by an expert arbitrator (“Schiedsgutachter”). The expert arbitrator shall be a partner of an internationally recognized accounting firm. If the Parties cannot agree on the selection of such expert arbitrator within two weeks after receipt of a request to appoint such arbitrator, the appointment shall be made by the President of the Chamber of Industry and Commerce of Berlin. The decision of such arbitrator shall be final and binding on the Parties and Sovello. The costs of such arbitrator shall be borne by the Indemnifying Party and the Indemnified Party respectively in proportion to their relative success according to the determination delivered by the expert arbitrator who shall also determine such proportion.

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     7.4 Limitations of Liability for Breach of Warranties.

          (a) Each Indemnifying Party shall (in all cases) only be liable for breach of Warranties under Article 6 to an Indemnified Party in respect of a claim if the aggregate amount of all claims for which the relevant Indemnifying Party would otherwise be liable under this Agreement to the relevant Indemnified Party exceeds EUR [****] (in which case, however, the relevant Indemnified Party shall be entitled to claim the total amount of such claims and not merely the excess above said EUR [****]).

          (b) In the case that a warranty relating to Intellectual Property is breached, including, without limitation, warranties under the License Agreements, the period of limitation (Verjaehrungsfrist) expires one year after the termination of this Agreement.

     7.5 GENERAL LIMITATION OF LIABILITY.

EACH PARTY SHALL (IN ALL CASES) ONLY BE LIABLE TO THE OTHER PARTIES OR SOVELLO TO THE EXTENT THAT THE AGGREGATE AMOUNT OF ITS LIABILITY FOR ALL CLAIMS OF WHATSOEVER NATURE MADE UNDER THIS AGREEMENT AND THE LICENSE AGREEMENTS IS LIMITED TO EUR [****], PROVIDED, HOWEVER, THAT THE LIMITATIONS SET FORTH IN THIS SECTION 7.5 SHALL NOT APPLY IN THE CASE OF FRAUD OR WILLFUL INTENT.

ARTICLE VIII.

Additional Agreements

     8.1 Marketing.

Considering the existing Amended and Restated Sales Representative Agreement dated as of October 6, 2008 between E and Sovello, except as otherwise agreed by E and Sovello, the Parties shall not interfere with Sovello’s ability to directly market its output of Wafers, Cells and Modules; provided each Party acknowledges that each of Q, REC and E may market and sell Wafers, Cells or Modules and that this Section 8.1. shall not be construed to limit any Party ´s ability to conduct its business and in doing so compete with Sovello for customers for Wafers, Cells or Modules.

     8.2 Q Manufacturing Right of First Refusal.

          (a) During the term of this Agreement and only for so long as E remains a shareholder of Sovello, whenever E or Affiliates (and references to E in this section 8.2 are deemed to include E Affiliates) wishes to form an Alternative Venture [****], E will first offer Q a right of first refusal with respect to participation in such [****] pursuant to the provisions of Section 8.2(b) and (c).

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          (b) In the event that E determines to pursue the formation of an [****], E shall deliver written notice to Q, offering Q the right of first refusal to participate in any such [****], which notice shall refer to this section of this Agreement and, subject to Q entering into a confidentiality agreement reasonably satisfactory to E with respect to the existence of the notice and the subject matter thereof, provide a description of the general framework of the [****], including without limitation the proposed purpose and business objectives of the [****] and the contributions proposed to be required of the parties to the [****] (the “E First Refusal Notice”). Upon the receipt of E First Refusal Notice, Q shall have [****] to confirm in writing to E that it wishes to commence negotiations relating thereto (the “Q Confirmation Notice”). Upon E’s receipt of the Q Confirmation Notice, E and Q shall commence negotiations in good faith regarding the terms and conditions of an agreement concerning the [****]. The parties will negotiate in good faith for not less than [****], and upon mutual agreement, the negotiation period may be continued as long as necessary or productive.

          (c) If the parties execute a definitive agreement concerning the [****], then the parties will be bound by such agreement. If a definitive agreement is not executed within [****] after the initial [****] negotiation period, then either party, upon written notice to the other, may end negotiations. Upon the end of negotiations (or, alternatively, if Q did not provide the Q Confirmation Notice within [****] after receipt of the E First Refusal Notice), the applicable right of first refusal shall have no further effect and, without limiting the foregoing, E may enter into an [****] with a Third Party within the parameters of the general framework set forth in the E First Refusal Notice. The final conditions may not be materially more favorable to the Third Party, taken as a whole, than the last conditions offered to Q (and if in fact more favorable, Q may elect to enter into that [****] on those terms in lieu of the Third Party). Q shall not have any obligation to agree to any terms which are unique to the third party. The final agreement with the Third Party is to be submitted promptly to a person nominated by Q bound by a professional duty of secrecy (Berufsverschwiegenheit).

          (d) For the avoidance of doubt: During the term of this Agreement, whenever E wishes to form one or more additional [****] after an E First Refusal Notice has been provided, the procedure pursuant to the provisions of Section 8.2(b) through (c) shall be repeated.

     8.3 REC Manufacturing Right of First Refusal.

          (a) During the term of this Agreement, and only for so long as E shall remains a shareholder of Sovello, whenever E or Affiliates (and references to E in this Section 8.3 are deemed to include E Affiliates) wishes to form an Alternative Venture active [****], E will first offer REC a right of first refusal with respect to participation in such [****] pursuant to the provisions of Section 8.3(b) and (c).

          (b) In the event that E determines to pursue the formation of an [****], E shall deliver written notice to REC, offering REC the right of first refusal to participate in any such [****], which notice shall refer to this section of this Agreement and, subject to REC entering into a confidentiality agreement reasonably satisfactory to E with respect to the existence of the notice and the subject matter thereof, provide a description of the general framework of the

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           [****], including without limitation the proposed purpose and business objectives of the [****] and the contributions proposed to be required of the parties to the [****] (the “E First Refusal Notice”). Upon the receipt of E First Refusal Notice, REC shall have [****] to confirm in writing to E that it wishes to commence negotiations relating thereto (the “REC Confirmation Notice”). Upon E’s receipt of the REC Confirmation Notice, E and REC shall commence negotiations in good faith regarding the terms and conditions of an agreement concerning the [****]. The parties will negotiate in good faith for not less than [****], and upon mutual agreement, the negotiation period may be continued as long as necessary or productive.

          (c) If the parties execute a definitive agreement concerning the [****], then the parties will be bound by such agreement. If a definitive agreement is not executed within [****] after the initial [****] negotiation period, then either party, upon written notice to the other, may end negotiations. Upon the end of negotiations (or, alternatively, if REC did not provide the REC Confirmation Notice within [****] after receipt of the E First Refusal Notice), the applicable right of first refusal shall have no further effect and, without limiting the foregoing, E may enter into an [****] with a third party within the parameters of the general framework set forth in the E First Refusal Notice. The final conditions may not be materially more favorable to the third party, taken as a whole, than the last conditions offered to REC (and if in fact more favorable, REC may elect to enter into that [****] on those terms in lieu of the third party). REC shall not have any obligation to agree to any terms which are unique to the third party. The final agreement with the third party is to be submitted promptly to a person nominated by REC bound by a professional duty of secrecy (Berufsverschwiegenheit).

          (d) For the avoidance of doubt: During the term of this Agreement, whenever E wishes to form one or more additional [****] after an E First Refusal Notice has been provided, the procedure pursuant to the provisions of Section 8.3(b) through (c) shall be repeated.

          (e) REC shall not be entitled to exercise or otherwise avail itself of the rights set forth in this Section 8.3 if REC or SGS materially breaches any continuing supply agreement with E or Sovello.

     8.4 Relation of Sections 8.2 and 8.3.

If an Alternative Venture falls under both Section 8.2 and Section 8.3 and both Q and REC submit their respective Confirmation Notice, the Parties shall commence three partite negotiations. Unless agreed otherwise between Q and REC, such part of the Alternative Venture that shall not remain with E shall be offered to Q and REC [****].

     8.5 [****].

During the term of this Agreement, and for a period of [****] after its expiration or termination, neither Q nor REC shall, directly or indirectly, engage in a [****].

          (a) Subject to Section 8.5(c) below, [****].

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          (b) [****]

          (c) The covenants contained in Section 8.5(a) shall be construed as a series of separate covenants, one for each county, city, state and country of the geographic scope. Except for geographic coverage, each such separate covenant shall be deemed identical in terms to the covenant contained in Section 8.5(a). If, in any judicial proceeding, a court refuses to enforce any of such separate covenants (or any part thereof), then such unenforceable covenant (or such part) shall be eliminated from this Agreement to the extent necessary to permit the remaining separate covenants (or portions thereof) to be enforced. In the event that the provisions of this Section 8.5 are deemed to exceed the time, geographic or scope limitations permitted by applicable law, then such provisions shall be reformed to the maximum time, geographic or scope limitations, as the case may be, permitted by applicable laws.

          (d) Each Party agrees that if it breaches any provision of this Section 8.5, the other Party shall be entitled to, in addition to any other right or remedy otherwise available to it, an injunction from a German court restraining such breach or threatened breach and to seek specific performance of any such provision of this Section 8.5.

          (e) If Q or REC wish to engage in a [****] not incorporating deposition of a wafer on a substrate, they will need the prior written approval of E which approval shall not be unreasonably withheld if the envisaged [****] employs a technology that is, from a jointly appointed independent expert’s point of view, not closely related to the technology employed by E.

     8.6 Cooperation to Pursue Tax Efficiencies.

For so long as at least two Parties beneficially own any Shares, such Parties shall and shall cause their Affiliates to assist each other and Sovello to pursue any and all tax efficiencies available to:

          (a) Sovello in the operation of its business; and

          (b) the other Parties as shareholders of Sovello; provided that neither Party shall be required to expend any monies or incur any cost or liability in connection therewith.Without limiting the foregoing, the Parties expressly agree that at the discretion of E, the Parties shall cause Sovello, to the extent legally permissible, to make an election under Treas. Reg. Section 1.7701-3(c) to be treated as a partnership for U.S. federal income tax purposes and no Party shall take any action inconsistent with such election, so long as such election neither alters the fundamental agreements of the Parties or otherwise adversely affects Q or REC or Sovello.

     8.7 Confidentiality.

          (a) Definition. “Confidential Information” means any information: (i) disclosed by one Party (the “Disclosing Party”) to any other Party (the “Receiving Party”), which, if in written, graphic, machine-readable or other tangible form is marked as “Confidential” or “Proprietary”, or which, if disclosed orally or by demonstration, is identified at the time of

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           initial disclosure as confidential and reduced to writing and marked “Confidential” within [****] of such disclosure; or (ii) which is otherwise referred to as Confidential Information under this Agreement or any License Agreement.

          (b) Confidential Information and Exclusions. Notwithstanding Section 8.5(a) (Definition) above, Confidential Information shall exclude information that: (i) was independently developed by the Receiving Party without using any of the Disclosing Party’s Confidential Information; (ii) becomes known to the Receiving Party, without restriction, from a source other than the Disclosing Party that had a right to disclose it; (iii) was in the public domain at the time it was disclosed or becomes in the public domain through no act or omission of the Receiving Party; or (iv) was rightfully known to the Receiving Party, without restriction, at the time of disclosure.

          (c) Confidentiality Obligation. The Receiving Party shall treat as confidential all of the Disclosing Party’s Confidential Information and shall not use such Confidential Information except as expressly permitted under this Agreement or a License Agreement or in connection with Sovello’s activities. Without limiting the foregoing, the Receiving Party shall use at least the same degree of care that it uses to prevent the disclosure of its own confidential information of like importance, but in no event with less than reasonable care, to prevent the disclosure of the Disclosing Party’s Confidential Information, subject to Section 8.7(d) (Legal Disclosure) below.

          (d) Legal Disclosure. Notwithstanding anything herein to the contrary, a Receiving Party has the right to disclose Confidential Information without the prior written consent of the Disclosing Party: (i) as required by any court or other Governmental Authority, or by any stock exchange the shares of any Party are listed on; (ii) as otherwise required by law, or (iii) as advisable or required in connection with any government or regulatory filings, including without limitation, filings with any regulating authorities covering the relevant financial markets. If a Receiving Party believes that it will be compelled by a court or other authority to disclose Confidential Information of the Disclosing Party, it shall give the Disclosing Party prompt written notice so that the Disclosing Party may take steps to oppose such disclosure.

          (e) Remedies. If a Receiving Party breaches any of its obligations under this Section 8.7, the Disclosing Party shall be entitled to seek equitable relief to protect its interest therein, including injunctive relief, as well as money damages.

          (f) General Knowledge. The Receiving Party shall have no obligation to limit or restrict the assignment of its employees or consultants as a result of their having had access to the Disclosing Party’s Confidential Information. The restrictions regarding Confidential Information shall not be construed to limit any Party’s right to independently develop or acquire products, processes or concepts without use of the Disclosing Party’s Confidential Information, even if similar. Furthermore, notwithstanding the restrictions regarding Confidential Information, the Receiving Party shall be free to use for any purpose the general knowledge resulting from access to work with or exposure to the Disclosing Party’s Confidential Information, provided that the Receiving Party shall maintain the confidentiality of the Confidential Information as provided

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           herein. The term “general knowledge” means information in non-tangible form which may be retained by persons who have had access to Disclosing Party’s Confidential Information, including ideas, concepts, know-how or techniques contained therein.

     8.8 Reasonable Efforts.

Subject to the terms and conditions provided in this Agreement, all Parties shall each use commercially reasonable efforts to take promptly, or cause to be taken, all actions, and to do promptly, or cause to be done, all things necessary, proper or advisable under applicable Laws and regulations to consummate and make effective the transactions contemplated hereby, to obtain all necessary waivers, consents and approvals and to effect all necessary registrations and filings and to remove any injunctions or other impediments or delays, legal or otherwise, in order to consummate and make effective the transactions contemplated by this Agreement for the purpose of securing to the other the benefits contemplated by this Agreement.

     8.9 Standstill.

          (a) For a period commencing with the date hereof and [****], neither Q nor any of its agents shall, without the prior written consent of E or its board of Directors: acquire, offer to acquire, or agree to acquire, directly or indirectly, by purchase or otherwise, any voting securities or direct or indirect rights to acquire any voting securities of E or any subsidiary thereof, or of any successor to or person in control of E, or any assets of E or any subsidiary or division thereof or of any such successor or controlling person; make, or in any way participate, directly or indirectly, in any “solicitation” of “proxies” to vote (as such terms are used in the rules of the Securities and Exchange Commission (“SEC”)), or seek to advise or influence any person or entity with respect to the voting of any voting securities of E; make any public announcement with respect to, or submit a proposal for, or offer of (with or without conditions) any extraordinary transaction involving E or any of its securities or assets; form, join or in any way participate in a “group” as defined in Section 13(d)(3) of the Exchange Act, in connection with any of the foregoing; otherwise act or seek to control or influence the management, Board of Directors or policies of E; take any action that could reasonably be expected to require E to make a public announcement regarding the possibility of any of the events described in this Section 8.9; or request E or any of its agents, directly or indirectly, to amend or waive any provision of this Section 8.9.

          (b) The restrictions in this Section 8.9 shall apply, mutatis mutandis,

                    (i) to E and its agents regarding any transactions in any voting securities of Q and / or REC, and

                    (ii) to Q and its agents regarding any transactions in any voting securities of REC.

                    (iii) to REC and its agents regarding any transactions in any voting securities of E and / or Q.

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ARTICLE IX.

Miscellaneous

     9.1 Expenses.

Except as specifically provided for in this Agreement, each of the Parties shall bear its respective expenses, costs and fees (including attorneys’ fees) in connection with the transactions contemplated hereby, including the preparation, execution and delivery of this Agreement and the Concurrent Agreements and compliance herewith and therewith, whether or not the transactions contemplated hereby or thereby shall be consummated. However, the costs related to (i) the Sovello representation in the preparation, execution and delivery of this Agreement and the Concurrent Agreements and compliance herewith and therewith and (ii) notarization and registration of the conversion shall be borne by Sovello.

     9.2 Further Assurances.

If, at any time after the Closing Date, any further action is necessary or desirable to carry out the purposes of this Agreement or to vest Sovello with full right, title and possession to all assets, property, rights, privileges, powers and franchises contemplated by this Agreement, each Party will and will cause its Affiliates to take all such lawful and necessary action, so long as such action is consistent with this Agreement.

     9.3 Notices.

All notices, requests, demands, waivers and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered personally, (b) sent by next-day or overnight mail or delivery or (c) sent by facsimile, as follows:

As to E, Inc.:	Evergreen Solar, Inc.
	138 Bartlett Street
	Marlboro, MA 01752 USA
	Attention:	Richard Feldt
		Richard Chleboski
		Christian Ehrbar
	Phone:+1 508 597 4479
	Fax: +1 508 2299 7722

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with a copy to:	Taylor Wessing Partnerschaftsgesellschaft
	Ebertstraße 15
	D-10117 Berlin
	Attention:	Philipp von Alvensleben
		Marc Oliver Kurth
	Phone: 49 30 885636 0
	Fax: 49 30 885636 100
As to Q:	Q-Cells SE
	Guardianstr. 16
	OT Thalheim
	D-06766 Bitterfeld-Wolfen, Germany
	Attention:	Anton Milner
		Dr. Hartmut Schuening
	Phone: +49-34 94-66 99- 10 100
	Fax: +49-34 94-66 99-10 000
with a copy to:	VAN AUBEL Rechtsanwaelte
	Kurfürstendamm 57
	D-10707 Berlin, Germany
	Attention:	Dr. Thomas van Aubel
	Phone: +49-30-31 51 90 0
	Fax: +49-30-31 51 90 90
As to REC:	Renewable Energy Corporation
	Kjørboveien 29,
	NO-1337 Sandvika, Norway
	Attention:	John Andersen
		Christopher Groth
	Phone: + 47 67 57 44 50
	Fax: + 47 67 57 44 99
As to Sovello:	Sovello AG
	Sonnenallee 14-16
	OT Thalheim
	D-06766 Bitterfeld-Wolfen, Germany
	Attention:	Ted Scheidegger
		Katja Raschke
	Phone: +49-34 94-66 64- 1010
	Fax: +49-34 94-66 64-1011

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or, in each case, at such other address as may be specified in writing to the other parties hereto.

     All such notices, requests, demands, waivers and other communications shall be deemed to have been received (w) if by personal delivery on the day delivered, (x) if by next-day or overnight mail or delivery, on the day delivered, or (y) if by facsimile, on the day on which such facsimile was sent; provided that the Party providing notice pursuant to facsimile shall have received a confirmation of receipt of such facsimile transmission.

     9.4 Governing Law and Dispute Resolution.

          (a) This Agreement shall be construed in accordance with and governed by the laws of the Federal Republic of Germany.

          (b) The Parties shall try to settle any disputes by way of mediation.

