Evergreen Solar Docs

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Project Apollo - 65MW Plant20-Mar-07

OregonassachusettsCAPEX

Likely ScenarioMexicaliew Mexico New York*

Equipment $87.0 $87.0 $87.0 $87.0 .87 0Facilities $35.0 $35.0 $30.0 $35.0 $17.5Building $15.0 $15.0 $7.0 $15,0 $0.0Land $2.0 $0.0 $1.0 . $2.5 $0.0A&E / CoordinationFees $13.0 $10.0 $13.0 $10.5 $8 0Total CAPEX (65MW) $152.0 $147.0 $138.0 $150.0 $112.5Total CAPEX ($1W) $2.34 $2.26 $2.12 $2.31 $1.73Support

Grant (Gov.) $14.0 $23.6 $16.0 $23.0 $20.0Loan (Gov.) $0.0 $17.5 $25.0 $0.0 $32.0Developer Finance (Pry.) $19.0 $0.0 $15.0 $46.0 $20.0Total Support $33.0 $41.1 $56.0 $69.0 $72.0Net CAPEX with Grants ($1W) $2.12 $1.90 $1.88 $1.95 $1.42Dilution (in million shares)ESLR 1st Year Build Cost $119.0 $105.9 $82.0 $81.0 $40.5Shares qii2 $10 11.9 10.6 8.2 8.1 4.1

Loan Repayment $15 1.3 1.2 2.7 3 1 3.5Total Dilution (in M) 13.2 11.8 10.9 11.2 7,5OPEX

Electric ($3.0) ($6.3) ($7.2) ($3.8) ($5.8)Labor ($12.8) ($13.6) ($4.1) ($10.7) ($122)Rent ($1.8) $0.0 ($1.5) ($4.5) ($2.0)Interest (Gov) $0.0 ($0.7) ($2.1) $0.0 ($1.6)Coordination Costs ($1.0) $0.0 ($2.0) ($1.0) ($1.0)Federal Tax Savings I Tax Credit $0.0 $0.0 $4.5 $1.2 $0.0Prop Tax ($0.9) ($0.8) ($0.6) ($0.5) $0.0

Total Annual OPEX (65MW) ($19.5) ($21.4) ($12.9) ($19.3) ($22.5)Net Operating (7yr discounted) (t.94.8) ($104.4) ($62.8) ($94.1) ($109.7)Total State Specific Expenditure ($213.8) ($210.3) ($144.8) ($175.1) ($150.2)* New York offer only valid for tenancy at IBM Fishkill location on long term lease.


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Evergreen SolarBackgrounder April 10, 2007The CompanyEvergreen Solar, Inc., founded in 1994, develops, manufactures and markets solar photovoltaic(PV) powe r products primarily PV wafers, cells, and modules for residential and com mercialuse. Between 2004 and 2005, company revenues increased 87%, to $44 million. The companycurrently employs 310 workers at its headquarters and pilot manufacturing facilities inMarlborough.The com pany em ploys a "string ribbon" technology, allowing it to use less silicon moreefficiently to manufacture PV cells.The Expansion OpportunityThe company plans to invest $150,000,000, for a 225,000 s.f. manufacturing facilitysupporting 350 new manufacturing jobs.The Massachusetts Office of Business Development (MOBD) has aggressively encouraged thecompany to locate in Massachusetts. MOBD assembled a competitive incentives proposal(summary is attached) including grants, infrastructure funding, tax exemptions, and financing toconvince the company to expand here. The company informed MOBD that the tax and financingaspects of the proposal are competitive with other states, and that that only Oregon significantlyexceeds the state's grant offerings.MOBD proposed locating the facility on state owned land adjacent to the MassachusettsTechnology Collaborative facility in Westborough. In this approach, the company will enter intoa long-term lease with MTC, who will own the land and function as the landlord. This option ishighly desirable to the company for many reasons, including:Benefits of the MTC-adjacent site to the company Greater utility of state infrastructure grants to the project. The site allows for use ofMORE Jobs program funds (and possibly other grants) to address infrastructure needs on the

parcel, which would otherwise (on a private parcel) not be eligible. We expect the companyto apply and be competitive in this process.

