MASSACHUSETTS DEVELOPMENT FINANCE AGENCY PROJECT GRANT AGREEMENT

Exhibit 10.37

EXECUTION

MASSACHUSETTS DEVELOPMENT FINANCE AGENCY

PROJECT GRANT AGREEMENT

     This Project Grant Agreement (the “ Agreement ”) dated as of November 20, 2007, is entered into between the Massachusetts Development Finance Agency (“ MDFA ”), a Massachusetts body politic and corporate and a public instrumentality of The Commonwealth of Massachusetts (the “ Commonwealth ”) established under Chapter 23G of the Massachusetts General Laws as amended (the “ Act ”) , having its principal office and place of business at 160 Federal Street, Boston, Massachusetts 02110, and Evergreen Solar, Inc., a Delaware corporation, with a principal place of business at 138 Bartlett Street, Marlborough, Massachusetts 01752 (“ Grantee ”) (MDFA and Grantee are together referred to as the “ Parties ”).

      Whereas, MDFA is offering financial assistance to Grantee in the form of the Grant (as hereinafter defined) to help defray the costs incurred by Grantee in the design and construction of a facility to be located on certain Land (the “ Premises ”) owned by MassDevelopment to be leased to Grantee, for the design, manufacture and assembly of products for renewable energy technologies and all related functions, including research and development and warehousing and administration (the “ Project ”, which term shall exclude the cost of any equipment or fixtures specific to the manufacturing or other activities of Grantee to be conducted by Grantee on the Land);

      Whereas , MDFA’s provision of such grant funds for use on the Project is consistent with the statutory goals set forth in the Act and is expected to lead to substantial economic development activity in the Commonwealth, including without limitation the retention and creation of employment, as more fully set forth in this Agreement;

      Whereas, MDFA’s Board of Directors approved the commitment of funds to Grantee for the Project on August 22, 2007; and

      Now therefore, pursuant to the terms and conditions of the Agreement, MDFA and Grantee agree as follows:

1.

Term and Termination

	a)		The term of this Agreement shall commence on the date that this Agreement is fully executed by the Parties (the “ Effective Date ”), and, unless terminated earlier pursuant to the terms of Section 1(b) and Section 6 ( Events of Default ), shall expire sixty (60) days after the eighth (8 th ) anniversary of the Effective Date.
	b)		MDFA’s obligation to disburse Grant proceeds, however, shall expire in any event on the earlier to occur of (i) the six (6) month anniversary of the date that Grantee has substantially completed the Initial Improvements (as such term is defined in a certain Ground Lease dated on or about the date hereof between MDFA and the Grantee with respect to the Premises and the Project, a copy of which is attached hereto as Exhibit A (the “ Ground Lease ”)), or (ii) the last day of the twenty-fourth (24 th ) month after the Effective Date.
	c)		This Agreement may be terminated by either MDFA or Grantee if (i) an Event of Default occurs (including the expiration of any applicable cure period) and remains outstanding as of the date of termination and the party seeking to terminate this Agreement hereunder is the Non-Defaulting Party, and (ii) the Non-Defaulting Party has not waived such Event of Default in writing.
	d)		The obligations of MDFA to fund any portion of the proceeds under this Grant shall automatically terminate in the event that the Ground Lease is terminated for any reason,

Project Grant Agreement: Evergreen Solar, Inc.

unless termination occurred because the Grantee purchased the Premises pursuant to its option to purchase contained in the Ground Lease.

2.		The Grant; Conditions Precedent to MDFA’s Obligation to Make Grant
		Subject to the provisions of this Agreement, including without limitation the provisions of Section 5 (Payments), Section 8 (Grantee’s Commitments) and Section 9 (Repayment), MDFA shall pay to Grantee a maximum amount of Ten Million Dollars ($10,000,000) (the “ Grant ”). MDFA shall have no obligation to pay Grantee any amount in excess of the Grant notwithstanding any construction on the Land by Grantee of more than the Project.
		Notwithstanding the foregoing, MDFA shall have no obligation to disburse any of the proceeds of the Grant until such time as it has received (a) Grant funds in the amount of $11,000,000 from the MORE Jobs Program and the Community Development Action Grant through the Executive Office of Housing and Economic Development and (b) Grant funds in the amount of $2,000,000 from the Public Works Economic Development Program through the Executive Office of Environmental Affairs.
3.		Use of Proceeds
		Grantee hereby covenants and agrees that all Grant funds provided by MDFA pursuant to this Agreement shall be used solely to defray the direct hard and soft costs incurred by Grantee in connection with the due diligence, permitting, design and construction of the Project (hereinafter “ Project Costs ”), and for no other purpose. In no event, however, shall Project Costs include the cost of any equipment or fixtures specific to the manufacturing or other activities of the Grantee to be conducted by Grantee on the Land.
4.		Reporting
		Grantee shall, on a quarterly basis prior to Substantial Completion (as defined in the Ground Lease) and thereafter on an annual basis, provide MDFA with a project status report (the “ Progress Reports ”), which shall include without limitation (a) a description of completed Project construction milestones, during the period of construction, (b) the stage of the progress of construction of the Project, during the period of construction, and (c) the status of Grantee’s meeting and maintaining the (i) Retained Positions and (ii) new Jobs commitments, as defined and more fully set forth in Section 8; provided that nothing herein shall be deemed to require Grantee to disclose information that is of a proprietary nature. Grantee’s compliance with Grantee’s Commitments (as defined in Section 8) may be subject to continuous assessment by MDFA. In furtherance of the foregoing, Grantee shall provide MDFA with annual reports (the “ Annual Reports ”), which shall include information setting forth Grantee’s compliance with, and/or variances from, the Grantee’s Commitments. The first Annual Report shall be submitted to MDFA within thirty (30) days of the first anniversary of the Effective Date and each subsequent Annual Report shall be submitted within thirty (30) days of each subsequent anniversary of the Effective Date. In the case of the Grantee’s Commitments set forth in Sections 8(a)-(e), the Annual Report shall include a certification from Grantee’s CEO or CFO concerning Grantee’s compliance with, and/or variances from, the Grantee’s Commitments. Additionally, Grantee shall provide MDFA with such other information, reports, documents and certifications as MDFA may, from time to time, request with respect to the Project and the subject matter of this Agreement within twenty (20) days after such request.
5.		Invoices/Payment Schedule

a)