          (c) All disputes arising in connection with this Agreement or its validity which cannot be resolved by mutual agreement of the Parties or mediation shall be finally settled in accordance with the Arbitration Rules of the German Institution of Arbitration e.V. (DIS) without recourse to the ordinary courts of law (except for challenges to the validity of shareholder resolutions which shall be submitted to the competent courts). The place of arbitration is Berlin, Germany. The arbitral tribunal consists of three arbitrators. The arbitrators must be capable of being appointed a judge in accordance with the relevant German legal rules. The substantive law of the Federal Republic of Germany is applicable to the dispute. The language of the arbitral proceedings is English.

     9.5 Binding Effect.

This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective heirs, successors and permitted assigns.

     9.6 Assignment.

Other than as expressly otherwise provided herein, this Agreement shall not be assignable or otherwise transferable by any Party hereto without the prior written consent of all the other parties hereto, and any purported assignment or other transfer without such consent shall be void and unenforceable; provided, however, that any Party may assign this Agreement:

          (a) to any of its Affiliates so long as it will be made at the same time as a transfer of its Shares to such Affiliate specifically permitted by this Agreement;

          (b) in connection with the sale by a Party of all of the Shares beneficially owned by such Party as specifically provided by this Agreement, including by way of the Change of Control of such Party.

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          (c) For the avoidance of doubt, no Party shall be obligated to obtain the consent of any other Party (under this Section 9.6) solely by virtue of a Change of Control of such Party.

     9.7 No Third Party Beneficiaries.

Except as specifically provided by this Agreement, nothing in this Agreement shall confer any rights upon any Third Party.

     9.8 Foreign Corrupt Practices Act.

          (a) The Parties recognize that the United States Foreign Corrupt Practices Act of 1977 (the “Act”) shall be applicable to Sovello, its Affiliates and its designated Directors, officers and personnel in Sovello, even if Sovello does not conduct any business in the United States of America. The Parties recognize that the Act prohibits the payment or giving of anything of value either directly or indirectly to a government official for the purpose of influencing an act or decision in his or her official capacity, or for the purpose of inducing him or her to use his or her influence with his or her government to assist a company in obtaining or retaining business for or with, or directing business to, any Person.

          (b) Each Party shall each use its reasonable best efforts to ensure that no part of Sovello capital or other funds will be accepted or used by the Company for any purpose, nor will it take any action, which would constitute a violation of any law of the various jurisdictions in which it conducts business or of the Act.

     Should either Party ever receive, directly or indirectly, a request that any of them believes will or might constitute a violation of the Act, it shall immediately notify the Supervisory Board of Sovello.

     9.9 Sarbanes-Oxley and Nasdaq Covenant.

To the extent legally permissible, the Parties shall cause Sovello to perform such acts as any of the Parties shall request as reasonably necessary to permit such Party to comply with all Laws and regulations applicable to companies in general and publicly reporting companies in particular including but not limited to: (i) the Exchange Act and the Securities Act and the rules of the SEC promulgated thereunder; (ii) the Sarbanes-Oxley Act of 2002 and the rules and regulations of the SEC promulgated thereunder; (iii) the Nasdaq Marketplace Rules; (iv) similar laws, regulations or rules under European, German or Norwegian law. Without limiting the foregoing, the Parties shall recommend to the Supervisory Board to cause Sovello to establish, maintain, adhere to and enforce a system of internal accounting controls which are effective in providing assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with US GAAP.

     9.10 Amendment, Waivers.

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No amendment, modification or discharge of this Agreement, and no waiver hereunder, shall be valid or binding unless set forth in writing and duly executed by each of E, Q and REC.

     9.11 Entire Agreement.

This Agreement amends and restates in its entirety the Existing MJVA and constitutes the entire agreement and supersedes all prior agreements and understandings both written and oral, between or among any of the Parties with respect to the subject matter hereof.

     9.12 No Joint Venture or Partnership.

Notwithstanding anything contained in this Agreement or the Concurrent Agreements to the contrary, including the use of the terms “joint venture” and similar terms, nothing contained in this Agreement or the Concurrent Agreements is intended to, or shall be deemed to, create a partnership or joint venture relationship among the Parties or any of their Affiliates for any purpose, including tax purposes. The Parties shall hold individual shares in Sovello. There shall be no joint ownership of such shares. Neither of the Parties nor any of the Affiliates will take a position contrary to the foregoing.

     9.13 Language for Joint Venture and this Agreement.

All agendas, notices, other documentation relating to (i) Sovello’s interaction with the Parties, (ii) documentation provided to the Parties and (iii) interaction between the Shareholders, including without limitation this Agreement, meetings of the Supervisory Board and the Shareholders of Sovello, and Sovello’s financial statements, shall be prepared in and entered into the English language. In the event of any dispute concerning the construction or meaning of this Agreement, the text of the Agreement as written in the English language shall prevail over any translation of this Agreement that may have been or will be made.

     9.14 Voting and other rights.

Each of the Parties shall join with the other Party in exercising all voting rights and other rights and powers of control as are respectively available to them in relation to Sovello and their beneficial shareholdings therein under the Articles of Association for the time being in force and shall each take or refrain from taking all other appropriate action within their respective powers so as to procure that at all times during the subsistence of this Agreement all provisions concerning the structure and organisation of Sovello and the regulation by the Parties of its affairs set out in this Agreement are duly observed and given full force and effect and all actions required of the Parties are carried out in a timely manner. Respecting the statutory independence of the Supervisory Board and as far as permitted by German Law the Parties shall cause Sovello to be managed and supervised in accordance with the provisions of the Articles of Association, the Rules of Procedure for the Management Board and this Agreement.

     9.15 Severability.

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In the event that any term, condition or provision of this Agreement is held to be or become invalid or be a violation of any applicable Law, statute or regulation, the same shall be deemed to be deleted from this Agreement and shall be of no force and effect and the Agreement shall remain in full force and effect as if such term, condition or provision had not originally been contained in this Agreement. The validity and enforceability of the other provisions shall not be affected thereby. In such case or in the event that this Agreement should have a gap, the Parties hereto shall agree on a valid and enforceable provision completing this Agreement, coming as close as possible to the economic intentions of the Parties. In the event of a partial invalidity (Teilnichtigkeit) the Parties agree that this Agreement shall remain in force without the invalid part. This shall also apply if parts of this Agreement are partially invalid (teilnichtig).

     9.16 Condition precedent.

This Agreement becomes effective and will replace the Existing MJVA immediately upon the registration of the renaming and conversion of EverQ GmbH to Sovello at the commercial register at the local court of Stendal.

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     IN WITNESS WHEREOF, the undersigned duly authorized representatives of the Parties have executed this Agreement as of the date first referenced above.

Evergreen Solar, Inc.			Q-Cells SE
By:	/s/ Michael El-Hillow		By:	/s/ Hartmut Schüning / /s/ Anton Milner
Print name:		Michael El-Hillow	Print name:		Schüning / Milner
Title:	CFO		Title:	CFO/CEO
Date:	11/5/08		Date:	05/11/2008
Renewable Energy Corporation ASA			EverQ GmbH (as the predecessor entity to Sovello AG)
By:	/s/ Erik Thorsen		By:	/s/ H-J Axmann / /s/ C Langden
Print name:		ERIK THORSEN	Print name:		H-J Axmann / C Langden
Title:	CEO		Title:	CTO / CSO
Date:	5 NOVEMBER 2008		Date:	05.11.2008 / 5.11.08

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EX-10.38

Exhibit 10.38

EVERGREEN SOLAR, INC.

AMENDED AND RESTATED
CHANGE OF CONTROL SEVERANCE AGREEMENT

     This Change of Control Severance Agreement (the “Agreement”) is made and entered into by and between Richard M. Feldt (“Executive”) and Evergreen Solar, Inc. (the “Company”), effective as of June 14, 2007 (the “Effective Date”).

RECITALS

     1. It is expected that the Company from time to time will consider the possibility of an acquisition by another company or other change of control. The Board of Directors of the Company (the “Board”) recognizes that such consideration can be a distraction to Executive and can cause Executive to consider alternative employment opportunities. The Board has determined that it is in the best interests of the Company and its stockholders to assure that the Company will have the continued dedication and objectivity of Executive, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined herein) of the Company.

     2. The Board believes that it is in the best interests of the Company and its stockholders to provide Executive with an incentive to continue his employment and to motivate Executive to maximize the value of the Company upon a Change of Control for the benefit of its stockholders.

     3. The Board believes that it is imperative to provide Executive with certain benefits upon a Change of Control and with certain severance benefits upon Executive’s termination of employment following a Change of Control. These benefits will provide Executive with enhanced financial security and incentive and encouragement to remain with the Company notwithstanding the possibility of a Change of Control.

     4. Certain capitalized terms used in the Agreement are defined in Section 7 below.

AGREEMENT

     NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto agree as follows:

     1. Term of Agreement. This Agreement will have a term of three (3) years commencing on the Effective Date. On the third anniversary of the Effective Date, and on each annual anniversary of the Effective Date thereafter, this Agreement automatically will renew for an additional one (1)-year term unless either party provides the other party with written notice of non-renewal at least thirty (30) days prior to the date of automatic renewal.

     2. At-Will Employment. The Company and Executive acknowledge that Executive’s employment is and will continue to be at-will, as defined under applicable law, except as may otherwise be specifically provided under the terms of any written formal employment agreement

between the Company and Executive (an “Employment Agreement”). If Executive’s employment terminates for any reason, including (without limitation) any termination not set for in Section 4 hereof, Executive will not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement or under Executive’s Employment Agreement.

     3. Acceleration of Vesting on Change of Control. Upon the consummation of a Change of Control (i) all of Executive’s outstanding equity awards, including without limitation stock options and restricted stock, will immediately vest and become exercisable or become released from the Company’s repurchase or reacquisition right and (ii) all performance targets for all of Executive’s performance-based equity awards will be deemed fully achieved.

     4. Severance Benefits.

          (a) Termination without Cause or Resignation for Good Reason in Connection with a Change of Control. If the Company or its Affiliates terminate Executive’s employment with the Company or its Affiliates, respectively, without Cause or Executive resigns from such employment for Good Reason within twelve (12) months following a Change of Control, then Executive will receive the following severance from the Company beginning 60 days after termination of employment, or such earlier date after termination as may be determined in the Company’s sole discretion, provided that Executive has executed a separation agreement and release of claims (in a form acceptable to the Company) and, if applicable under the Older Workers Benefit Protection Act, has not revoked such release within the 7-day revocation period after executing it. Failure to return the release within the applicable period specified in the release, or, if applicable, revoking the release within the 7-day revocation period after executing the release, will result in forfeiture of the severance.

               (i) Accrued Compensation. The Company will pay Executive all accrued but unpaid vacation, expense reimbursements, wages, and other benefits due to Executive under any Company-provided plans, policies, and arrangements.

               (ii) Severance Payment. Executive will receive monthly severance payments (less applicable withholding taxes) for eighteen (18) months following Executive’s termination equal to (A) one-twelfth of Executive’s annual base salary as in effect immediately prior to Executive’s termination date or (if greater) at the level in effect immediately prior to the Change of Control, and (B) one-twelfth of Executive’s target bonus for the year of Executive’s termination. Subject to Section 5, the Company will pay the severance payments to which Executive is entitled as salary continuation on the same basis and timing as in effect immediately prior to the Change of Control.

               (iii) Continued Employee Benefits. Executive will receive Company-paid coverage for a period of eighteen (18) months for Executive and Executive’s eligible dependents under the Company’s Benefit Plans.

     For purposes of this Section 4(a), if Executive’s employment with the Company or one of its Affiliates terminates, he will not be determined to have been terminated without Cause, if he continues to remain employed by the Company or one of its Affiliates (e.g., upon transfer from one

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Affiliate to another); provided, however, that the parties understand and acknowledge that any such termination could potentially result in Executive’s ability to resign for Good Reason.

          (b) Voluntary Resignation; Termination for Cause. If Executive’s employment with the Company or its Affiliates terminates (i) voluntarily by Executive (other than for Good Reason within twelve (12) months following a Change of Control) or (ii) for Cause by the Company, then Executive will not be entitled to receive severance or other benefits except for those (if any) as may then be established under the Company’s then existing severance and benefits plans and practices or pursuant to other written agreements with the Company, including, without limitation, any Employment Agreement.

          (c) Disability; Death. If the Company terminates Executive’s employment as a result of Executive’s Disability, or Executive’s employment terminates due to his death, then Executive will not be entitled to receive severance or other benefits except for those (if any) as may then be established under the Company’s then existing written severance and benefits plans and practices or pursuant to other written agreements with the Company, including, without limitation, any Employment Agreement.

          (d) Exclusive Remedy. In the event of a termination of Executive’s employment as set forth in Section 4(a), the provisions of this Section 4 are intended to be and are exclusive and in lieu of any other rights or remedies to which Executive or the Company may otherwise be entitled, whether at law, tort, contract, or in equity. Executive will be entitled to no benefits, compensation or other payments or rights upon termination of employment following a Change of Control other than those benefits expressly set forth in this Section 4.

     5. Code Section 409A.

          (a) Distributions. Notwithstanding anything to the contrary in this Agreement, if Executive is a “specified employee” (as defined in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the final regulations and any guidance promulgated thereunder (“Section 409A”), and as applied according to Company procedures) at the time of Executive’s termination, then only the amounts payable to Executive, if any, pursuant to this Agreement (the “Separation Benefits”) which are exempt from Section 409A because (i) such Separation Benefits will not and could not under any circumstances, regardless of when such termination occurs, be paid later than the fifteenth day of the third month of the Company’s fiscal year following Executive’s termination (the “Short-Term Deferral Limit”) or (ii) such Separation Benefits do not exceed the Involuntary Separation Pay Limit (as defined below), may be made within the first six (6) months following Executive’s termination of employment in accordance with the payment schedule applicable to each such payment or benefit. For these purposes, each severance payment and benefit is hereby designated as a separate payment and will not collectively be treated as a single payment. Any portion of the Separation Benefits not exempt from Section 409A under the Short-Term Deferral Limit and/or in excess of the Involuntary Separation Pay Limit shall accrue and, to the extent such portion of the Separation Benefits would otherwise have been payable within the first six (6) months following Executive’s termination of employment, will become payable, without interest, on the first to occur of the following: (x) the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of Executive’s termination of employment, or (y)

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Executive’s death. All subsequent Separation Benefits, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit.

          (b) Amendment. This provision is intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. The Company and Executive agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Executive under Section 409A.

     6. Excise Tax Gross-Up. In the event that the benefits provided for in this Agreement constitute “parachute payments” within the meaning of Section 280G of the Code and will be subject to the excise tax imposed by Section 4999 of the Code, then Executive will receive (i) a payment from the Company sufficient to pay such excise tax, and (ii) an additional payment from the Company sufficient to pay the federal and state income and employment taxes and additional excise taxes arising from the payments made to the Executive by the Company pursuant to this sentence. Such payments will be made in a lump sum no later than the end of the year following the year in which Executive remits the excise tax. Unless Executive and the Company agree otherwise in writing, the determination of Executive’s excise tax liability, if any, and the amount, if any, required to be paid under this Section 6 will be made in writing by independent auditors selected by the Chairman of (the Compensation Committee (the “Accountants”), whose determination will be conclusive and binding upon Executive and the Company for all purposes. For purposes of making the calculations required by this Section 6, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Executive will furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 6. The Company will bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 6.

     7. Definition of Terms. The following terms referred to in this Agreement will have the following meanings:

          (a) Affiliate. “Affiliate” means the Company and any other parent or subsidiary corporation of the Company, as such terms are defined in Section 424(e) and (f) of the Code.

          (b) Benefit Plans. “Benefit Plans” means plans, policies or arrangements that the Company sponsors (or participates in) and that immediately prior to Executive’s termination of employment provide Executive and/or Executive’s eligible dependents with medical, dental, vision and similar benefits. Benefit Plans do not include any other type of benefit (including, but not by way of limitation, disability, life insurance or retirement benefits). A requirement that the Company provide Executive and Executive’s eligible dependents with coverage under the Benefit Plans will not be satisfied unless the coverage is no less favorable than that provided to executives of the Company at any applicable time during the period Executive is entitled to receive severance pursuant to Section 4. The Company may, at its option, satisfy any requirement that the Company

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provide coverage under any Benefit Plan by (i) reimbursing Executive’s premiums under Title X of the Consolidated Budget Reconciliation Act of 1985, as amended (“COBRA”) after Executive has properly elected continuation coverage under COBRA (in which case Executive will be solely responsible for electing such coverage for his eligible dependents), or (ii) providing coverage under a separate plan or plans providing coverage that is no less favorable, or (iii) by paying Executive a lump-sum payment within 90 days of Executive’s termination of employment which is, on an after-tax basis, sufficient to provide Executive and Executive’s eligible dependents with equivalent coverage under a third party plan that is reasonably available to Executive and Executive’ s eligible dependents.

          (c) Cause. “Cause” will mean:

               (i) A willful failure by Executive to perform Executive’s duties to the Company;

               (ii) A willful act by Executive that constitutes misconduct and that is injurious to the Company;

               (iii) Circumstances where Executive willfully imparts material confidential information relating to the Company or its business to competitors or to other third parties other than as authorized in the course of carrying out Executive’s duties;

               (iv) A material and willful violation by Executive of a federal or state law or regulation applicable to the business of the Company; or

               (v) Executive’s conviction or plea of guilty or no contest to a felony.

     No act or failure to act by Executive will be considered “willful” unless committed without good faith and without a reasonable belief that the act or omission was in the Company’s best interest.

          (d) Change of Control. “Change of Control” means the occurrence of any of the following:

               (i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by, or fifty percent (50%) or more of the fair value of, the Company’s then outstanding voting securities;

               (ii) Any action or event occurring within a one (1)-year period, as a result of which less than a majority of the directors are Incumbent Directors. “Incumbent Directors” will mean directors who either (A) are directors of the Company as of the date hereof, or (B) are elected, or nominated for election, to the Board with the affirmative votes of a majority of the Incumbent Directors at the time of such election or nomination;

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               (iii) The consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or resulting entity, including any parent holding company) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving or resulting entity outstanding immediately after such merger or consolidation; or

               (iv) The consummation of the sale, lease or other disposition by the Company of all or substantially all the Company’s assets.

          (e) Disability. “Disability” will mean that Executive has been unable to perform his Company duties as the result of his incapacity due to physical or mental illness, and such inability, at least twenty-six (26) weeks after its commencement, is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to Executive or Executive’s legal representative (such agreement as to acceptability not to be unreasonably withheld). Termination resulting from Disability may only be effected after at least thirty (30) days’ written notice by the Company of its intention to terminate Executive’s employment. In the event that Executive resumes the performance of substantially all of Executive’s duties hereunder before the termination of Executive’s employment becomes effective, the notice of intent to terminate will automatically be deemed to have been revoked.

          (f) Good Reason. “Good Reason” will mean the occurrence of one or more of the following, without the Executive’s consent:

               (i) A material reduction of Executive’s duties, title, authority or responsibilities in effect immediately prior to a Change of Control;

               (ii) A material reduction in Executive’s base salary;

               (iii) The failure of the Company to obtain the assumption of the Agreement by the successor; or

               (iv) A material change in the geographic location at which Executive must perform services (in other words, the relocation of Executive to a facility or a location more than fifty (50) miles from Executive’s then present location).