Proximity. The company values the close proximity of the Westborough site to theirMarlborough headquarters. The new site will be just 10 minutes away from the company'stop decision-makers and pilot manufacturing engineers. The location also provides closeproximity to the Massachusetts Technology Collaborative (MTC), whose Renewable EnergyTrust (RET) leads efforts to promote renewable energy adoption in our state.

Benefits of the MTC-adjacent site to Westborough Significant potential tax benefits for Westborough. The estimated incremental value ofthis new facility will generate approximately $546,000 in new property tax revenues per

year.

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Evergreen SolarBackgrounder April 10, 2007

MO BD thinking "outside the box" to solve a problem Special legislation is needed to convey 5% Investment Tax Credit (ITC) benefits to theproject. Westborough is not an Economic Target Area (ETA) municipality. As such, it

cannot grant tax increment financing (TIF) to a job-creating project, as part of the EconomicDevelopment Incentive Program (EDIP). Also, without the TIF, the project is not eligible forthe 5% ITC. The 5% ITC is very important to Evergreen Solar, as it is more valuable thanthe standard 3% ITC offered to manufacturers not participating in the EDIP. Also, the 5%ITC provides generous carry-forward provisions that the company could exercise in futureyears. Through special legislation, the state can provide the 5% ITC and its carry-forwardprovisions to companies meeting specific criteria.Status EOHED will draft special legislation language that will make the 5% ITC availableto Evergreen Solar in Westborough.

Breakout of which funds are specifically for Evergreen/which are "standard"* The incentive package that was offered to Evergreen is robust andcreative. The MOBD team used the programs at their disposal and whenthat was exhausted they tapped into their relationships with privateindustry to make the package even more compelling. The is a greatexample of how I would like to see the government and private industryworking toward common goals that benefit the Commonwealth ofMassachusetts in it's entirety.* As we talk about the proposal I would like make special note that themajority of the programs in the proposal are available for all companiesto access. We did create special one time incentives for Evergreen andthis was to acknowledge their commitment to the Commonwealth. Of the$87M proposal $70 + M is from other programs for other companies toaccess.

EVERGREENSpecial financing/savings vs public programsSpecial financing/savings specific to EvergreenMassachusetts TechnologyCollaborative Special GrantLand Cost Savings5% Investment Tax Credit

$10,000,000$ 3,000,000$ 5,000,000

Narrower Public Programs included in the Evergreen package Massachusetts

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Technology Collaborative LORI Grant $ 5,000,000MORE Jobs Infrastructure Grant10,000,000Financing - Principal MDFA5,000,000Financing - Principal MTC5,000,000Financing - Estimated Interest Savings2,593,080Broader Public programs included in the Evergreen packageReal Estate Tax Savings12,188,402Workforce Training Fund Grant1,000,000HIT Grant0,000CDAG Infrastructure Grant1,000,000PWED Infrastructure Grant1,000,000100% Personal Property Tax Exemption10,770,910Sales and Use Tax Exemptions10,000,000Financing - Citizens7,500,000R&D Tax CreditSingle Sales Factor


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I. Summary - MA Estimated Incentives, Savings, and Financing ProposalMassachusetts Technology Collaborative Special Grant $0,000,000Massachusetts Technology Collaborative LORI Grant $00,000MORE Jobs Infrastructure Grant $0,000,000CDAG Infrastructure Grant $,000,000PWED Infrastructure Grant $,000,000Land Cost Savings 5,000,000Real Estate Tax Savings (vs. Preliminary Proposal) $2,188,402Workforce Training Fund Grant $,000,000HIT Grant $0,000Real Estate Tax Exemption Savings "TIF" (EDIP) ** $34,099100% Personal Property Tax Exemption (EDIP) * $0,770,9105% Investment Tax Credit (EDIP) $,500,000Sales and Use Tax Exemptions $0,000,000Single Sales Tax Factor estimated savings TBDResearch & Development Tax Credit (10-15%) TBDFinancing Principal (MDF A, MTC, and Citizens) $7,500,000Financing Estimated Interest S avings** $,593,080Total Estimated Value of Proposal **** $7,816,491* Personal Property Tax exemption savings over 20-year project period (see Exhibit 2)** Assumes a negotiated TIF that gives an average 5% exemption for 20 years per the attached schedule (Exhibit 1).The actual exemption percentage and project period will be negotiated between Westborough and Evergreen Solar .This number is for illustrative purposes only and does not represent a proposal from any specific municipality. Weassumed the incremental value of the building to be $80,000,000 and the real estate tax rate to be $13.66/$1,000 AV.*** MDFA & RET savings vs. 8.25% rate, Citizens savings vs. 7.99% rate**** Includes grants, tax credits, offsets, identified savings, loan principal and interest savings