Cost Reimbursement. Grantee shall receive advances of Grant funds on a percentage of completion basis for Project Costs actually incurred for the design and general construction of the Project (collectively the “ Total Project Construction Funds ”) and upon

Project Grant Agreement: Evergreen Solar, Inc.

			the completion of the Project, any Grant funds not yet advanced shall be provided to Grantee subject to the provisions of Sections 1(b) and (c) hereof. The Parties acknowledge that the total amount of MDFA’s funding for the Project’s general construction is Ten Million Dollars ($10,000,000), comprised of the Grant. The Parties acknowledge that the estimated Project Costs for the Initial Improvements and anticipated sources of the Total Project Construction Funds for the Initial Improvements have been provided to MDFA.
	b)		Invoices . Grantee may submit invoices for payment using the template provided by MDFA. The invoice shall set forth total Project Costs incurred and paid as of the date of the invoice, the balance of the funds required to complete the Project, and evidence of payment thereof. Grantee shall provide such additional supporting documentation of Project Costs actually incurred as MDFA may request.
	c)		Payment Terms. MDFA shall pay disburse Grant funds to Grantee within thirty (30) days after receipt of a properly documented invoice, unless MDFA properly determines that any such payment or any part thereof is otherwise not properly payable pursuant to the terms of this Agreement.

6.		Events of Default
		For the purposes of this Agreement, a “Defaulting Party” shall mean any party hereto against which the other party hereto is entitled to assert an Event of Default under this Section 6 and a “Non-Defaulting Party” shall mean with respect to the occurrence of any Event of Default (as defined below), the party to this Agreement that is not the Defaulting Party in connection with such Event of Default. For purposes of this Agreement “Event of Default” shall mean any of the following:

	a)		Failure by the Defaulting Party to make, when due, any payment or repayment required under this Agreement if such failure is not remedied within thirty (30) calendar days after written notice of such failure is given by the other party and provided the payment or repayment is not the subject of a continuing good faith dispute;
	b)		Material breach of any of the Defaulting Party’s obligations contained in this Agreement, including without limitation the obligations set forth in Section 8(a) or (e), which breaches are not excused by Force Majeure (as defined in Section 16) or cured as provided in the relevant provisions of this Agreement;
	c)		Any circumstance: (i) in which the Defaulting Party makes a general assignment for the benefit of creditors (as a symptom of impending bankruptcy), (ii) in which the Defaulting Party files a petition or otherwise commences, authorizes or consents to the commencement of a proceeding or cause of action under any bankruptcy or similar law for the protection of creditors, or where such a petition is filed against Defaulting Party and is not stayed, withdrawn or dismissed within sixty (60) days after such filing, (iii) in which a court of competent jurisdiction shall determine that Defaulting Party is generally not paying its debts as such debts become due, or (iv) which results in the Defaulting Party’s insolvency or its admission that it is unable to pay its debts generally as they become due;
	d)		Termination of the Ground Lease as a result of an uncured default by Grantee shall be an Event of Default hereunder; and
	e)		A sale or other transaction in the nature thereof of the Premises by Grantee after Grantee’s purchase of the Premises from MDFA and as a result thereof Grantee is no longer operating the Project on the Premises.

Project Grant Agreement: Evergreen Solar, Inc.

f)

In addition to any other remedy available to it under this Agreement or under applicable law, upon any occurrence of an Event of Default, the Non-Defaulting Party shall be entitled to suspend performance of its obligations under this Agreement until the earlier of such time as (a) such Event of Default has been cured, or (b) the Non-Defaulting Party has elected to terminate this Agreement pursuant to Section 1(c). The Non-Defaulting Party may, in addition to such suspension and/or termination, initiate proceedings for an assessment of damages payable to the Non-Defaulting Party resulting from such Event of Default and/or seek any other remedies available to the Non-Defaulting Party either at law or in equity; provided that MDFA’s remedies (in addition to such suspension and/or termination) upon an Event of Default by Grantee shall be limited to the right to enforce the repayment and forfeiture provisions as specified in Section 9 below. Neither the preceding sentence nor any other provision of this Agreement shall restrict or otherwise limit MDFA’s rights under any other agreements entered into with Grantee, including without limitation, the Ground Lease.

7.		Assignment
		Grantee’s rights and restrictions on the assignment or any form of transfer of any of Grantee’s interest in the Grant or this Agreement (including without limitation by merger, sale of assets or corporate reorganization) shall be governed by the same terms and conditions permitting and/or restricting assignments of Grantee’s leasehold interest as set forth in Article 10 of the Ground Lease.
8.		Grantee’s Commitments
		Grantee acknowledges that the Grant is conditioned on Grantee’s meeting and maintaining the following commitments (collectively the “ Grantee’s Commitments ”), and Grantee therefore agrees and covenants that it shall:

	a)		Maintain a general manufacturing, research and development business for renewable energy technologies at the Premises for a period of five (5) years, commencing on Substantial Completion of the Project as defined in the Ground Lease subject to the provisions of Article 2, Section 2.2(d) of the Ground Lease.
	b)		(i) create and maintain (a) 350 new Jobs (as hereinafter defined) as a resul