Provided, however, that before Executive may resign for Good Reason, (A) Executive must provide the Company with written notice within ninety (90) days of the event that Executive believes constitutes “Good Reason” specifically identifying the acts or omissions constituting the grounds for Good Reason and (B) the Company must have an opportunity within thirty (30) days following delivery of such notice to cure the Good Reason condition.

          (g) Involuntary Separation Pay Limit. “Involuntary Separation Pay Limit” will mean the lesser of two (2) times: (i) Executive’s annualized compensation based upon the annual rate of pay paid to Executive during the Company’s taxable year preceding the Company’s taxable year of Executive’s termination of employment as determined under Treasury Regulation 1.409A-

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1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which Executive’s employment is terminated.

     8. Successors.

          (a) The Company’s Successors. Any successor to the Company (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) or to all or substantially all of the Company’s business and/or assets will assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term “Company” will include any successor to the Company’s business and/or assets which executes and delivers the assumption agreement described in this Section 8(a) or which becomes bound by the terms of this Agreement by operation of law.

          (b) Executive’s Successors. The terms of this Agreement and all rights of Executive hereunder will inure to the benefit of, and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

     9. Notice.

          (a) General. Notices and all other communications contemplated by this Agreement will be in writing and will be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of Executive, mailed notices will be addressed to him at the home address which he most recently communicated to the Company in writing. In the case of the Company, mailed notices will be addressed to its corporate headquarters, and all notices will be directed to the attention of its President.

          (b) Notice of Termination. Any termination by the Company for Cause or by Executive for Good Reason will be communicated by a notice of termination to the other party hereto given in accordance with Section 9(a) of this Agreement. Such notice will indicate the specific termination provision in this Agreement relied upon, will set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and will specify the termination date (which will be not more than thirty (30) days after the giving of such notice).

     10. Arbitration. Executive and the Company agree that any and all disputes arising out of, or relating to, the terms of this Agreement, their interpretation, and any of the matters herein, will be subject to binding arbitration in Middlesex County, Massachusetts before the Judicial Arbitration & Mediation Services (“JAMS”) pursuant to its employment arbitration rules & procedures (“JAMS Rules”). The arbitrator shall administer and conduct any arbitration in accordance with Massachusetts law, including the Massachusetts Code of Civil Procedure, and the arbitrator shall apply substantive and procedural Massachusetts law to any dispute or claim, without reference to any conflict-of-law provisions of any jurisdiction. To the extent that the JAMS Rules conflict with

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Massachusetts law, Massachusetts law will take precedence. The Company and Executive agree that the prevailing party in any arbitration will be entitled to injunctive relief in any court of competent jurisdiction to enforce the arbitration award. The Company and Executive agree that the prevailing party in any arbitration will be awarded its reasonable attorneys’ fees and costs. The Company and Executive hereby agree to waive their right to have any dispute with the other party resolved in a court of law by a judge or jury. This Section 10 will not prevent either party from seeking injunctive relief (or any other provisional remedy) from any court having jurisdiction over the parties and the subject matter of their dispute relating to Executive’s obligations under this Agreement and the agreements incorporated herein by reference.

     11. Miscellaneous Provisions.

          (a) No Duty to Mitigate. Executive will not be required to mitigate the amount of any payment contemplated by this Agreement, nor will any such payment be reduced by any earnings that Executive may receive from any other source.

          (b) Waiver. No provision of this Agreement will be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by Executive and by an authorized officer of the Company (other than Executive). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party will be considered a waiver of any other condition or provision or of the same condition or provision at another time.

          (c) Headings. All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.

          (d) Entire Agreement. This Agreement, together with any Employment Agreement, constitutes the entire agreement of the parties hereto and supersedes in their entirety all prior representations, understandings, undertakings or agreements (whether oral or written and whether expressed or implied) of the parties with respect to the subject matter hereof. Except as provided in Section 5 of this Agreement, no waiver, alteration, or modification of any of the provisions of this Agreement will be binding unless in writing and signed by duly authorized representatives of the parties hereto and which specifically mention this Agreement.

          (e) Choice of Law. The validity, interpretation, construction and performance of this Agreement will be governed by the laws of the State of Massachusetts (with the exception of its conflict of laws provisions). Any claims or legal actions by one party against the other arising out of the relationship between the parties contemplated herein (whether or not arising under this Agreement) will be commenced or maintained in any state or federal court located in the jurisdiction where Executive resides, and Executive and the Company hereby submit to the jurisdiction and venue of any such court.

          (f) Severability. The invalidity or unenforceability of any provision or provisions of this Agreement will not affect the validity or enforceability of any other provision hereof, which will remain in full force and effect.

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          (g) Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable income and employment taxes.

          (h) Counterparts. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

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     IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year set forth below.

COMPANY	EVERGREEN SOLAR, INC.
	By:
		Title:
EXECUTIVE
	Richard M. Feldt
DATE	December 31, 2008

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EX-10.39

Exhibit 10.39

EVERGREEN SOLAR, INC.

AMENDED AND RESTATED
CHANGE OF CONTROL SEVERANCE AGREEMENT

     This Change of Control Severance Agreement (the “Agreement”) is made and entered into by and between                      (“Executive”) and Evergreen Solar, Inc. (the “Company”), effective as of June 14, 2007 (the “Effective Date”).

RECITALS

     1. It is expected that the Company from time to time will consider the possibility of an acquisition by another company or other change of control. The Board of Directors of the Company (the “Board”) recognizes that such consideration can be a distraction to Executive and can cause Executive to consider alternative employment opportunities. The Board has determined that it is in the best interests of the Company and its stockholders to assure that the Company will have the continued dedication and objectivity of Executive, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined herein) of the Company.

     2. The Board believes that it is in the best interests of the Company and its stockholders to provide Executive with an incentive to continue his employment and to motivate Executive to maximize the value of the Company upon a Change of Control for the benefit of its stockholders.

     3. The Board believes that it is imperative to provide Executive with certain benefits upon a Change of Control and with certain severance benefits upon Executive’s termination of employment following a Change of Control. These benefits will provide Executive with enhanced financial security and incentive and encouragement to remain with the Company notwithstanding the possibility of a Change of Control.

     4. Certain capitalized terms used in the Agreement are defined in Section 7 below.

AGREEMENT

     NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto agree as follows:

     1. Term of Agreement. This Agreement will have a term of three (3) years commencing on the Effective Date. On the third anniversary of the Effective Date, and on each annual anniversary of the Effective Date thereafter, this Agreement automatically will renew for an additional one (1)-year term unless either party provides the other party with written notice of non-renewal at least thirty (30) days prior to the date of automatic renewal.

     2. At-Will Employment. The Company and Executive acknowledge that Executive’s employment is and will continue to be at-will, as defined under applicable law, except as may otherwise be specifically provided under the terms of any written formal employment agreement between the Company and Executive (an “Employment Agreement”). If Executive’s employment

terminates for any reason, including (without limitation) any termination not set for in Section 4 hereof, Executive will not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement or under Executive’s Employment Agreement.

     3. Acceleration of Vesting on Change of Control. Upon the consummation of a Change of Control (i) Executive’s outstanding equity awards, including without limitation stock options and restricted stock, will immediately vest and become exercisable or become released from the Company’s repurchase or reacquisition right as to (A) that number of unvested shares that would have vested during the period between the equity awards’ most recent vesting date (or grant date if no vesting date has been reached) and the Change of Control if the equity awards had been granted with a monthly vesting schedule and (B) that number of unvested shares that would have otherwise vested during the last twelve (12) months of each equity awards’ vesting schedule, and (ii) all performance targets for all of Executive’s performance-based equity awards will be deemed fully achieved on the first anniversary of the Change of Control if Executive is employed on such date.

     4. Severance Benefits.

          (a) Termination without Cause or Resignation for Good Reason in Connection with a Change of Control. If the Company or its Affiliates terminate Executive’s employment with the Company or its Affiliates, respectively, without Cause or Executive resigns from such employment for Good Reason within twelve (12) months following a Change of Control, then Executive will receive the following severance from the Company beginning 60 days after termination of employment, or such earlier date after termination as may be determined in the Company’s sole discretion, provided that Executive has executed a separation agreement and release of claims (in a form acceptable to the Company) and, if applicable under the Older Workers Benefit Protection Act, has not revoked such release within the 7-day revocation period after executing it. Failure to return the release within the applicable period specified in the release, or, if applicable, revoking the release within the 7-day revocation period after executing the release, will result in forfeiture of the severance.

               (i) Accrued Compensation. The Company will pay Executive all accrued but unpaid vacation, expense reimbursements, wages, and other benefits due to Executive under any Company-provided plans, policies, and arrangements.

               (ii) Severance Payment. Executive will receive monthly severance payments (less applicable withholding taxes) for twelve (12) months following Executive’s termination equal to (A) one-twelfth of Executive’s annual base salary as in effect immediately prior to Executive’s termination date or (if greater) at the level in effect immediately prior to the Change of Control, and (B) one-twelfth of Executive’s target bonus for the year of Executive’s termination. Subject to Section 5, the Company will pay the severance payments to which Executive is entitled as salary continuation on the same basis and timing as in effect immediately prior to the Change of Control.

               (iii) Equity. All of Executive’s outstanding equity awards, including without limitation stock options and restricted stock, will immediately vest and become exercisable or become released from the Company’s repurchase or reacquisition right.

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               (iv) Continued Employee Benefits. Executive will receive Company-paid coverage for a period of twelve (12) months for Executive and Executive’s eligible dependents under the Company’s Benefit Plans.

     For purposes of this Section 4(a), if Executive’s employment with the Company or one of its Affiliates terminates, he will not be determined to have been terminated without Cause, if he continues to remain employed by the Company or one of its Affiliates (e.g., upon transfer from one Affiliate to another); provided, however, that the parties understand and acknowledge that any such termination could potentially result in Executive’s ability to resign for Good Reason.

          (b) Voluntary Resignation; Termination for Cause. If Executive’s employment with the Company or its Affiliates terminates (i) voluntarily by Executive (other than for Good Reason within twelve (12) months following a Change of Control) or (ii) for Cause by the Company, then Executive will not be entitled to receive severance or other benefits except for those (if any) as may then be established under the Company’s then existing severance and benefits plans and practices or pursuant to other written agreements with the Company, including, without limitation, any Employment Agreement.

          (c) Disability; Death. If the Company terminates Executive’s employment as a result of Executive’s Disability, or Executive’s employment terminates due to his death, then Executive will not be entitled to receive severance or other benefits except for those (if any) as may then be established under the Company’s then existing written severance and benefits plans and practices or pursuant to other written agreements with the Company, including, without limitation, any Employment Agreement.

          (d) Exclusive Remedy. In the event of a termination of Executive’s employment as set forth in Section 4(a), the provisions of this Section 4 are intended to be and are exclusive and in lieu of any other rights or remedies to which Executive or the Company may otherwise be entitled, whether at law, tort, contract, or in equity. Executive will be entitled to no benefits, compensation or other payments or rights upon termination of employment following a Change of Control other than those benefits expressly set forth in this Section 4.

     5. Code Section 409A.

          (a) Distributions. Notwithstanding anything to the contrary in this Agreement, if Executive is a “specified employee” (as defined in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the final regulations and any guidance promulgated thereunder (“Section 409A”), and as applied according to Company procedures) at the time of Executive’s termination, then only the amounts payable to Executive, if any, pursuant to this Agreement (the “Separation Benefits”) which are exempt from Section 409A because (i) such Separation Benefits will not and could not under any circumstances, regardless of when such termination occurs, be paid later than the fifteenth day of the third month of the Company’s fiscal year following Executive’s termination (the “Short-Term Deferral Limit”) or (ii) such Separation Benefits do not exceed the Involuntary Separation Pay Limit (as defined below), may be made within the first six (6) months following Executive’s termination of employment in accordance with the payment schedule applicable to each such payment or benefit. For these purposes, each severance payment and benefit

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is hereby designated as a separate payment and will not collectively be treated as a single payment. Any portion of the Separation Benefits not exempt from Section 409A under the Short-Term Deferral Limit and/or in excess of the Involuntary Separation Pay Limit shall accrue and, to the extent such portion of the Separation Benefits would otherwise have been payable within the first six (6) months following Executive’s termination of employment, will become payable, without interest, on the first to occur of the following: (x) the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of Executive’s termination of employment, or (y) Executive’s death. All subsequent Separation Benefits, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit.

          (b) Amendment. This provision is intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. The Company and Executive agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Executive under Section 409A.

     6. Excise Tax Gross-Up. In the event that the benefits provided for in this Agreement constitute “parachute payments” within the meaning of Section 280G of the Code and will be subject to the excise tax imposed by Section 4999 of the Code, then Executive will receive (i) a payment from the Company sufficient to pay such excise tax, and (ii) an additional payment from the Company sufficient to pay the federal and state income and employment taxes and additional excise taxes arising from the payments made to the Executive by the Company pursuant to this sentence. Such payments will be made in a lump sum no later than the end of the year following the year in which Executive remits the excise tax. Unless Executive and the Company agree otherwise in writing, the determination of Executive’s excise tax liability, if any, and the amount, if any, required to be paid under this Section 6 will be made in writing by independent auditors selected by the Chairman of (the Compensation Committee (the “Accountants”), whose determination will be conclusive and binding upon Executive and the Company for all purposes. For purposes of making the calculations required by this Section 6, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Executive will furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 6. The Company will bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 6.

     7. Definition of Terms. The following terms referred to in this Agreement will have the following meanings:

          (a) Affiliate. “Affiliate” means the Company and any other parent or subsidiary corporation of the Company, as such terms are defined in Section 424(e) and (f) of the Code.

          (b) Benefit Plans. “Benefit Plans” means plans, policies or arrangements that the Company sponsors (or participates in) and that immediately prior to Executive’s termination of

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employment provide Executive and/or Executive’s eligible dependents with medical, dental, vision and similar benefits. Benefit Plans do not include any other type of benefit (including, but not by way of limitation, disability, life insurance or retirement benefits). A requirement that the Company provide Executive and Executive’s eligible dependents with coverage under the Benefit Plans will not be satisfied unless the coverage is no less favorable than that provided to executives of the Company at any applicable time during the period Executive is entitled to receive severance pursuant to Section 4. The Company may, at its option, satisfy any requirement that the Company provide coverage under any Benefit Plan by (i) reimbursing Executive’s premiums under Title X of the Consolidated Budget Reconciliation Act of 1985, as amended (“COBRA”) after Executive has properly elected continuation coverage under COBRA (in which case Executive will be solely responsible for electing such coverage for his eligible dependents), or (ii) providing coverage under a separate plan or plans providing coverage that is no less favorable, or (iii) by paying Executive a lump-sum payment within 90 days of Executive’s termination of employment which is, on an after-tax basis, sufficient to provide Executive and Executive’s eligible dependents with equivalent coverage under a third party plan that is reasonably available to Executive and Executive’ s eligible dependents.

          (c) Cause. “Cause” will mean:

               (i) A willful failure by Executive to perform Executive’s duties to the Company;

               (ii) A willful act by Executive that constitutes misconduct and that is injurious to the Company;

               (iii) Circumstances where Executive willfully imparts material confidential information relating to the Company or its business to competitors or to other third parties other than as authorized in the course of carrying out Executive’s duties;

               (iv) A material and willful violation by Executive of a federal or state law or regulation applicable to the business of the Company; or

               (v) Executive’s conviction or plea of guilty or no contest to a felony.

     No act or failure to act by Executive will be considered “willful” unless committed without good faith and without a reasonable belief that the act or omission was in the Company’s best interest.

          (d) Change of Control. “Change of Control” means the occurrence of any of the following:

               (i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by, or fifty percent (50%) or more of the fair value of, the Company’s then outstanding voting securities;

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               (ii) Any action or event occurring within a one (1)-year period, as a result of which less than a majority of the directors are Incumbent Directors. “Incumbent Directors” will mean directors who either (A) are directors of the Company as of the date hereof, or (B) are elected, or nominated for election, to the Board with the affirmative votes of a majority of the Incumbent Directors at the time of such election or nomination;

               (iii) The consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or resulting entity, including any parent holding company) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving or resulting entity outstanding immediately after such merger or consolidation; or

               (iv) The consummation of the sale, lease or other disposition by the Company of all or substantially all the Company’s assets.

          (e) Disability. “Disability” will mean that Executive has been unable to perform his Company duties as the result of his incapacity due to physical or mental illness, and such inability, at least twenty-six (26) weeks after its commencement, is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to Executive or Executive’s legal representative (such agreement as to acceptability not to be unreasonably withheld). Termination resulting from Disability may only be effected after at least thirty (30) days’ written notice by the Company of its intention to terminate Executive’s employment. In the event that Executive resumes the performance of substantially all of Executive’s duties hereunder before the termination of Executive’s employment becomes effective, the notice of intent to terminate will automatically be deemed to have been revoked.

          (f) Good Reason. “Good Reason” will mean the occurrence of one or more of the following, without the Executive’s consent:

               (i) A material reduction of Executive’s duties, title, authority or responsibilities in effect immediately prior to a Change of Control;

               (ii) A material reduction in Executive’s base salary;

               (iii) The failure of the Company to obtain the assumption of the Agreement by the successor; or

               (iv) A material change in the geographic location at which Executive must perform services (in other words, the relocation of Executive to a facility or a location more than fifty (50) miles from Executive’s then present location).

Provided, however, that before Executive may resign for Good Reason, (A) Executive must provide the Company with written notice within ninety (90) days of the event that Executive believes constitutes “Good Reason” specifically identifying the acts or omissions constituting the grounds for

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Good Reason and (B) the Company must have an opportunity within thirty (30) days following delivery of such notice to cure the Good Reason condition.

          (g) Involuntary Separation Pay Limit. “Involuntary Separation Pay Limit” will mean the lesser of two (2) times: (i) Executive’s annualized compensation based upon the annual rate of pay paid to Executive during the Company’s taxable year preceding the Company’s taxable year of Executive’s termination of employment as determined under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which Executive’s employment is terminated.

     8. Successors.

          (a) The Company’s Successors. Any successor to the Company (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) or to all or substantially all of the Company’s business and/or assets will assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term “Company” will include any successor to the Company’s business and/or assets which executes and delivers the assumption agreement described in this Section 8(a) or which becomes bound by the terms of this Agreement by operation of law.

          (b) Executive’s Successors. The terms of this Agreement and all rights of Executive hereunder will inure to the benefit of, and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

     9. Notice.

          (a) General. Notices and all other communications contemplated by this Agreement will be in writing and will be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of Executive, mailed notices will be addressed to him at the home address which he most recently communicated to the Company in writing. In the case of the Company, mailed notices will be addressed to its corporate headquarters, and all notices will be directed to the attention of its President.

          (b) Notice of Termination. Any termination by the Company for Cause or by Executive for Good Reason will be communicated by a notice of termination to the other party hereto given in accordance with Section 9(a) of this Agreement. Such notice will indicate the specific termination provision in this Agreement relied upon, will set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and will specify the termination date (which will be not more than thirty (30) days after the giving of such notice).