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The CompanyEvergreen Solar, Inc., founded in 1994, develops, manufactures and markets solar photovoltaic(PV) pow er products primarily PV wafers, cells, and mod ules for residential and comm ercialuse. Between 2004 and 2005, company revenues increased 87%, to $44 million. The companycurrently employs 310 workers at its headquarters, and pilot manufacturing facilities inMarlborough.The com pany em ploys a "string ribbon" technology, allowing it to use less silicon m oreefficiently to manufacture PV cells.The Expansion OpportunityThe company plans to invest $150,000,000, for a 225,000 s.f. manufacturing facilitysupporting 350 new manufacturing jobs.The Massachusetts Office of Business Development (MOBD) has aggressively encouraged thecompany to locate in Massachusetts. MOBD assembled a competitive incentives proposal(summary is attached) including grants, infrastructure funding, tax exemptions, and financing toconvince the company to expand here. The company informed MOBD that the tax and financingaspects of the proposal are competitive with other states, and that that only Oregon significantlyexceeds the state's grant offerings.MOBD proposed locating the facility on state owned land adjacent to the MassachusettsTechnology Collaborative facility in Westborough. In this approach, the company will enter intoa long-term lease with MTC, who will own the land and function as the landlord. This option ishighly desirable to the company for many reasons, including:Benefits of the MTC-adjacent site to the company Greater utility of state infrastructure grants to the project. The site allows for use of

MORE Jobs program funds (and possibly other grants) to address infrastructure needs on theparcel, which would otherwise (on a private parcel) not be eligible. We expect the companyto apply and be competitive in this process.

Proximity. The company values the close proximity of the Westborough site to theirMarlborough headquarters. The new site will be just 10 minutes away from the company'stop decision-makers and pilot manufacturing engineers. The location also provides closeproximity to the Massachusetts Technology Collaborative (MTC), whose Renewable EnergyTrust (RET) leads efforts to promote renewable energy adoption in our state.

Benefits of the MTC-adjacent site to Westborough Significant potential tax benefits for Westborough. The estimated incremental value ofthis new facility will generate approximately $546,000 in new property tax revenues per

year.

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MOB D thinking "outside the box" to solve a problem Special legislation is needed to convey 5% Investment Tax Credit (ITC) benefits to the

project. Westborough is not an Economic Target Area (ETA) municipality. As such, itcannot grant tax increment financing (TIF) to a job-creating project, as part of the EconomicDevelopment Incentive Program (EDIP). Also, without the TIF, the project is not eligible forthe 5% ITC. The 5% ITC is very important to Evergreen Solar, as it is more valuable thanthe standard 3% ITC offered to manufacturers not participating in the EDIP. Also, the 5%ITC provides generous carry-forward provisions that the company could exercise in futureyears. Through special legislation, the state can provide the 5% ITC and its carry-forwardprovisions to companies meeting specific criteria.Status EOHED will draft special legislation language that will make the 5% ITC availableto Evergreen Solar in Westborough.

Breakout of which funds are specifically for Evergreen/which are "standard" The incentive package that was offered to Evergreen is robust and creative. The

MOBD team used the programs at their disposal and when that was exhausted theytapped into their relationships with private industry to make the package even morecompelling. The is a great example of how I would like to see the government andprivate industry working toward common goals that benefit the Commonwealth ofMassachusetts in it's entirety.

As we talk about the proposal I would like make special note that the majority of theprograms in the proposal are available for all companies to access. We did createspecial one time incentives for Evergreen and this was to acknowledge theircommitment to the Commonwealth. Of the $87M proposal $70 + M is from otherprograms for other companies to access.