     10. Arbitration. Executive and the Company agree that any and all disputes arising out of, or relating to, the terms of this Agreement, their interpretation, and any of the matters herein, will

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be subject to binding arbitration in Middlesex County, Massachusetts before the Judicial Arbitration & Mediation Services (“JAMS”) pursuant to its employment arbitration rules & procedures (“JAMS Rules”). The arbitrator shall administer and conduct any arbitration in accordance with Massachusetts law, including the Massachusetts Code of Civil Procedure, and the arbitrator shall apply substantive and procedural Massachusetts law to any dispute or claim, without reference to any conflict-of-law provisions of any jurisdiction. To the extent that the JAMS Rules conflict with Massachusetts law, Massachusetts law will take precedence. The Company and Executive agree that the prevailing party in any arbitration will be entitled to injunctive relief in any court of competent jurisdiction to enforce the arbitration award. The Company and Executive agree that the prevailing party in any arbitration will be awarded its reasonable attorneys’ fees and costs. The Company and Executive hereby agree to waive their right to have any dispute with the other party resolved in a court of law by a judge or jury. This Section 10 will not prevent either party from seeking injunctive relief (or any other provisional remedy) from any court having jurisdiction over the parties and the subject matter of their dispute relating to Executive’s obligations under this Agreement and the agreements incorporated herein by reference.

     11. Miscellaneous Provisions.

          (a) No Duty to Mitigate. Executive will not be required to mitigate the amount of any payment contemplated by this Agreement, nor will any such payment be reduced by any earnings that Executive may receive from any other source.

          (b) Waiver. No provision of this Agreement will be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by Executive and by an authorized officer of the Company (other than Executive). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party will be considered a waiver of any other condition or provision or of the same condition or provision at another time.

          (c) Headings. All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.

          (d) Entire Agreement. This Agreement, together with any Employment Agreement, constitutes the entire agreement of the parties hereto and supersedes in their entirety all prior representations, understandings, undertakings or agreements (whether oral or written and whether expressed or implied) of the parties with respect to the subject matter hereof. Except as provided in Section 5 of this Agreement, no waiver, alteration, or modification of any of the provisions of this Agreement will be binding unless in writing and signed by duly authorized representatives of the parties hereto and which specifically mention this Agreement.

          (e) Choice of Law. The validity, interpretation, construction and performance of this Agreement will be governed by the laws of the State of Massachusetts (with the exception of its conflict of laws provisions). Any claims or legal actions by one party against the other arising out of the relationship between the parties contemplated herein (whether or not arising under this Agreement) will be commenced or maintained in any state or federal court located in the jurisdiction

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where Executive resides, and Executive and the Company hereby submit to the jurisdiction and venue of any such court.

          (f) Severability. The invalidity or unenforceability of any provision or provisions of this Agreement will not affect the validity or enforceability of any other provision hereof, which will remain in full force and effect.

          (g) Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable income and employment taxes.

          (h) Counterparts. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

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     IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year set forth below.

COMPANY	EVERGREEN SOLAR, INC.
	By:
		Title:
EXECUTIVE
DATE	December 31, 2008

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EX-10.40

Exhibit 10.40

EVERGREEN SOLAR, INC.

AMENDED AND RESTATED
CHANGE OF CONTROL SEVERANCE AGREEMENT

     This Change of Control Severance Agreement (the “Agreement”) is made and entered into by and between                                          (“Executive”) and Evergreen Solar, Inc. (the “Company”), effective as of                                                              (the “Effective Date”).

RECITALS

     1. It is expected that the Company from time to time will consider the possibility of an acquisition by another company or other change of control. The Board of Directors of the Company (the “Board”) recognizes that such consideration can be a distraction to Executive and can cause Executive to consider alternative employment opportunities. The Board has determined that it is in the best interests of the Company and its stockholders to assure that the Company will have the continued dedication and objectivity of Executive, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined herein) of the Company.

     2. The Board believes that it is in the best interests of the Company and its stockholders to provide Executive with an incentive to continue his employment and to motivate Executive to maximize the value of the Company upon a Change of Control for the benefit of its stockholders.

     3. The Board believes that it is imperative to provide Executive with certain benefits upon a Change of Control and with certain severance benefits upon Executive’s termination of employment following a Change of Control. These benefits will provide Executive with enhanced financial security and incentive and encouragement to remain with the Company notwithstanding the possibility of a Change of Control.

     4. Certain capitalized terms used in the Agreement are defined in Section 7 below.

AGREEMENT

     NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto agree as follows:

     1. Term of Agreement. This Agreement will have a term of three (3) years commencing on the Effective Date. On the third anniversary of the Effective Date, and on each annual anniversary of the Effective Date thereafter, this Agreement automatically will renew for an additional one (1)-year term unless either party provides the other party with written notice of non-renewal at least thirty (30) days prior to the date of automatic renewal.

     2. At-Will Employment. The Company and Executive acknowledge that Executive’s employment is and will continue to be at-will, as defined under applicable law, except as may otherwise be specifically provided under the terms of any written formal employment agreement between the Company and Executive (an “Employment Agreement”). If Executive’s employment

terminates for any reason, including (without limitation) any termination not set for in Section 4 hereof, Executive will not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement or under Executive’s Employment Agreement.

     3. Acceleration of Vesting on Change of Control. Upon the consummation of a Change of Control (i) Executive’s outstanding equity awards, including without limitation stock options and restricted stock, will immediately vest and become exercisable or become released from the Company’s repurchase or reacquisition right as to (A) that number of unvested shares that would have vested during the period between the equity awards’ most recent vesting date (or grant date if no vesting date has been reached) and the Change of Control if the equity awards had been granted with a monthly vesting schedule and (B) that number of unvested shares that would have otherwise vested during the last twelve (12) months of each equity awards’ vesting schedule, and (ii) all performance targets for all of Executive’s performance-based equity awards will be deemed fully achieved on the first anniversary of the Change of Control if Executive is employed on such date.

     4. Severance Benefits.

          (a) Termination without Cause or Resignation for Good Reason in Connection with a Change of Control. If the Company or its Affiliates terminate Executive’s employment with the Company or its Affiliates, respectively, without Cause or Executive resigns from such employment for Good Reason within twelve (12) months following a Change of Control, then Executive will receive the following severance from the Company beginning 60 days after termination of employment, or such earlier date after termination as may be determined in the Company’s sole discretion, provided that Executive has executed a separation agreement and release of claims (in a form acceptable to the Company) and, if applicable under the Older Workers Benefit Protection Act, has not revoked such release within the 7-day revocation period after executing it. Failure to return the release within the applicable period specified in the release, or, if applicable, revoking the release within the 7-day revocation period after executing the release, will result in forfeiture of the severance.

               (i) Accrued Compensation. The Company will pay Executive all accrued but unpaid vacation, expense reimbursements, wages, and other benefits due to Executive under any Company-provided plans, policies, and arrangements.

               (ii) Severance Payment. Executive will receive monthly severance payments (less applicable withholding taxes) for twelve (12) months following Executive’s termination equal to (A) one-twelfth of Executive’s annual base salary as in effect immediately prior to Executive’s termination date or (if greater) at the level in effect immediately prior to the Change of Control, and (B) one-twelfth of Executive’s target bonus for the year of Executive’s termination. Subject to Section 5, the Company will pay the severance payments to which Executive is entitled as salary continuation on the same basis and timing as in effect immediately prior to the Change of Control.

               (iii) Equity. All of Executive’s outstanding equity awards, including without limitation stock options and restricted stock, will immediately vest and become exercisable or become released from the Company’s repurchase or reacquisition right.

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               (iv) Continued Employee Benefits. Executive will receive Company-paid coverage for a period of twelve (12) months for Executive and Executive’s eligible dependents under the Company’s Benefit Plans.

     For purposes of this Section 4(a), if Executive’s employment with the Company or one of its Affiliates terminates, he will not be determined to have been terminated without Cause, if he continues to remain employed by the Company or one of its Affiliates (e.g., upon transfer from one Affiliate to another); provided, however, that the parties understand and acknowledge that any such termination could potentially result in Executive’s ability to resign for Good Reason.

          (b) Voluntary Resignation; Termination for Cause. If Executive’s employment with the Company or its Affiliates terminates (i) voluntarily by Executive (other than for Good Reason within twelve (12) months following a Change of Control) or (ii) for Cause by the Company, then Executive will not be entitled to receive severance or other benefits except for those (if any) as may then be established under the Company’s then existing severance and benefits plans and practices or pursuant to other written agreements with the Company, including, without limitation, any Employment Agreement.

          (c) Disability; Death. If the Company terminates Executive’s employment as a result of Executive’s Disability, or Executive’s employment terminates due to his death, then Executive will not be entitled to receive severance or other benefits except for those (if any) as may then be established under the Company’s then existing written severance and benefits plans and practices or pursuant to other written agreements with the Company, including, without limitation, any Employment Agreement.

          (d) Exclusive Remedy. In the event of a termination of Executive’s employment as set forth in Section 4(a), the provisions of this Section 4 are intended to be and are exclusive and in lieu of any other rights or remedies to which Executive or the Company may otherwise be entitled, whether at law, tort, contract, or in equity. Executive will be entitled to no benefits, compensation or other payments or rights upon termination of employment following a Change of Control other than those benefits expressly set forth in this Section 4.

     5. Code Section 409A.

          (a) Distributions. Notwithstanding anything to the contrary in this Agreement, if Executive is a “specified employee” (as defined in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the final regulations and any guidance promulgated thereunder (“Section 409A”), and as applied according to Company procedures) at the time of Executive’s termination, then only the amounts payable to Executive, if any, pursuant to this Agreement (the “Separation Benefits”) which are exempt from Section 409A because (i) such Separation Benefits will not and could not under any circumstances, regardless of when such termination occurs, be paid later than the fifteenth day of the third month of the Company’s fiscal year following Executive’s termination (the “Short-Term Deferral Limit”) or (ii) such Separation Benefits do not exceed the Involuntary Separation Pay Limit (as defined below), may be made within the first six (6) months following Executive’s termination of employment in accordance with the payment schedule applicable to each such payment or benefit. For these purposes, each severance payment and benefit

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is hereby designated as a separate payment and will not collectively be treated as a single payment. Any portion of the Separation Benefits not exempt from Section 409A under the Short-Term Deferral Limit and/or in excess of the Involuntary Separation Pay Limit shall accrue and, to the extent such portion of the Separation Benefits would otherwise have been payable within the first six (6) months following Executive’s termination of employment, will become payable, without interest, on the first to occur of the following: (x) the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of Executive’s termination of employment, or (y) Executive’s death. All subsequent Separation Benefits, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit.

          (b) Amendment. This provision is intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. The Company and Executive agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Executive under Section 409A.

     6. Limitation on Payments. In the event that the severance and other benefits provided for in this Agreement or otherwise payable to Executive (i) constitute “parachute payments” within the meaning of Section 280G of the Code and (ii) but for this Section 6, would be subject to the excise tax imposed by Section 4999 of the Code, then Executive’s severance benefits under Section 4 will be either:

          (a) delivered in full, or

          (b) delivered as to such lesser extent which would result in no portion of such severance benefits being subject to excise tax under Section 4999 of the Code,

whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, results in the receipt by Executive on an after-tax basis, of the greatest amount of severance benefits, notwithstanding that all or some portion of such severance benefits may be taxable under Section 4999 of the Code. Unless the Company and Executive otherwise agree in writing, any determination required under this Section 6 will be made in writing by the Company’s independent public accountants immediately prior to Change of Control (the “Accountants”), whose determination will be conclusive and binding upon Executive and the Company for all purposes. For purposes of making the calculations required by this Section 6, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Executive will furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 6. The Company will bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 6.

     7. Definition of Terms. The following terms referred to in this Agreement will have the following meanings:

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          (a) Affiliate. “Affiliate” means the Company and any other parent or subsidiary corporation of the Company, as such terms are defined in Section 424(e) and (f) of the Code.

          (b) Benefit Plans. “Benefit Plans” means plans, policies or arrangements that the Company sponsors (or participates in) and that immediately prior to Executive’s termination of employment provide Executive and/or Executive’s eligible dependents with medical, dental, vision and similar benefits. Benefit Plans do not include any other type of benefit (including, but not by way of limitation, disability, life insurance or retirement benefits). A requirement that the Company provide Executive and Executive’s eligible dependents with coverage under the Benefit Plans will not be satisfied unless the coverage is no less favorable than that provided to executives of the Company at any applicable time during the period Executive is entitled to receive severance pursuant to Section 4. The Company may, at its option, satisfy any requirement that the Company provide coverage under any Benefit Plan by (i) reimbursing Executive’s premiums under Title X of the Consolidated Budget Reconciliation Act of 1985, as amended (“COBRA”) after Executive has properly elected continuation coverage under COBRA (in which case Executive will be solely responsible for electing such coverage for his eligible dependents), or (ii) providing coverage under a separate plan or plans providing coverage that is no less favorable, or (iii) by paying Executive a lump-sum payment within 90 days of Executive’s termination of employment which is, on an after-tax basis, sufficient to provide Executive and Executive’s eligible dependents with equivalent coverage under a third party plan that is reasonably available to Executive and Executive’s eligible dependents.

          (c) Cause. “Cause” will mean:

               (i) A willful failure by Executive to perform Executive’s duties to the Company;

               (ii) A willful act by Executive that constitutes misconduct and that is injurious to the Company;

               (iii) Circumstances where Executive willfully imparts material confidential information relating to the Company or its business to competitors or to other third parties other than as authorized in the course of carrying out Executive’s duties;

               (iv) A material and willful violation by Executive of a federal or state law or regulation applicable to the business of the Company; or

               (v) Executive’s conviction or plea of guilty or no contest to a felony.

     No act or failure to act by Executive will be considered “willful” unless committed without good faith and without a reasonable belief that the act or omission was in the Company’s best interest.

          (d) Change of Control. “Change of Control” means the occurrence of any of the following:

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               (i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by, or fifty percent (50%) or more of the fair value of, the Company’s then outstanding voting securities;

               (ii) Any action or event occurring within a one (1)-year period, as a result of which less than a majority of the directors are Incumbent Directors. “Incumbent Directors” will mean directors who either (A) are directors of the Company as of the date hereof, or (B) are elected, or nominated for election, to the Board with the affirmative votes of a majority of the Incumbent Directors at the time of such election or nomination;

               (iii) The consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or resulting entity, including any parent holding company) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving or resulting entity outstanding immediately after such merger or consolidation; or

               (iv) The consummation of the sale, lease or other disposition by the Company of all or substantially all the Company’s assets.

          (e) Disability. “Disability” will mean that Executive has been unable to perform his Company duties as the result of his incapacity due to physical or mental illness, and such inability, at least twenty-six (26) weeks after its commencement, is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to Executive or Executive’s legal representative (such agreement as to acceptability not to be unreasonably withheld). Termination resulting from Disability may only be effected after at least thirty (30) days’ written notice by the Company of its intention to terminate Executive’s employment. In the event that Executive resumes the performance of substantially all of Executive’s duties hereunder before the termination of Executive’s employment becomes effective, the notice of intent to terminate will automatically be deemed to have been revoked.

          (f) Good Reason. “Good Reason” will mean the occurrence of one or more of the following, without the Executive’s consent:

               (i) A material reduction of Executive’s duties, title, authority or responsibilities in effect immediately prior to a Change of Control;

               (ii) A material reduction in Executive’s base salary;

               (iii) The failure of the Company to obtain the assumption of the Agreement by the successor; or

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               (iv) A material change in the geographic location at which Executive must perform services (in other words, the relocation of Executive to a facility or a location more than fifty (50) miles from Executive’s then present location).

Provided, however, that before Executive may resign for Good Reason, (A) Executive must provide the Company with written notice within ninety (90) days of the event that Executive believes constitutes “Good Reason” specifically identifying the acts or omissions constituting the grounds for Good Reason and (B) the Company must have an opportunity within thirty (30) days following delivery of such notice to cure the Good Reason condition.

          (g) Involuntary Separation Pay Limit. “Involuntary Separation Pay Limit” will mean the lesser of two (2) times: (i) Executive’s annualized compensation based upon the annual rate of pay paid to Executive during the Company’s taxable year preceding the Company’s taxable year of Executive’s termination of employment as determined under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which Executive’s employment is terminated.

     8. Successors.

          (a) The Company’s Successors. Any successor to the Company (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) or to all or substantially all of the Company’s business and/or assets will assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term “Company” will include any successor to the Company’s business and/or assets which executes and delivers the assumption agreement described in this Section 8(a) or which becomes bound by the terms of this Agreement by operation of law.

          (b) Executive’s Successors. The terms of this Agreement and all rights of Executive hereunder will inure to the benefit of, and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

     9. Notice.

          (a) General. Notices and all other communications contemplated by this Agreement will be in writing and will be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of Executive, mailed notices will be addressed to him at the home address which he most recently communicated to the Company in writing. In the case of the Company, mailed notices will be addressed to its corporate headquarters, and all notices will be directed to the attention of its President.

          (b) Notice of Termination. Any termination by the Company for Cause or by Executive for Good Reason will be communicated by a notice of termination to the other party hereto given in accordance with Section 8(a) of this Agreement. Such notice will indicate the

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specific termination provision in this Agreement relied upon, will set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and will specify the termination date (which will be not more than thirty (30) days after the giving of such notice).

     10. Arbitration. Executive and the Company agree that any and all disputes arising out of, or relating to, the terms of this Agreement, their interpretation, and any of the matters herein, will be subject to binding arbitration in Middlesex County, Massachusetts before the Judicial Arbitration & Mediation Services (“JAMS”) pursuant to its employment arbitration rules & procedures (“JAMS Rules”). The arbitrator shall administer and conduct any arbitration in accordance with Massachusetts law, including the Massachusetts Code of Civil Procedure, and the arbitrator shall apply substantive and procedural Massachusetts law to any dispute or claim, without reference to any conflict-of-law provisions of any jurisdiction. To the extent that the JAMS Rules conflict with Massachusetts law, Massachusetts law will take precedence. The Company and Executive agree that the prevailing party in any arbitration will be entitled to injunctive relief in any court of competent jurisdiction to enforce the arbitration award. The Company and Executive agree that the prevailing party in any arbitration will be awarded its reasonable attorneys’ fees and costs. The Company and Executive hereby agree to waive their right to have any dispute with the other party resolved in a court of law by a judge or jury. This Section 10 will not prevent either party from seeking injunctive relief (or any other provisional remedy) from any court having jurisdiction over the parties and the subject matter of their dispute relating to Executive’s obligations under this Agreement and the agreements incorporated herein by reference.

     11. Miscellaneous Provisions.

          (a) No Duty to Mitigate. Executive will not be required to mitigate the amount of any payment contemplated by this Agreement, nor will any such payment be reduced by any earnings that Executive may receive from any other source.

          (b) Waiver. No provision of this Agreement will be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by Executive and by an authorized officer of the Company (other than Executive). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party will be considered a waiver of any other condition or provision or of the same condition or provision at another time.

          (c) Headings. All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.

          (d) Entire Agreement. This Agreement, together with any Employment Agreement, constitutes the entire agreement of the parties hereto and supersedes in their entirety all prior representations, understandings, undertakings or agreements (whether oral or written and whether expressed or implied) of the parties with respect to the subject matter hereof. Except as provided in Section 5 of this Agreement, no waiver, alteration, or modification of any of the provisions of this Agreement will be binding unless in writing and signed by duly authorized representatives of the parties hereto and which specifically mention this Agreement.

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           (e) Choice of Law. The validity, interpretation, construction and performance of this Agreement will be governed by the laws of the State of Massachusetts (with the exception of its conflict of laws provisions). Any claims or legal actions by one party against the other arising out of the relationship between the parties contemplated herein (whether or not arising under this Agreement) will be commenced or maintained in any state or federal court located in the jurisdiction where Executive resides, and Executive and the Company hereby submit to the jurisdiction and venue of any such court.

          (f) Severability. The invalidity or unenforceability of any provision or provisions of this Agreement will not affect the validity or enforceability of any other provision hereof, which will remain in full force and effect.

          (g) Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable income and employment taxes.

          (h) Counterparts. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

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     IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year set forth below.

COMPANY	EVERGREEN SOLAR, INC.
	By:
		Title:
EXECUTIVE
DATE	December 31, 2008

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EX-10.41

Exhibit 10.41

EVERGREEN SOLAR, INC.

Amended and Restated Management Incentive Plan

The purpose of the Management Incentive Plan is to recognize and reward key employees of Evergreen Solar (the “Company”) for the business performance of the organization. The Management Incentive Plan is based on Company performance results, compared to annually established plan goals.

Objectives

- Promote strong linkage between employee contributions and overall Company performance that enhances shareholder value.

- Reward performance that directly supports the achievement of Company annual business objectives.

- Attract and retain critical technical and management talent necessary for the Company’s success.

- Provide the opportunity for significant compensation based on Company annual performance.

Eligibility

Plan participants will include: CEO, SVPs, VPs, Directors and all other Professional Staff. The plan allows the inclusion of other non-referenced employees as approved by the CEO or Compensation Committee. Plan participants are eligible for a bonus plan payout provided they were employed (and participating in the plan) prior to October 1^st of the plan year and remained employed through December 31^st of the plan year.

Individual Participation Levels

Participation in the Management Incentive Plan will be based on position level in the company at the beginning of each calendar year. EMPLOYEES HIRED OR PROMOTED INTO A BONUS ELIGIBLE POSITION ON OR AFTER OCTOBER 1ST WILL NOT BE ELIGIBLE FOR PARTICIPATION IN THE MANAGEMENT INCENTIVE PLAN. Promotions and new hires prior to October 1st will be eligible for participation in the plan on a pro-rated basis, determined by using the promotion date or hire date. The following table identifies eligible participants and the targeted bonus level:

Position Level	Incentive Target
Level 6	100% of base salary (based on 100% attainment of Company Performance Targets AND Corporate Strategic Goals)
Level 4	75% of base salary (based on 100% attainment of Company Performance Targets AND Corporate Strategic Goals)

Position Level	Incentive Target
Level 4	50% of base salary (based on 100% attainment of Company Performance Targets AND Corporate Strategic Goals)
Level 3	25% of base salary (based on 100% attainment of Company Performance Targets AND Corporate Strategic Goals)
Level 2	10% of base salary (based on 100% attainment of Company Performance Targets AND Corporate Strategic Goals)
Level 1	5% of base salary (based on 100% attainment of Company Performance Targets AND Corporate Strategic Goals)

Actual Management Incentive Plan payments can be more or less than the targeted amount based on Company Performance Target Calculations and/or achievement of Corporate Strategic Goals and departmental objectives.

All plan participants become eligible for bonus payout based on the attainment of Company Performance Targets and the achievement of Corporate Strategic Goals. All plan participants must be performing at a “Meets Expectations” level or above, and must be employed by Evergreen Solar at the time plan payments are made.

Company Performance Targets

Total Company performance for the purposes of this bonus plan will be determined by attainment of financial, strategic and/or departmental objectives. Specific targets will be determined and communicated to plan participants on an annual basis.

The CEO, in conjunction with the Board of Directors, reserves the right to amend or change Company Performance Targets at any time during the plan year, if such a change is deemed to be in the best interest of Evergreen Solar, Inc.

The CEO and the Board of Directors also reserve the right to make discretionary bonus payments to plan and non-plan participants, based on their contribution to Evergreen Solar goals and objectives, regardless of the achievement of Company Performance Targets.

Company Strategic Objectives

As the company enters its next growth phase, we are cognizant that many factors beyond pure financial measures will contribute to our overall success. As such, the Management Incentive Plan payouts will be calculated based on the attainment of financial targets as well as Corporate Strategic Goals and departmental objectives. Specific Corporate Strategic Goals will be established and communicated by the CEO, and must be executed by year-end in order for plan participants to receive a bonus payout.

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Establishment of Company Performance Targets and Departmental Objectives

The CEO will recommend financial performance targets for the coming year to the Compensation Committee. He will also establish and gain necessary approvals relative to the Corporate Strategic Goals for the upcoming year. The Compensation Committee will set the coming year’s targets at the last meeting of each calendar year or no later than the end of Q1.

Determination and Approval of Company Performance Results

The CEO will review Company performance with the Board of Directors and the Compensation Committee at the first meeting of each calendar year. Upon approval from the Compensation Committee, Management Incentive Plan calculations will be initiated and payment will be made to eligible participants.

Payment Timing

Awards will be paid in a lump sum as soon as practical following the Compensation Committee’s approval of the Company’s performance results and departmental objective results, but not earlier than January 1 and not later than March 15 of the year following the calendar year to which the awards relate (the “Applicable Period”). To the extent that an award is not paid within the Applicable Period but is paid by December 31 of the calendar year which includes the Applicable Period, then it is intended that such payment shall be treated as made at a “specified time” (i.e., the calendar year which includes the Applicable Period) for purposes of complying with Section 409A of the Internal Revenue Code of 1986, as amended.

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EX-10.42

Exhibit 10.42

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.

PV LICENSE AGREEMENT

     This PV LICENSE AGREEMENT (this “Agreement”) is made as of this 5th day of September, 2007 (the “Effective Date”) by and between ESLR1, LLC, a Delaware limited liability company with a principal place of business at 138 Bartlett Street, Marlborough, MA 01752 (“ESLR1”), and TISICS Ltd., a corporation incorporated under the laws of England and Wales with a principal place of business at 22 Invincible Road, Farnborough, Hampshire, UK GU14 7QU (“TISICS’). Each of ESLR1 and TISICS shall sometimes be individually referred to herein as a “Party” and collectively referred to herein as the “Parties”.

     WHEREAS, Evergreen Solar Inc. (“Evergreen”), the sole initial member of ESLR1, formed ESLR1 on August 27, 2007 for the purpose of, among other things, (a) manufacturing SiC Fiber (as defined below) for Evergreen’s String Ribbon operations based on TISICS’ technology, (b) manufacturing SiC Fiber for TISICS’ composite technologies based on TISICS’ technology, (c) conducting manufacturing- and product technology-oriented development work required to optimize its activities in the PV Field only and (d) conducting other activities necessary for the manufacture, testing and shipment (including to Third Parties (as defined below)) of SiC Fiber in the PV Field (as defined below); at the same time as entering into this Agreement, the Parties will enter into that certain Other Fields License Agreement (the “Other Fields License Agreement”);

     WHEREAS, the Parties will negotiate in good faith the terms and conditions of an agreement under which TISICS will grant ESLR1 a non-exclusive license to the TISICS IP for use in the Composite Field (the “Composite Field License Agreement”);

     WHEREAS, Evergreen, ESLR1 and TISICS entered into that certain Securities Purchase and Contribution Agreement dated as of September 5, 2007 (the “Contribution Agreement”) pursuant to which, among other things, (a) Evergreen agreed to contribute assets in consideration for membership units in ESLR1, and (b) TISICS agreed to contribute its agreements and covenants set forth in that certain Facilities and Start Up Agreement dated as of September 5, 2007 between TISICS and ESLR1 (the “Facilities and Start Up Agreement”), and that certain Supply Agreement dated as of September 5, 2007 between TISICS and ESLR1 (the “Supply Agreement”), in each case, (among other things) in consideration for an option to purchase membership units in ESLR1, all on the terms and conditions set forth in the Contribution Agreement;

     WHEREAS, TISICS desires to grant ESLR1 a license to certain TISICS technology, know-how, plans and designs related to (1) the manufacture of SiC Fiber for use in the PV Field, which license shall be exclusive inside the PV Field (with licenses in other fields to form the subject of the Other Fields License Agreement and Composite Field License Agreement), and (2)

the construction and operation of a SiC Fiber factory and perform related knowledge transfer and other services on behalf of ESLR1 all on the terms and conditions set forth herein; and

     NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein, ESLR1 and TISICS hereby agree as follows:

1. Definitions

     1.1 “Affiliate” means, with respect to an entity, any entity that directly, or through one or more intermediaries, controls, is controlled by, or is under common control with such entity, as applicable, where “control” for purposes of this definition means the ownership of at least fifty percent (50%) of such company’s or entity’s capital stock or the power to direct or cause the direction of such company’s or entity’s management, whether by ownership of securities, by contract or otherwise.

     1.2 “Composite Field” means [****]

     1.3 “Controlled” or “Controls”, when used in reference to the rights of a Party or a Party’s Affiliate(s) in and to Technology or Intellectual Property Rights, means that such entity owns or purports to own or has the right or purports to have the right to grant a license or sublicense with respect to such Technology or Intellectual Property Rights to the other Party as provided for herein without breaching the terms of any agreement such entity has with a Third Party.

     1.4 “Encumbrances” means any Liens, agreements, voting trusts, proxies and other arrangements or restrictions of any kind whatsoever.

     1.5 “ESLR1 Competitor” means any Third Party that manufactures, sells or provides products or services in the PV Field, plus any other Third Party that manufactures, sells or provides products or services relating to strings of material. For the avoidance of doubt and without limitation, the following entities are ESLR1 Competitors as of the Effective Date: Sharp, Q-Cells, Kyocera, REC, Sanyo, BP Solar, Mitsubishi Electric, Schott, Shell, Isophoton, SolarWorld, Photowatt, GE, Suntech, Motech, Kaneka, ErSol, ECD, Sunways, First Solar, Solarfun, SunPower, MEMC, Crystalox, Solarforce, Solon and Conergy.

     1.6 “ESLR1 IP” means all Intellectual Property Rights Controlled by ESLR1 as of or during the Grantback License Term that is embodied in Technology (including Improvements) related to the use of SiC Fiber-related Technology, excluding the TISICS IP.

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     1.7 “ESLR1 Facilities” means, collectively, (i) manufacturing facilities for the Exploitation of SiC Fiber and (ii) any equipment installed or used in such facilities, in each case that are owned or controlled primarily by or on behalf of ESLR1 or a ESLR1 Sublicensee.

     1.8 “Exploit” means to make, have made, import, sell, have sold, offer for sale and otherwise use, including, but not limited to, to research, design, develop, register, modify, enhance, improve, manufacture, export, transport, distribute, promote, market or otherwise commercialize.

     1.9 “Governmental Entity” means (i) any federal, state, local, municipal, foreign or other government; (ii) any governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, entity or self-regulatory organization and any court or other tribunal); or (iii) any body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature, including any arbitral tribunal

     1.10 “Grantback License Term” means [****] commencing on the Effective Date, plus, if on the [****] anniversary of the Effective Date TISICS owns at least [****] of ESLR1’s outstanding LLC Units (as defined in the Contribution Agreement), for so long after such [****] anniversary that TISICS owns at least [****] of ESLR1’s outstanding LLC Units, in each case, unless this Agreement is earlier terminated.

     1.11 “Improvements” means all Technology that constitutes an improvement, enhancement, alteration or modification to or of any Technology.

     1.12 “Intellectual Property Rights” means, collectively, all rights in, to and under (i) Patents, (ii) registered and unregistered copyrights and (iii) all other intellectual property rights (including trade secret rights, trademarks, service marks, trade dress and similar rights of any type under the laws of any governmental authority), including all applications and registrations relating to the foregoing.

     1.13 “Joint IP” means all Intellectual Property Rights embodied in Technology that is jointly invented, created or developed by one or more employees, consultants or contractors of each Party.

     1.14 “Key Customer” means, [****]

     1.15 “Laws” means any federal, state, local, municipal or foreign statute, law, ordinance, regulation, rule, code, order, principle of common law or judgment enacted, promulgated, issued, enforced or entered by any Governmental Entity, or other requirement or rule of law.

     1.16 “Lien” or “Liens” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind or any subordination arrangement in favor of another Person.

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     1.17 “Other Fields” means fields not included within the PV Field or Composite Field.

     1.18 “Patents” means patents and patent applications (which for the purposes of this Agreement shall be deemed to include certificates of invention and applications for certificates of invention), including provisionals, divisionals, continuations, continuations-in-part, reissues, reexaminations, renewals, extensions, supplementary protection certificates, and the like of any such patents and patent applications, and any foreign equivalents thereof, and shall include patents whose term has been extended by statutory patent term adjustments in any jurisdiction in the world, including those patent term adjustments granted under 35 U.S.C. § 154(b).

     1.19 “Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.

     1.20 “PV Field” means (i) [****], and (ii) [****].

     1.21 “Sold” shall mean having closed a transaction under which ESLR1 or any ESLR1 Sublicensee actually derives revenues from any sale, conveyance or other transfer of SiC Fiber (for clarity, excluding bad debt transactions which do not involve Evergreen and returns of SiC Fiber). Any such transaction shall be referred to as a “Sale”. Further, any inventory of SiC Fiber that is purchased by Evergreen or any of Evergreen’s Affiliates and that is held in ESLR1’s or a ESLR1 Sublicensee’s inventory for more than a period of [****] days after such purchase shall be deemed to have been Sold upon the expiration of such period.

     1.22 “SiC Fiber” means [****]

     1.23 “Technology” means, collectively, (i) know-how, show-how, trade secrets, inventions, discoveries, developments, methods, modifications, designs, chemical and biological materials, formulae, processes, information, documents, studies, techniques, algorithms, results, data, data structures, databases, data collections, mask works, manufacturing processes and data, specifications, sourcing information, supplier and customer lists, and quality control and testing procedures, and (ii) original published and unpublished works of authorship fixed in a tangible medium of expression, including software and code (including software and firmware listings, assemblers, applets, compilers, source code, object code, net lists, design tools, user interfaces, application programming interfaces, protocols, formats, documentation, annotations, comments, system build software and instructions), graphics or images, text, audio or visual works, materials that document design or design processes, or that document research or testing, schematics, diagrams, product specifications and other works of authorship, in each case of clauses (i) and (ii), whether or not patented or patentable and whether or not in written form.

     1.24 “Third Party” shall mean any Person, other than ESLR1, TISICS and their respective Affiliates.

     1.25 “TISICS Competitor” means any Third Party that (i) develops, manufactures, distributes or sells composite materials or components utilizing silicon carbide monofilaments in

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the Composite Field and/or (ii) develops, manufactures, distributes or sells silicon carbide fiber or similar filamentary reinforcements in the Composite Field.

     1.26 “TISICS IP” means all Intellectual Property Rights Controlled by TISICS or any of its Affiliates as of the Effective Date or during the Term that is embodied in Technology (including Improvements) related to (a) the research, design, development, manufacture or testing of SiC Fiber or (b) the planning, design, construction, commissioning, operation, maintenance, support or other use (collectively, “Construction and/or Operation”) of the ESLR1 Facilities. A description of TISICS IP existing as of the Effective Date is set forth in Exhibit B. For the avoidance of doubt, TISICS IP shall not include any Intellectual Property Rights embodied in Technology or Improvements created after the Effective Date that are identified pursuant to a written notice delivered in good faith by TISICS to ESLR1 as not Controlled by TISICS, which notice (i) is delivered on or prior to TISICS’ first delivery or making available of any such Technology or Improvements to ESLR1 and (ii) describes the substance of such Technology or Improvements and identifies the applicable Third Party that owns or controls such Technology or Improvements.

2. License.

     2.1 TISICS IP License.

          (a) License. TISICS, for itself and on behalf of its Affiliates, hereby grants ESLR1 an irrevocable, perpetual, worldwide, royalty-bearing (in accordance with Section 4 and subject to Section 4.4), transferable (in accordance with Section 11.7), sublicensable (in accordance with Section 2.1(b)) right and license under the TISICS IP within the PV Field only to (i) Exploit SiC Fiber, (ii) Construct and/or Operate the ESLR1 Facilities and (iii) copy, distribute, display, perform and modify (including the right to create derivative works (for use in the PV Field only) of) the TISICS IP for the purpose of engaging in the activities described in the foregoing clauses (i) and (ii). The license granted pursuant to the preceding sentence shall be exclusive (even as to TISICS and its Affiliates) in the PV Field.

          (b) Sublicensing. The license contained in Section 2.1(a) includes the right to grant sublicenses in the PV Field only to Third Parties other than TISICS Competitors (each Third Party sublicensee, a “ESLR1 Sublicensee”), provided that ESLR1 shall remain responsible for the performance of the ESLR1 Sublicensees hereunder and any such sublicense granted by ESLR1 shall be pursuant to a written agreement that is at least as protective of TISICS, with respect to the license contained in Section 2.1(a), as this Agreement and provided that TISICS has consented to the granting of such sublicense, such consent not to be unreasonably withheld or delayed, provided further that ESLR1 may grant Evergreen and Evergreen’s Affiliates a sublicense without TISICS’ consent or any requirement of a written agreement (but subject to prior written notice of such sub-license being given to TISICS). ESLR1 Sublicensees shall not have the right to grant any further sublicenses under any such sublicense granted by ESLR1. The terms of the agreement with ESLR1 Sublicensees will expressly prohibit in writing all of its ESLR1 Sublicensees from exercising the license grant contained in Section 2.1(a) (but not any other sublicenses such ESLR1 Sublicensee may be granted, for example, under the Composite Field License Agreement or Other Fields License Agreement) outside the PV Field. Subject to Section 2.5, any purchaser of SiC Fiber in the PV Field shall, by operation of this Agreement,

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receive the right to sell, offer for sale, resell, offer for resale, import and otherwise use such SiC Fiber in the PV Field by operation of the patent exhaustion/first sale doctrine, but otherwise shall receive no licenses, sublicenses or other rights under the TISICS IP by virtue of its purchase of SiC Fiber in the PV Field from ESLR1 or a ESLR1 Sublicensee.

     2.2 Reservation of Rights. Subject to Section 2.3(d), ESLR1 shall acquire no right, title or interest in, to or under, and TISICS and its Affiliates hereby reserve all right, title and interest in, to and under, the TISICS IP, by implication, estoppel or otherwise, other than the express license grant to ESLR1 set forth in Section 2.1(a) or as otherwise expressly provided herein.

     2.3 Ownership of Intellectual Property Rights. The following shall apply to all Technology (and all Intellectual Property Rights embodied therein) invented, created or developed under this Agreement, the Other Fields License Agreement, the Composite Field License Agreement, the Supply Agreement, the Facilities and Start Up Agreement and any other written agreement between the Parties during the respective terms of such agreements:

          (a) TISICS IP. As between the Parties, TISICS and/or its Affiliate(s) shall have exclusive ownership of the TISICS IP.

          (b) ESLR1 IP. As between the Parties, ESLR1 shall have exclusive ownership of the ESLR1 IP.

          (c) Newly Developed Intellectual Property. As between the Parties, subject to Section 2.3(d), (i) TISICS and/or its Affiliate(s) shall have exclusive ownership of (A) all Technology (and all Intellectual Property Rights embodied therein) invented, created or developed by one or more employees, consultants or contractors of TISICS and/or its Affiliate(s), as applicable, during the Term without any employees, consultants or contractors of ESLR1, except to the extent that any such Technology constitutes an Improvement solely to the ESLR1 IP or any other Intellectual Property Rights then-Controlled by ESLR1 (i.e., such Technology does not constitute an Improvement to any of the TISICS IP or Joint IP) (such Improvement, a “ESLR1 IP Improvement”), and (B) TISICS IP Improvements (as defined below) and (ii) ESLR1 shall exclusively own (A) all Technology (and all Intellectual Property Rights embodied therein) invented, created or developed by one or more employees, consultants or contractors of ESLR1 and/or its Affiliate(s), as applicable, during the Term without any employees, consultants or contractors of TISICS or Affiliates of TISICS, except to the extent that any such Technology constitutes an Improvement solely to the TISICS IP or any other Intellectual Property Rights then-Controlled by TISICS and/or its Affiliate(s) (i.e., such Technology does not constitute an Improvement to any of the ESLR1 IP or Joint IP) (such Improvement, a “TISICS IP Improvement”) and (B) ESLR1 IP Improvements.

          (d) Joint IP. If Technology is jointly invented, created or developed by one or more employees, consultants or contractors of each of ESLR1 and/or its Affiliate(s), on the one hand, and TISICS and/or its Affiliate(s), on the other hand, then such Technology, and all Joint IP therein, shall be jointly owned by ESLR1, on the one hand, and TISICS and/or its Affiliate(s), on the other hand, as applicable, without any duty to account.

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          (e) Assignment. To the extent any Party or its Affiliates retains any ownership interest in, to or under any Technology or Intellectual Property Rights that are properly owned (in accordance with this Section 2.3) by the other Party or such other Party’s Affiliates, such Party hereby assigns, and will assign, on behalf of itself and its Affiliates, to such other Party or such other Party’s Affiliates, as applicable, all of its ownership interest in, to and under such Technology and Intellectual Property Rights in all countries and territories worldwide and under any international conventions, free and clear of any and all Encumbrances. Each Party shall provide to the other Party all assistance (including the execution of any applicable documents of assignment or registration) reasonably requested by such other Party to perfect the rights described in this Section 2.3.

          (f) Licenses. For the avoidance of doubt and without limitation, the Intellectual Property Rights embodied in the Technology covered by this Section 2.3 shall be deemed TISICS IP or ESLR1 IP, as applicable, and thus subject to the licenses granted in the applicable agreement between the Parties, to the extent the scope of the definitions of “TISICS IP” or “ESLR1 IP”, respectively, cover such Technology.

     2.4 Assignment of Inventions by Personnel. Each Party shall enter into binding agreements obligating all employees, consultants and contractors performing activities related to, under or as contemplated by this Agreement, the Other Fields License Agreement, the Composite Field License Agreement, the Supply Agreement, the Facilities and Start Up Agreement or any other written agreement between the Parties (i) to assign his/her interest in any Technology conceived or reduced to practice in the course of such activities (and all Intellectual Property Rights therein) to the Party for which such employee, consultant or contractor is providing its services and (ii) to maintain the confidentiality of the same in accordance with reasonable confidentiality provisions at least as protective of the Technology and Intellectual Property Rights owned by the other Party or such other Party’s Affiliates as those provisions set forth in Section 6.

     2.5 Third Party Sales. All sales of SiC Fiber to Third Parties by ESLR1 and ESLR1 Sublicensees must contain appropriate restrictions preventing the use by Third Parties of SiC Fiber in the Composite Field, whether directly or as a recycled material. If ESLR1 becomes aware of any use by a Third Party of such SiC Fiber in the Composite Field, ESLR1 shall reasonably cooperate with TISICS, at TISICS’ cost, in enforcing such restrictions.

     2.6 Field Limitation. For the avoidance of doubt, without limiting and subject to the rights granted pursuant to the Composite Field License Agreement, ESLR1 shall not intentionally develop Technology under the license granted in Section 2.1(a) that is specifically and exclusively targeted for the production and use of SiC Fiber in the Composite Field.

3. Delivery of TISICS IP; Other Obligations.

     3.1 Delivery of TISICS IP.

          (a) As soon as practicable after the Effective Date, TISICS shall make available for inspection by ESLR1, in hardcopy or electronic format, a copy of documents relevant to the Construction and/or Operation of the ESLR1 Facilities and to the manufacture of

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SiC Fiber (excluding, for clarity, any documents that are irrelevant to the performance of such activities in the PV Field), including documents, drawings and specifications (“TISICS Materials”), in each case, existing as of the Effective Date and for use in the PV Field. TISICS shall provide ESLR1 with copies of such TISICS Materials that are material to the performance of such activities in the PV Field as soon as commercially possible but in any event within the earlier of (i) [****] calendar days following the Effective Date or (ii) [****] calendar days after the receipt of written notice from ESLR1 if ESLR1 determines in good faith that TISICS is not cooperating with ESLR1 or otherwise not complying with its obligations in this Section 3.1(a), in each case, which TISICS Materials shall include the documents, drawings and specifications set forth in Exhibit C.

          (b) Thereafter, TISICS shall continue to give ESLR1 access to TISICS Materials as ESLR1 may reasonably request for the purposes of ESLR1’s Construction and/or Operation of the ESLR1 Facilities and manufacturing of SiC Fiber in the PV Field. Further, TISICS shall [****] develop a process for manufacturing SiC Fiber for use in the PV Field that is reasonably acceptable to ESLR1. Without limiting any of ESLR1’s remedies, TISICS shall deliver to ESLR1 copies of all TISICS Materials (for any field) not already delivered to ESLR1 within one (1) month of the occurrence of any of the following: (A) TISICS having not developed such a process within [****] after the Effective Date or (B) ESLR1 delivering written notice to TISICS at any time that TISICS is not using its best efforts to develop such a process, provided that TISICS shall have [****] after receiving such notice to cure such failure to [****]. For the purposes of assessing [****] of TISICS, TISICS shall provide monthly plans indicating milestone targets for the development of such process in accordance with such [****] timetable, which plans shall be subject to the written approval of ESLR1. The Parties acknowledge that the direction and timescales of such plans will evolve as work progresses and TISICS and ESLR1 will work in good faith to keep the milestone plans current to the progress achieved.

          (c) The Parties acknowledge that the initial specifications for SiC Fiber for use with Evergreen’s String Ribbon process are set forth in Exhibit A, and that such specifications represent a starting point for the development of SiC Fiber by the Parties for use in the PV Field. The Parties shall work together in good faith to improve and modify such specifications, in conjunction with the development of a process for manufacturing SiC Fiber for use in the PV Field, to achieve the SiC Fiber performance and quality characteristics reasonably required by ESLR1.

          (d) Where TISICS requires String Ribbon process trials in order to assess the performance of the SiC Fiber during development, these trials will be conducted in a timely manner and any delay that may be required by Evergreen and/or ESLR1 for operational reasons will be added to the delivery time frame referred to in 3.1(b)(A) above. Evergreen and/or ESLR1 will provide TISICS with timely feedback with respect to such trials and will specify to TISICS which aspects of the tested SiC Fiber does not provide the performance and functionality required by Evergreen and/or ESLR1.

          (e) TISICS’ obligations to make and deliver copies of TISICS Materials shall be subject to any applicable Third Party copyright and confidentiality agreements. TISICS shall deliver to ESLR1 updates (if any) to such TISICS Materials on no less than a calendar quarterly

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basis to reflect changes in or additions to (if any) the TISICS Materials. Further, TISICS shall update Exhibit B upon ESLR1’s reasonable request in order to maintain an up-to-date inventory of TISICS IP within the PV Field. and at a minimum to maintain a complete and accurate list of all Patents contained within the TISICS IP (the “TISICS Patents”).

     3.2 Fiber Development Documentation. At the Effective Date TISICS will not be able to determine which TISICS IP is essential to the development, manufacture and maintenance of SiC Fiber for the PV Field. Without limiting the generality of Section 3.1, upon completion of the development of Technology for manufacturing SiC Fiber in the PV Field, TISICS will provide all TISICS Materials generated for such Technology and any background TISICS Materials deemed to be essential for the future maintenance and control of such Technology.

     3.3 Outsourced Services. Notwithstanding the foregoing, the Parties acknowledge and agree that ESLR1 may request that Evergreen (or any of ESLR1’s other Affiliates), TISICS (or any of TISICS’ Affiliates) or Third Parties perform, whether on a permanent or temporary basis, certain services (such as services relating to infrastructure, management, operations, technology support and development) to the extent that ESLR1 determines, after consultation with the relevant entity, that such entity can perform such services on a more cost-effective basis than if ESLR1 were to perform such services itself. To the extent that Evergreen (or any of ESLR1’s other Affiliates) or TISICS (or any of TISICS’ Affiliates) agrees to perform such services, ESLR1 shall pay for such services on a cost-plus basis to be reasonably determined by the applicable parties. Outsourcing to a TISICS Competitor for performance of the services described in this section will be subject to the consent of TISICS, such consent to be withheld by TISICS in its sole discretion.

     3.4 Compliance with Laws. The Parties shall comply with all applicable Laws (including any intellectual property marking Laws) in the exercise of their rights or performance of their obligations hereunder.

4. Payments.

     4.1 Payments. Subject to the terms and conditions hereof (including Section 4.4), ESLR1 shall pay TISICS the Conditional Fees and PV Royalties (each as defined in Exhibit D) as set forth in Exhibit D.

          (a) Further, subject to Section 4.4, in the event (i) ESLR1 grants a sublicense to a Third Party (other than a Key Customer of ESLR1) pursuant to Section 2.1(b) and (ii) in consideration for the grant of such sublicense, such ESLR1 Sublicensee pays ESLR1 amounts in the form of a royalty or sublicense fee based on the Sale of SiC Fiber by such ESLR Sublicensee in the PV Field, which amounts are in excess of the PV Royalties payable to TISICS hereunder based on such Sale or, if applicable, the underlying sale which triggered ESLR1’s obligation to pay PV Royalties (such excess, the “Excess Fees”), then during the Term ESLR1 shall pay TISICS an amount (the “PV Shared Excess Fees”) equal to the Excess Percentage (as defined below) of the Excess Fees received by ESLR1. The “Excess Percentage” shall equal (i) [****] percent ([****]%) if TISICS has not exercised Tranche One (as defined in that certain LLC Membership Interest Purchase Option granted to TISICS dated as of September 5, 2007 (the

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“Option”)), (ii) [****] percent ([****] %) if TISICS exercises Tranche One or (iii) [****] percent ([****] %) if TISICS exercises Tranche Two (as defined in the Option).

          (b) ESLR1 shall not have any obligation to pay any PV Shared Excess Fees based on the following: (i) any sales by Evergreen, ESLR1’s other Affiliates or ESLR1’s Key Customers as ELSR1 Sublicensees hereunder, (ii) any sales by ESLR1 Sublicensees of SiC Fiber to Evergreen, ESLR1’s other Affiliates or ESLR1’s Key Customers in or after Period 7 or to Third Parties (other than ESLR1’s Key Customers) in or after Year 11; and (iii) any sales by ESLR1 Sublicensees of SiC Fiber to the extent that the the manufacture or sale of such SiC Fiber does not infringe or misappropriate or otherwise involve the use of any of the the TISICS IP (other than any Joint IP).

     4.2 Payment Terms; Reports; Records; Taxes; Audits.

          (a) Payment. All payments to be made by ESLR1 hereunder shall be made in U.S. dollars by wire transfer to such bank account as TISICS may designate.

          (b) Reports. For as long as PV Royalties or PV Shared Excess Fees are due hereunder, ESLR1 shall furnish to TISICS a written report, within [****] days after the end of each calendar quarter, showing the amount of (i) SiC Fiber Sold for which PV Royalties and/or PV Shared Excess Fees are due hereunder and (ii) the PV Royalties and/or PV Shared Excess Fees due for such calendar quarter. PV Royalty and PV Shared Excess Fee payments for each calendar quarter shall be due at the same time as such written report for such calendar quarter. All such reports shall be treated as Confidential Information of ESLR1.

          (c) Records. ESLR1 and ESLR1 Sublicensees shall keep adequate books and records of accounting for the purpose of calculating all PV Royalties and PV Shared Excess Fees payable to TISICS hereunder. For the [****] years following the end of the calendar year to which each shall pertain, such books and records of accounting shall be kept at each of their principal place of business and shall be open for inspection at reasonable times and upon reasonable notice by an independent certified accountant selected by TISICS, and which is reasonably acceptable to ESLR1, for the sole purpose of inspecting the PV Royalties and PV Shared Excess Fees due to TISICS under this Agreement. In no event shall such inspections be conducted hereunder more frequently than once every [****]. Such accountant must have executed and delivered to ESLR1 and ESLR1 Sublicensees, as applicable, a confidentiality agreement as reasonably requested by ESLR1, which shall include provisions limiting such accountant’s disclosure to TISICS to only the results and basis for such results of such inspection. The results of such inspection, if any, shall be binding on both Parties. Any underpayments shall be paid by ESLR1 within [****] days of notification of the results of such inspection. Any overpayments shall be fully creditable against amounts payable in subsequent payment periods. TISICS shall pay for such inspections, except that in the event there is any upward adjustment in aggregate PV Royalties and PV Shared Excess Fees payable for any calendar year shown by such inspection of more than [****] percent ([****] %) of the amount paid, ESLR1 shall reimburse TISICS for any reasonable out-of-pocket costs of such accountant.

     4.3 Taxes and Interest; Setoff.

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          (a) Taxes. Any applicable withholding tax shall be deducted by ESLR1 from any payments due under this Agreement and borne by TISICS. ESLR1 shall cooperate with TISICS to enable TISICS to claim exemption therefrom under any double taxation or similar agreement in force and shall use commercially reasonable efforts to provide to TISICS proper evidence of payments of withholding tax and assist TISICS by obtaining or providing in as far as possible the required documentation for the purpose of TISICS’ tax returns.

          (b) Interest. ESLR1 shall pay TISICS interest on any payments that are not paid on or before the date such payments are due under this Agreement at a rate of one and one-half percent (1.5%) per month or the maximum applicable legal rate, if less, calculated on the total number of days payment is delinquent.

          (c) Setoff. ESLR1 shall have the right to setoff any PV Royalties and PV Shared Excess Fees due TISICS hereunder against amounts owed by TISICS to ESLR1 under the Supply Agreement, provided that PV Royalties and PV Shared Excess Fees will first be set-off against payments due under that certain Promissory Note, dated as of September 5, 2007 (“Loan Agreement”), and only to the extent that there are any remaining PV Royalties and PV Shared Excess Fees available for set-off after such payments have been made, will these be applied against amounts due by TISICS to ESLR1 under the Supply Agreement.

          (d) Credits Against Overhead Payments. Further, ESLR1 shall have the right to credit any PV Royalties, PV Shared Excess Fees, Conditional Fees or other amounts due to TISICS hereunder against any Overhead Overage Payments (as defined in the Facilities and Start Up Agreement) made to TISICS under the Facilities and Start Up Agreement. For the avoidance of doubt, even if ESLR1 does not credit such PV Royalties, PV Shared Excess Fees, Conditional Fees or other amounts due to TISICS hereunder against such Overhead Overage Payments, the amount of Overhead Overage Payments against which such royalties, fees or amounts are creditable under this Section 4.3(d) shall not bear interest or be refundable (without limiting the refundability of Overhead Overage Payments for other reasons).

          (e) Priority. After the Maturity Date (as defined in the Loan Agreement), any PV Royalties and PV Shared Excess Fees that may be set-off or credited in accordance with Section 4.3(c) or 4.3(d) shall first be set-off against amounts owed by TISICS to ESLR1 under the Supply Agreement or Loan Agreement pursuant to Section 4.3(c) before such PV Royalties and PV Shared Excess Fees may be credited against Overhead Overage Payments pursuant to Section 4.3(d).

     4.4 Default of Note. If Evergreen elects to exercise its Note Default Option (as defined in the Loan Agreement), then automatically, without any further action of the Parties, (i) the license set forth in Section 2.1(a) shall become royalty-free and fully paid-up, (ii) ESLR1 shall not owe any future Conditional Fees, PV Royalties and/or PV Shared Excess Fees or other future fees or payments hereunder, and (iii) Sections 4.1, 4.2, 4.3(b) and Exhibit D shall terminate and have no further force or effect.

5. Prosecution; Infringement.

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     5.1 Appointment and Cooperation. With respect to the rights and activities of ESLR1 set forth in this Section 5, TISICS hereby appoints ESLR1 as its agent for such purposes with the authority to act on TISICS’ behalf with respect to the TISICS IP relating to the PV Field. TISICS shall cooperate with ESLR1 in the exercise of ESLR1’s authority granted herein, and shall execute such documents and take such additional action as ESLR1 may reasonably request in connection therewith.

     5.2 Patent Prosecution and Maintenance.

          (a) By TISICS. TISICS shall, at its sole cost, be solely responsible for and make all decisions with respect to the preparation, prosecution (including any interferences, oppositions, reissue proceedings and reexaminations) and maintenance of the TISICS Patents. TISICS shall provide to ESLR1 copies of any papers relating to the filing, prosecution or maintenance of TISICS Patents within the PV Field promptly upon receipt and shall provide ESLR1 with a reasonable opportunity to review and comment on such papers with respect to applications within the PV Field.

          (b) By ESLR1. TISICS shall not knowingly permit any of the TISICS Patents within the PV Field to be abandoned in any country without ESLR1 first being given an opportunity to assume full responsibility for the continued prosecution and maintenance of same. In the event that TISICS decides not to continue the prosecution or maintenance of any TISICS Patent within the PV Field in any country, TISICS shall provide ESLR1 with notice of this decision at least [****] days prior to any pending lapse or abandonment thereof. In the event that ESLR1 elects to assume responsibility for such prosecution and maintenance within [****] days of TISICS’ notice, Section 5.2(a) shall thereafter apply to such TISICS Patent(s) except that the role of TISICS and ESLR1 shall be reversed thereunder (including that ESLR1 shall be solely responsible for all costs arising from those activities). Such TISICS Patent(s) shall otherwise continue to be subject to all of the terms and conditions of the Agreement in the same way as the other TISICS Patents within the PV Field.

     5.3 Enforcement of TISICS IP.

          (a) Notice of Infringement. In the event that either Party becomes aware of a suspected infringement or misappropriation of the subject matter of any TISICS IP in the PV Field, or any such TISICS IP is challenged in any action or proceeding (other than any patent interferences, oppositions, reissue proceedings or reexaminations, which are addressed in Section 5.2), such Party shall notify the other Party promptly, and following such notification, the Parties shall confer.

          (b) Enforcement. In the case of infringement or misappropriation of the TISICS IP in the PV Field, ESLR1 shall have the right, but not the obligation, to initiate and prosecute such legal action or proceeding or to control the defense of any action or proceeding relating to the ESLR1 IP (other than any patent interferences, oppositions, reissue proceedings or reexaminations, which are addressed in Section 5.2), in its own discretion and at its own expense. If ESLR1 fails to take steps reasonable under the circumstances to resolve such actual or suspected infringement or misappropriation or initiate a lawsuit within [****] days of receiving written notice of such actual or suspected infringement or misappropriation from TISICS or delivering written notice of such actual or suspected infringement to TISICS, as applicable, TISICS shall have the right, but not the obligation, to initiate an action or proceeding, in its own discretion and at its own expense.

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          (c) Withdrawal. If either Party brings an action or proceeding under this Section 5.3 and subsequently ceases to pursue or withdraws from such action or proceeding, it shall promptly notify the other Party and the other Party may substitute itself for the withdrawing Party under the terms of this Section 5.3.

          (d) Recovery Allocation. In the event that either Party exercises the rights conferred in this Section 5.3 and recovers any damages or other sums in such action or proceeding or in settlement thereof, such damages or other sums recovered shall first be applied to all out-of-pocket costs and expenses incurred by the Parties in connection therewith (including attorneys’ fees), unless not reimbursable hereunder. If such recovery is insufficient to cover all such costs and expenses of both Parties, the controlling Party’s costs shall be paid in full first before any of the other Party’s costs. If after such reimbursement any funds shall remain from such damages or other sums recovered, such funds shall be retained by the Party that controlled the action or proceeding under this Section 5.3.

6. Confidentiality.

     6.1 Definition of Confidential Information. “Confidential Information” means, subject to the exceptions set forth below in Section 6.2, any information or data, regardless of whether it is in tangible form, of a Party (the “Disclosing Party”) that the Disclosing Party has either marked as confidential or proprietary, or has identified in writing as confidential or proprietary within thirty (30) days of disclosure to the other Party (the “Receiving Party”), and has provided to the Receiving Party under this Agreement; provided that any Disclosing Party’s business plans, strategies, Technology, customers, customer lists, billing records and products shall be deemed Confidential Information of the Disclosing Party even if not so marked or identified and the terms of this Agreement will be deemed Confidential Information. For the avoidance of doubt, any trade secrets contained within the TISICS IP with application in the PV Field shall be deemed the Confidential Information of both Parties, subject to the provisions of this Section 6.

     6.2 Exceptions. The obligations in Section 6.1 shall not apply with respect to any portion of the Confidential Information that the Receiving Party can show by competent proof: (i) is publicly disclosed by the Disclosing Party, either before or after it is disclosed to the Receiving Party hereunder; (ii) was known to the Receiving Party or any of its Affiliates, without any obligation to keep it confidential or any restriction on its use, prior to disclosure by the Disclosing Party; (iii) is subsequently disclosed to the Receiving Party or any of its Affiliates by a Third Party lawfully in possession thereof and without any obligation to keep it confidential or any restriction on its use; (iv) is published by a Third Party or otherwise becomes publicly available or enters the public domain, either before or after it is disclosed to the Receiving Party; or (v) has been independently developed by employees or contractors of the Receiving Party or any of its Affiliates without the aid, application or use of Confidential Information of the Disclosing Party.

     6.3 Confidentiality Obligations. Except as expressly provided herein, each of the Parties agrees that, for itself and its Affiliates, and for as long as this Agreement is in effect and thereafter, a Party and its Affiliates (the “Receiving Party”) receiving Confidential Information of the other Party or its Affiliates (the “Disclosing Party”) shall not (i) use any such Confidential Information in any way, for its own account or the account of any Third Party, except for the

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exercise of its rights and performance of its obligations under this Agreement, or (ii) disclose any such Confidential Information to any party, other than furnishing such Confidential Information to (a) its employees and consultants who are required to have access to the Confidential Information in connection with the exercise of its rights and performance of its obligations under this Agreement, (b) investors, prospective acquirers and professional advisers and (c) ESLR1 Sublicensees and TISICS Sublicensees; provided that such employees and consultants, investors, prospective acquirers and professional advisers and ESLR1 Sublicensees and TISICS Sublicensees are bound by written agreements or, in the case of professional advisers, ethical duties respecting such Confidential Information in accordance with the terms of this Section 6. The Receiving Party agrees that it will not allow any unauthorized Person access to such Confidential Information, and that the Receiving Party will use reasonable measures to protect the confidentiality of such Confidential Information, including implementing and enforcing procedures to minimize the possibility of unauthorized use or copying of such Confidential Information. In the event that the Receiving Party is required by law to make any disclosure of any of such Confidential Information, by subpoena, judicial or administrative order or otherwise, the Receiving Party shall first give written notice of such requirement to the Disclosing Party, and shall permit the Disclosing Party to intervene in any relevant proceedings to protect its interests in such Confidential Information, and provide reasonable cooperation and assistance to the Disclosing Party in seeking to obtain such protection. Notwithstanding the foregoing, ESLR1 and ESLR1 Sublicensees may make such disclosures of Technology covered by the TISICS IP specifically concerning SiC Fiber and relating to the PV Field as any of them may deem reasonably necessary for the purpose of Exploiting the SiC Fiber in the PV Field.

     6.4 Terms of this Agreement; Publicity. The Parties agree that the terms of this Agreement shall be treated as Confidential Information of both Parties, and thus may be disclosed only as permitted by Section 6.3. Notwithstanding the foregoing, TISICS agrees that Evergreen may file a copy of this Agreement with the United States Securities and Exchange Commission and other similar or comparable governmental bodies, authorities or agencies, if necessary. Subject to the foregoing, neither Party shall make any public announcements relating to the terms, conditions or existence of this Agreement without the prior written consent of the other Party.

     6.5 Return of Confidential Information. The Receiving Party agrees that, upon the termination of this Agreement, the Receiving Party will immediately return all Confidential Information of the Disclosing Party and any tangible expression thereof (including all copies, summaries and notes of the contents or parts thereof) to the Disclosing Party and no part thereof shall be retained by the Receiving Party in any form and/or for any reason; provided that the Receiving Party may retain one copy of such Confidential Information for archival purposes to satisfy the Receiving Party’s obligations under any applicable laws. Notwithstanding the foregoing, ESLR1 shall not be obligated to return any Confidential Information of TISICS that is in whole or in part the subject of the license grant set forth in Section 2.1(a), the license granted to ESLR1 in the Composite Field License Agreement or the license granted to ESLR1 in the Other Fields License Agreement, in each case, only for so long as such license is effective.

7. Representations and Warranties; Disclaimer of Implied Warranties.

     7.1 Representations and Warranties.

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          (a) Mutual. Each Party hereby represents and warrants to the other Party as of the Effective Date that:

          (i) such Party is a corporation duly organized, validly existing and in good standing under the laws of the state or jurisdiction in which such Party is incorporated, and such Party has full right and authority to enter into this Agreement and to grant the licenses and other rights, without payment to a Third Party, granted by such Party as herein described;

          (ii) this Agreement has been duly authorized by all requisite corporate action, and when executed and delivered will become a valid and binding contract of such Party enforceable against such Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and other law affecting creditors’ rights generally from time to time if effect, and to general principles of equity;

          (iii) the execution, delivery and performance of this Agreement does not conflict with any other agreement, contract, instrument or understanding, oral or written, to which such Party is a party, or by which it is bound, nor will it violate any Law applicable to such Party; and

          (iv) all necessary consents, approvals and authorizations of all regulatory and governmental authorities and other Persons required to be obtained by such Party in connection with the execution and delivery of this Agreement and the performance of such Party’s obligations hereunder have been obtained.

          (b) TISICS. In addition, TISICS hereby represents and warrants to ESLR1 as of the Effective Date that:

          (i) Exhibit B-1 contains an accurate list of all TISICS IP relevant to SiC Fiber manufacturing in the PV Field. Exhibit B-2 contains an accurate list of TISICS IP relating to SiC Fiber manufacturing for all fields as of the Effective Date (except to the extent already listed on Exhibit B-1). Exhibit B-3 contains a complete and accurate list of (A) all licenses, sublicenses or other agreements under which TISICS or its Affiliates has granted rights to others in TISICS IP (“Licenses Out”), (B) all licenses, sublicenses or other agreements under which TISICS or its Affiliates are granted rights by others in the TISICS IP (“Licenses In”) and (C) any obligations of exclusivity, covenants not to sue, noncompetition, nonsolicitation, right of first refusal, parity of treatment and/or most favored nation status, or right of first negotiation to which TISICS or its Affiliates is subject in favor of a Third Party that relate to and/or restrict any of the TISICS IP.

          (ii) Except as set forth in Exhibit E:

               (A) with respect to the TISICS IP (1) owned or purported to be owned by TISICS or an Affiliate of TISICS, TISICS or an Affiliate of TISICS exclusively owns such TISICS IP and, without payment to a Third Party, possesses adequate and enforceable rights in and to such TISICS IP as necessary to Exploit SiC Fiber in the PV Field and the Construction and/or Operation of the ESLR1 Facilities, and (2) otherwise Controlled by TISICS or an Affiliate of

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TISICS, TISICS or an Affiliate of TISICS possesses adequate and enforceable rights in and to all such TISICS IP as necessary to Exploit SiC Fiber in the PV Field and the Construction and/or Operation of the ESLR1 Facilities; in the case of the foregoing clauses (1) and (2) above, free and clear of all Encumbrances;

               (B) the TISICS IP constitutes all of the Intellectual Property Rights (1) used in the designing, manufacturing, selling, distributing and commercializing the SiC Fiber in the PV Field and (2) necessary for the Construction and/or Operation of the ESLR1 Facilities to manufacture SiC Fiber in the PV Field;

               (C) all TISICS IP that has been issued by, or registered, or is the subject of an application filed with, as applicable, the U.S. Patent and Trademark Office, the U.S. Copyright Office or any similar office or agency anywhere in the world is currently in compliance with formal legal requirements (including, as applicable, payment of filing, examination and maintenance fees, inventor declarations, proofs of working or use, timely post-registration filing of affidavits of use and incontestability, and renewal applications), and, to the knowledge of TISICS, all TISICS IP is valid and enforceable;

               (D) there are no pending or, to the knowledge of TISICS, threatened claims against TISICS or any of its employees alleging that any practice of the TISICS IP infringes or violates (or in the past infringed or violated) the rights of others in, to or under any Intellectual Property Rights (“Third Party IP”) or constitutes a misappropriation of (or in the past constituted a misappropriation of) any subject matter of any Intellectual Property Rights of any Person or that any of the TISICS IP is invalid or unenforceable;

               (E) to the knowledge of TISICS, the practice of the TISICS IP does not infringe on or violate (and has not in the past infringed on or violated) any Third Party IP or constitute a misappropriation of (and has not in the past constituted a misappropriation of) any subject matter of any Third Party IP;

               (F) all former and current employees, consultants and contractors of TISICS and its Affiliates have executed written instruments with TISICS or its Affiliates, as applicable, that assign to TISICS or its Affiliates all right, title and interest in and to any and all TISICS IP and all Technology embodying the TISICS IP;

               (G) to the knowledge of TISICS, there is no, nor has there been any, infringement or violation by any Person of any TISICS IP or the TISICS’ or its Affiliates rights therein or thereto, and there is no, nor has there been any, misappropriation by any Person of any of the TISICS IP or the subject matter thereof; and

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               (H) TISICS and its Affiliates has taken reasonable security measures to protect the secrecy, confidentiality and value of all trade secrets contained in the TISICS IP.

     7.2 Disclaimer of Implied Warranties. EXCEPT AS EXPRESSLY SET FORTH HEREIN, NEITHER TISICS NOR ESLR1 MAKES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE OR NON-INFRINGEMENT.

     7.3 Without limiting Section 9, for the avoidance of doubt, any warranty given in Section 7.1 in relation to TISICS IP excludes any TISICS IP that is not Controlled by TISICS or any of its Affiliates as of the Effective Date.

8. LIMITATION OF LIABILITY.

     8.1 EXCEPT FOR ANY LIABILITY ARISING FROM (A) A BREACH BY TISICS OR ITS AFFILIATES OF THE EXCLUSIVE NATURE OF THE LICENSE GRANTED TO ESLR1 IN SECTION 2.1(a) OR ANY OTHER EXCLUSIVITY PROVISIONS SET FORTH HEREIN, (B) A BREACH BY A PARTY OF ITS CONFIDENTIALITY OBLIGATIONS UNDER SECTION 6 (C) TISICS’ INDEMNIFICATION OBLIGATIONS SET FORTH IN SECTION 9, AND/OR (D) A BREACH BY ESLR1 OR ITS AFFILIATES OF SECTION 2.1 IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, INCIDENTAL, INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES (INCLUDING ANY DAMAGES RESULTING FROM LOSS OF USE, LOSS OF DATA, LOSS OF PROFITS OR LOSS OF BUSINESS) ARISING IN ANY WAY UNDER THIS AGREEMENT AND UNDER ANY THEORY OF LIABILITY (INCLUDING BREACH OF CONTRACT, STRICT LIABILITY, NEGLIGENCE, OR OTHER TORT), EVEN IF SUCH PARTY IS INFORMED IN ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES.

     8.2 EXCEPT FOR ANY LIABILITY ARISING FROM (A) A BREACH BY TISICS OR ITS AFFILIATES OF THE EXCLUSIVE NATURE OF THE LICENSE GRANTED TO ESLR1 IN SECTION 2.1(a) OR ANY OTHER EXCLUSIVITY PROVISIONS SET FORTH HEREIN, (B) A BREACH BY A PARTY OF ITS CONFIDENTIALITY OBLIGATIONS UNDER SECTION 6 (C) TISICS’ INDEMNIFICATION OBLIGATIONS SET FORTH IN SECTION 9 AND/OR (D) A BREACH BY ESLR1 OR ITS AFFILIATES OF SECTION 2.1, EACH PARTY’S CUMULATIVE LIABILITY TO THE OTHER PARTY OR ANY THIRD PARTY IN CONTRACT, TORT (INCLUDING NEGLIGENCE) OR BREACH OF STATUTORY DUTY, OR OTHERWISE, FOR ANY LOSS OR DAMAGES RESULTING FROM ANY CLAIMS, DEMANDS, OR ACTIONS ARISING OUT OF OR RELATING TO THIS AGREEMENT, SHALL NOT EXCEED IN THE AGGREGATE THE GREATER OF (I) [****] OR (II) THE AGGREGATE AMOUNT OF PV ROYALTIES, CONDITIONAL FEES, PV SHARED EXCESS FEES AND OTHER AMOUNTS PAID OR PAYABLE BY ESLR1 TO TISICS HEREUNDER.

9. Indemnification.

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     9.1 TISICS Indemnity. TISICS on its own behalf and on behalf of its successors, executors, administrators, estate, heirs and assigns, hereby agrees to indemnify, defend and hold ESLR1 and ESLR1 Sublicensees, and each of their Affiliates and direct and indirect partners and members, stockholders, directors, officers, employees and agents and each person who controls any of them within the meaning of Section 15 of the Securities Act or 1933, as amended, or Section 20 of the Exchange Act of 1934, as amended, (each a “ESLR1 Indemnitee,” and collectively, the “ESLR1 Indemnitees”) harmless from and against all claims, liabilities, threatened claims, damages, expenses (including reasonable attorneys’ fees), suits, proceedings, losses or judgments, whether for money or equitable relief, of any kind (collectively, “Losses,” and, each a “Loss”), arising from (i) any claim that the exercise by any of the ESLR1 Indemnitees of any rights under the TISICS IP (excluding Joint IP) granted herein infringes on, constitutes a misappropriation of the subject matter of, or otherwise violates any Third Party IP, (ii) any breach or alleged breach of any of the representations or warranties of TISICS set forth in Section 7 or (iii) the gross negligence, recklessness or willful misconduct of TISICS or any of its Affiliates or TISICS Sublicensees.

     9.2 ESLR1 Indemnity. ESLR1 on its own behalf and on behalf of its successors, executors, administrators, estate, heirs and assigns, hereby agrees to indemnify, defend and hold TISICS, and each of its Affiliates and direct and indirect partners and members, stockholders, directors, officers, employees and agents and each person who controls any of them within the meaning of Section 15 of the Securities Act or 1933, as amended, or Section 20 of the Exchange Act of 1934, as amended, (each a “TISICS Indemnitee,” and collectively, the “TISICS Indemnitees”) harmless from and against all Losses, arising from (i) any Third Party claim that any use of any Technology embodying the TISICS IP (excluding Joint IP) not in accordance with this Agreement or alteration of any such Technology, in each case, by any of ESLR1 or ESLR1 Sublicensees infringes on, constitutes a misappropriation of the subject matter of, or otherwise violates any Third Party IP, solely to the extent that such Loss would not have arisen but for such alteration or improper or unauthorized use, (ii) any breach or alleged breach of any of the representations or warranties of ESLR1 set forth in Section 7 or (iii) the gross negligence, recklessness or willful misconduct of ESLR1 or ESLR1 Sublicensees.

     9.3 The ESLR1 Indemnitees and the TISICS Indemnitees are together referred to in the remainder of this section 9 as “the Indemnitees” and ESLR1 and TISICS each as an “Indemnifying Party” as the context requires.

     9.4 Notice of Loss. An Indemnitee shall give the Indemnifying Party notice of any matter which an Indemnitee has determined has given or could give rise to a right of indemnification under this Agreement, within 60 days of such determination, stating the amount of the Loss, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement in respect of which such right of indemnification is claimed or arises.

     9.5 Third Party Claims. If an Indemnitee shall receive notice of any action, audit, demand or assessment (each, a “Third Party Claim”) against it or which may give rise to a claim for Loss under this Section 9, within [****] days of the receipt of such notice, the Indemnitee shall give the Indemnifying Party notice of such Third Party Claim; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations

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under this Section 9 except to the extent that the Indemnifying Party is materially prejudiced by such failure. Subject to the following sentence, the Indemnifying Party may assume control of the defense of any Third Party Claim provided that (i) the Indemnifying Party shall (within [****] business days of notice from Indemnitee) deliver to the Indemnitee an unconditional written agreement to defend, and satisfy if the defense is unsuccessful, such Third Party Claim at the Indemnifying Party’s sole cost and expense and (ii) the Indemnifying Party provides adequate assurances that it is financially capable for providing indemnification for such Third Party Claim; provided, however, in any defense assumed by it, the Indemnifying Party will promptly engage qualified reputable attorneys, who shall be subject to the reasonable approval of the Indemnitee; and provided, further, if at any time the Indemnitee determines that it is in its best interests to assume and control the defense of such Third Party Claim, the Indemnitee shall be entitled to assume and control such defense (without limiting the Indemnifying Party’s other indemnification obligations hereunder). Notwithstanding the foregoing, if there exists a conflict of interest that would make it inappropriate for the same counsel to represent both the Indemnitee and the Indemnifying Party as determined in the reasonable judgment of the Indemnitee, then the Indemnitee shall be entitled to retain its own counsel in each jurisdiction for which the Indemnitee determines counsel is required, at the expense of the Indemnifying Party. In the event that the Indemnifying Party exercises the right to undertake any such defense against any such Third Party Claim as provided above, the Indemnitee shall cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party, at the Indemnifying Party’s expense, all witnesses, pertinent records, materials and information in the Indemnitee’s possession or under the Indemnitee’s control relating thereto as is reasonably required by the Indemnifying Party. Similarly, in the event the Indemnitee is, directly or indirectly, conducting the defense against any such Third Party Claim, the Indemnifying Party shall cooperate with the Indemnitee in such defense and make available to the Indemnitee, at the Indemnifying Party’s expense, all such witnesses, records, materials and information in its possession or under its control relating thereto as is reasonably required by the Indemnitee. No such Third Party Claim may be settled by the Indemnifying Party without the prior written consent of the Indemnitee unless the settlement contains a full and complete release of the Indemnitee and does not impose any equitable relief or any other restriction or condition on any of them.

     9.6 Indemnification Procedure. If (and to the extent) an Indemnifying Party is responsible pursuant hereto to indemnify an Indemnitee in respect to Third Party Claims, then within ten days after the occurrence of a final determination, finding, order, and/or judgment (a “Final Determination”) (or sooner if required by such determination), the Indemnifying Party shall pay the Indemnitee , in immediately available funds denominated in US Dollars, the amount of any Losses (or such portion thereof as the Indemnifying Party shall be responsible for pursuant to the provisions hereof). In the event that any Losses incurred by the Indemnitee do not involve payment by the Indemnitee of a Third Party claim, then, if (and to the extent) the Indemnifying Party is responsible pursuant hereto to indemnify the Indemnitee against such Losses, the Indemnifying Party shall within ten days after agreement on the amount of the Losses, or the occurrence of a Final Determination of such amount, pay to the Indemnitee, in immediately available funds the amount of such Losses (or such portion thereof as the Indemnifying Party shall be responsible for pursuant to the provisions hereof).

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     9.7 Cost Offsets. Each of ESLR1 or TISICS as an Indemnitee shall have the right to reduce any payments owed by it to the other under any written agreement between ESLR1 and TISICS by the amount of any indemnifiable Losses suffered by any such Indemnitee (including investigation, defense, settlement or judgment satisfaction and all professional fees).

10. Term; Termination.

     10.1 Term. This Agreement shall commence as of the Effective Date and, unless sooner terminated in accordance with the terms hereof or by mutual written consent, shall continue until the later of the end of Period 6 or [****] (as defined in Exhibit D) (the “Term”).

     10.2 Termination.

          (a) Termination. In addition to any other termination rights provided for in this Agreement, either Party may terminate this Agreement immediately upon written notice to the other Party in the event of a material breach of this Agreement by the other Party if such breach is incapable of cure or the breaching Party otherwise fails to cure such breach within [****] days following notice of such breach from the non-breaching Party.

          (b) Abandonment. In the event an Abandonment of Construction of ESLR1 Facilities (as defined below) occurs prior to the completion of the initial construction of manufacturing facilities for the Exploitation of SiC Fiber owned or controlled by ESLR1, TISICS may terminate this Agreement immediately upon written notice to ESLR1. “Abandonment of Construction of ESLR1 Facilities” means ESLR1’s failure, manifested over a period of [****] or more consecutive days during the Term, to use reasonable efforts to perform activities relating to the design, construction and/or development of manufacturing facilities for the Exploitation of SiC Fiber, excluding any failure due to (i) a breach by TISICS of its obligations under this Agreement or the Facilities and Start Up Agreement or (ii) causes beyond ESLR1’s reasonable control, such as any of the following events (each, a “Force Majeure Event”): (A) any fire, explosion, unusually severe weather, natural disaster or Act of God; (B) epidemic; any nuclear, biological, chemical, or similar attack; any other public health or safety emergency; any act of terrorism; and any action reasonably taken in response to any of the foregoing; (C) any act of declared or undeclared war or of a public enemy, or any riot or insurrection; (D) damage to machinery or equipment; any disruption in transportation, communications, electric power or other utilities, or other vital infrastructure; or any means of disrupting or damaging internet or other computer networks or facilities; (E) any strike, lockout or other labor dispute or action; or (F) any action taken in response to any of the foregoing events by any civil or military authority. In the event that ESLR1 ceases to manufacture SiC Fiber for use within the PV Field for more than a period of [****] consecutive months following completion of the initial construction of the SiC Facilities, TISICS may terminate this Agreement immediately upon written notice to ESLR1, except if such cessation is due to (1) a breach by TISICS of its obligations under this Agreement or the Facilities and Start Up Agreement or (2) causes beyond ESLR1’s reasonable control, such as a Force Majeure Event.

     10.3 Termination Damages. Without prejudice to any other remedies either Party may expressly have hereunder in respect of any breach of this Agreement, neither Party shall be liable

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to the other for damages by solely reason of the termination or cancellation of this Agreement in accordance with the provisions set forth above.

     10.4 Continuing Obligations. The following shall survive the expiration or termination hereof: (i) the obligation of ESLR1 to pay any accrued, but unpaid, payments due to TISICS hereunder (subject to Section 4.4), (ii) the obligation of TISICS to pay any accrued, but unpaid, taxes, duties, and other levies (if any) applied by any government authority on payments made by ESLR1 to TISICS hereunder (in accordance with Section 4.3(a)), and (iii) the provisions of this Section 10.4, Sections 1 (and any other definitions contained herein), 2.1, 2.2, 2.3, 2.4, 2.5, 2.6, 3.1(b), 3.1(e), 3.3, 3.4, 4.2(c), 4.3, 4.4, 5, 6, 7, 8, 9, 10.3, 10.5 and 11 and the last sentence of Section 3.1, provided that, subject to Section 4.4, if TISICS terminates this Agreement for Abandonment of Construction of ESLR1 Facilities, the provisions of Section 2.1 shall not survive such termination except as otherwise set forth in Section 10.5.

     10.5 Inventory Sell-Down Period. Without limiting Section 4.4, upon any termination of this Agreement pursuant to Section 10.2(b), ESLR1 may continue to distribute its then-current inventory of SiC Fiber and manufacture and distribute any inventory of SiC Fiber for orders then-confirmed by ESLR1. During this period, the provisions of this Agreement shall continue in force to the extent required for the limited purpose of permitting ESLR1 to distribute its inventory of SiC Fiber in accordance with the foregoing.

11. Miscellaneous.

     11.1 Fees and Expenses. The Parties shall pay all of their own costs, fees and expenses incurred in connection with this Agreement and the consummation (or the preparation for the consummation) of the transactions contemplated hereby (including fees and expenses of legal counsel, accountants and other representatives and consultants and advisors and due diligence (including travel-related) costs, fees and expenses).

     11.2 Remedies. Each Party acknowledges and agrees that the other Party would be damaged irreparably in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached. Accordingly, each Party agrees that the other Party shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having jurisdiction over the Parties and the matter.

     11.3 Consent to Amendments. This Agreement may be amended, or any provision of this Agreement may be waived; provided that any such amendment or waiver shall be binding upon each Party only if agreed by each party and with the terms of such agreement set forth in writing executed by each Party and referring specifically to the provision alleged to have been amended or waived. No course of dealing between or among the Parties shall be deemed effective to modify, amend or discharge any part of this Agreement or any rights or obligations of any Party under or by reason of this Agreement.

     11.4 Relationship of Parties. The relationship of ESLR1 and TISICS created under this Agreement shall be that of independent contractors. Nothing in this Agreement shall be

21

construed to place the Parties hereto in an agency, employment, franchise, joint venture, or partnership relationship. Neither Party shall have the authority to obligate or bind the other in any manner with respect to the transaction contemplated by this Agreement, and nothing herein contained shall give rise or is intended to give rise to any rights of any kind to any Third Parties. Neither Party will represent to the contrary, either expressly, implicitly or otherwise.

     11.5 Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given when delivered personally to the recipient, three (3) days after being sent to the recipient by reputable overnight courier service (charges prepaid), upon machine-generated acknowledgment of receipt after transmittal by facsimile or seven (7) days after being mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid. Such notices, demands and other communications shall be sent to the Parties at the addresses indicated below or to such other address or to the attention of such other person as the recipient Party has specified by prior written notice to the sending Party.

to:

ESLR1:

138 Bartlett Street
Marlborough, MA 01752
Attention: Richard Chleboski
Telephone: (508) 597-2318
Telecopy: (508) 229-0747

with a copy to:
(which shall not constitute notice to ESLR1)

Goodwin Procter LLP
Exchange Place
53 State Street
Boston, MA 02109
Attention: William J. Schnoor, Jr., Esq.
Telephone: 617.570.1020
Telecopy: 617.523.1231

to:

TISICS:

TISICS Ltd
22 Invincible Road
Farnborough
Hampshire
GU14 7QU

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Attention: Stephen Kyle-Henney
Telephone: 44 1252 516678
Telecopy: 44 1252 548211

with a copy to:
(which shall not constitute notice to TISICS)

Hugh Fraser International Legal Consultancy
Al Attar Business Tower (Floor 20)
Sheikh Zayed Road
Dubai
United Arab Emirates
PO Box 118273
Attention: Hugh Fraser
Telephone: +971 4 332 0007
Telecopy: +971 4 332 0008

     11.6 Governing Law; Venue. All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement (including the Exhibits and Schedules hereto) shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. In furtherance of the foregoing, the internal law of the State of Delaware shall control the interpretation and construction of this Agreement (including the Exhibits and Schedules hereto), even though under that jurisdiction’s choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply. Any and all disputes between the Parties which may arise pursuant to this Agreement will be heard and determined before an appropriate federal court located in Boston, Massachusetts. The Parties hereto acknowledge that such court has the jurisdiction to interpret and enforce the provisions of this Agreement and the parties waive any and all objections that they may have as to personal jurisdiction or venue in the above courts.

     11.7 Assignment and Benefit.

          (a) ESLR1 may not assign this Agreement without the prior written consent of TISICS to any Third Party, which consent will not be unreasonably withheld, except that ESLR1 may assign this Agreement in whole without the prior written consent of TISICS to any Third Party, including a TISICS Competitor or any Affiliate of a TISICS Competitor, if such Third Party succeeds to all or substantially all the assets and business of ESLR1 or Evergreen by merger or purchase.

          (b) TISICS may not assign this Agreement without the prior written consent of ESLR1 to any Third Party, which consent will not be unreasonably withheld, except that TISICS may assign this Agreement in whole without the prior written consent of ESLR1 to any Third Party, including a ESLR1 Competitor or any Affiliate of a ESLR1 Competitor, if such Third Party succeeds to all or substantially all the assets and business of TISICS by merger or purchase.

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          (c) Any attempted assignment, delegation or transfer by an assigning Party in violation hereof shall be null and void. Subject to the foregoing, this Agreement shall be binding on the Parties and their successors and assigns.

     11.8 Consequences of Bankruptcy. All licenses and rights of granted under or pursuant to this Agreement shall be deemed to be, for the purposes of Section 365(n) of the United States Bankruptcy Code (the “Bankruptcy Code”), licenses to rights in “intellectual property” as defined under the Bankruptcy Code.

     11.9 Successors and Assigns; Third-Party Beneficiaries. Except as provided herein to the contrary, this Agreement and all of the covenants and agreements contained herein and rights, interests or obligations hereunder, by or on behalf of any of the Parties hereto, shall bind and inure to the benefit of the respective successors and assigns of the Parties hereto whether so expressed or not. This Agreement is for the sole benefit of the Parties and their permitted successors and assigns and nothing herein expressed or implied shall give or be construed to give any non-Party any rights, benefits or claims hereunder; provided, however, that each Indemnitee is intended to be, and is expressly made, a third party beneficiary of this Agreement, entitled to enforce its rights under Section 9 in its own name.

     11.10 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision of this Agreement or the application of any such provision to any Person or circumstance shall be held to be prohibited by, illegal or unenforceable under applicable Law in any respect by a court of competent jurisdiction, such provision shall be ineffective only to the extent of such prohibition or illegality or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

     11.11 Counterparts. This Agreement may be executed simultaneously in counterparts (including by means of telecopied signature pages), any one of which need not contain the signatures of more than one Party, but all such counterparts taken together shall constitute one and the same Agreement.

     11.12 No Waiver. Failure by either Party to enforce any provision of this Agreement shall not be deemed a waiver of future enforcement of that or any other provision.

     11.13 Descriptive Headings; Interpretation. The headings and captions used in this Agreement and the table of contents to this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Any capitalized terms used in any Schedule or Exhibit attached hereto and not otherwise defined therein shall have the meanings set forth in this Agreement. The use of the word “including” herein shall mean “including without limitation.” The Parties intend that each representation, warranty and covenant contained herein shall have independent significance. If any Party has breached any representation, warranty or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) which the Party has not breached shall not detract from or mitigate the fact that the Party is in breach of the first representation, warranty or covenant.

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     11.14 Entire Agreement. This Agreement and the agreements and documents referred to herein contain the entire agreement and understanding between the Parties with respect to the subject matter hereof and supersede all prior agreements and understandings, whether written or oral, relating to such subject matter in any way.

     11.15 Exhibits and Schedules. All Exhibits and Schedules attached hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein.

     11.16 No Strict Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement effective as of the date first above written.

ESLR1, LLC
By:	/s/ Richard G. Chleboski
	Name:	Richard G. Chleboski
	Title:	President and Secretary

TISICS LTD.
By:	/s/ Stephen Kyle-Henney
	Name:	Stephen Kyle-Henney
	Title:	Managing Director

EXHIBIT A

SiC Fiber Specifications

Outlined below are initial specifications (as of the Effective Date) for SiC Fiber necessary for applications in the PV Field. This is a general specification and may be modified as the SiC Fiber is developed.

Physical Characteristics: [****]

EXHIBIT B-1

TISICS IP: PV Field

Patents

[****]

EXHIBIT B-2

TISICS IP: All Fields

Patents

[****]

2

Registered Trade Marks

[****]

EXHIBIT B-3

Licenses Out, Licenses In and Other Rights

“‘Grant Back IP Licence’ means the [****].

2

EXHIBIT C

TISICS Materials as of the Effective Date

PV = Photo-Voltaic Fibre related materials

Note this is not an exhaustive list and additional documents may be added. In some instances customer names or other commercial details may need to be removed from the documents listed before release.

[****]

In addition to the above-listed reports and files, TISICS has the following materials, which constitute TISICS Materials:

[****]

EXHIBIT D

Conditional Fees and PV Royalties

[****]

SCHEDULE 1 TO EXHIBIT D

Full Cost

[****]

EXHIBIT E

Exceptions to Certain TISICS Representations and Warranties

None.

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, 333-143023, and 333-151885) 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.

PricewaterhouseCoopers LLP
Boston, MA
March 2, 2009

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, 333-143023 and 333-151885) of Evergreen Solar, Inc. of our report dated February 27, 2007 relating to the financial statements of EverQ GmbH as of December 31, 2006 and for the period from December 20 to December 31, 2006, which appears in the Annual Report on Form 10-K for the year ended December 31, 2008.

March 2, 2009
Leipzig, Germany

PricewaterhouseCoopers Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft

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 (or persons performing the equivalent functions):

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

March 2, 2009

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 (or persons performing the equivalent functions):

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

March 2, 2009

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, 2008 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

March 2, 2009

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, 2008 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

March 2, 2009

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

EVERQ GmbH, Thalheim

German GAAP Statement of Changes in Equity
for the period from December 20, 2006 to December 31, 2006

					Accumulated
	Subscribed		Additional paid in		losses brought		Net income for the
	Capital		capital		forward		period		Total
	€		€		€		€		€
Balance as of December 20, 2006		250.000,00		29.750.000,00		-6.259.611,88				23.740.388,12
Capital increases		230.000,00		41.307.768,05						41.537.768,05
Net income of the period								1.190.337,21		1.190.337,21
Balance as of December 31, 2006		480.000,00		71.057.768,05		-6.259.611,88		1.190.337,21		66.468.493,38

1

EVERQ GmbH, Thalheim

German GAAP Fixed Assets Movement Schedule
for the period from December 20, 2006 to December 31, 2006

	Historical Cost								Accumulated depreciation								Carrying value
	Balance as of the								Balance as of the										Balance as of the
	beginning of the						Balance as of the		beginning of the						Balance as of the		Balance as of the		beginning of the
	period						end of the period		period						end of the period		end of the period		period
	December 20,				Disposals/		December 31,		December 20,		Depreciation of		Disposals/		December 31,		December 31,		December 20,
	2006		Additions		Retirements		2006		2006		the period		Retirements		2006		2006		2006
	€		€		€		€		€		€		€		€		€		€
I. Intangible assets 1. Software		321.201,61		0,00		0,00		321.201,61		32.841,07		2.978,14		0,00		35.819,21		285.382,40		288.360,54
2. Prepayments		362.899,57		0,00		0,00		362.899,57		0,00		0,00		0,00		0,00		362.899,57		362.899,57
		684.101,18		0,00		0,00		684.101,18		32.841,07		2.978,14		0,00		35,819,21		648.281,97		651.260,11
II. Property, plant and equipment
1. Land		2.072.433,08		0,00		0,00		2.072.433,08		0,00		0,00		0,00		0,00		2.072.433,08		2.072.433,08
2. Buildings		13.398.677,06		0,00		0,00		13.398.677,06		257.111,74		13.568,61		0,00		270.680,35		13.127.996,71		13.141.565,32
3. Technical Equipment and Machinery		47.657.666,25		0,00		0,00		47.657.666,25		3.428.388,39		198.583,35		0,00		3.626.971,74		44.030.694,51		44.229.277,86
4. Other plant, factory and office equipment		1.682.302,45		6.841,58		-6.841,58		1.682.302,45		252.691,00		16.634,25		-6.841,58		262.483,67		1.419.818,78		1.429.611,45
5. Assets under construction and prepayments		38.314.313,81		4.540.236,08		0,00		42.854.549,89		0,00		0,00		0,00		0,00		42.854.549,89		38.314.313,81
		103.125.392,65		4.547.077,66		-6.841,58		107.665.628,73		3.938.191,13		228.786,21		-6.841,58		4.160,135,76		103.505.492,97		99.187.201,52
		103.809.493,83		4.547.077,66		-6.841,58		108.349.729,91		3.971.032,20		231.764,35		-6.841,58		4.195.954,97		104.153.774,94		99.838.461,63

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