EVERGREENSpecial financing/savings vs public programsSpecial financing/savings specific to EvergreenMassachusetts TechnologyCollaborative Special Grant10,000,000Land Cost Savings3,000,0005% Investment Tax Credit5,000,000Narrower Public Programs included in the Evergreen package Massachusetts

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Technology Collaborative LORI Grant $ 5,000,000MORE Jobs Infrastructure Grant $10,000,000Financing - Principal MDFA $ 5,000,000Financing - Principal MTC $ 5,000,000Financing - Estimated Interest Savings $ 2,593,080

Broader Public programs included in the Evergreen packageReal Estate Tax Savings $12,188,402Workforce Training Fund Grant $ 1,000,000HIT Grant $0,000CDAG Infrastructure Grant $ 1,000,000PWED Infrastructure Grant $ 1,000,000100% Personal Property Tax Exemption $10,770,910Sales and Use Tax Exemptions $10,000,000Financing - Citizens $ 7,500,000R&D T ax CreditSingle Sales Factor


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I. Summary - MA Estimated Incentives, Savings, and Financing ProposalMassachusetts Technology Collaborative Special Grant $0,000,000Massachusetts Technology Collaborative LORI Grant $00,000MORE Jobs Infrastructure Grant S0,000,000CDAG Infrastructure Grant 1,000,000PWED Infrastructure Grant $,000,000Land Cost Savings S,000,000Real Estate Tax Savings (vs. Preliminary Proposal) S2,188,402Workforce Training Fund Grant S,000,000HIT Grant 30,000Real Estate Tax Exemption Savings "TIF" (EDIP) ** S34,099100% Personal Property Tax Exemption (EDIP) * $0,770,9105% Investment Tax Credit (EDIP) $,500,000Sales and Use Tax Exemptions $0,000,000S ingle Sales Tax Factor estimated savings TBDResearch & Development Tax Credit (10-15%) TBDFinancing Principal (MDFA, MTC, and Citizens) $7,500,000Financing Estimated Interest Savings** $,593,080Total Estimated Value of Proposal*** $7,816,491* Personal Property Tax exemption savings over 20-year project period (see Exhibit 2)** Assumes a negotiated TIF that gives an average 5% exemption for 20 years per the attached schedule (Exhibit 1).The actual exemption percentage and project period will be negotiated between Westborough and Evergreen Solar .This number is for illustrative purposes only and does not represent a proposal from any specific municipality. Weassumed the incremental value of the building to be $80,000,000 and the real estate tax rate to be $13.66/$1,000 AV.*** MDFA & RET savings vs. 8.25% rate, Citizens savings vs. 7.99% rate* * * * Includes grants, tax credits, offsets, identified savings, loan principal and interest savings

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COMMONWEALTH OF MASSACHUSETTSDEPARTMENT OF BUSINESS AND TECHNOLOGYMASSACHUSETTS OFFICE OF BUSINESS DEVELOPMENTInternet: http :fiwww.mass.e.ov/econ

DEVAL PATRICKGOVERNOR

TIMOTHY MURRAYLIEUTENANT GOVERNOR

April 10, 20071 am pleased to provide you with. the Commonwealth's Preliminary Incentives, Financing, andSavings Proposal to Evergreen Solar valued at up to $87,816,491 to effect the location of its newmanufacturing facility at the MTC site in Westborough, Massachusetts. The proposal includesgrants, tax exemptions, tax credits, cost offsets, financing, and identified savings. Assumptionsused to calculate the savings and incentives are detailed in each section.The incentives and savings provided herein are predicated on information provided to us byEvergreen Solar regarding project investment, employment, environmental impact, and timingparameters, and are subject to change should revisions be made to these criteria. For purposes ofthis proposal, we have calculated our economic development incentives, financing, and savingsbased upon the following assumptions:

Capitalobsobsates ofinvestmentreatedetainedonstructionTotal Project150,000,0005010007-2008Attached, you will find: 1) a summary proposal, 2) a description of each of the programs and themethod/assumptions used to calculate the savings, and 3) additional data regarding theMassachusetts advantages. We are confident that our highly skilled workforce, world leadingeducational system, innovative economy, leading technology industry cluster, strong state andlocal government support, a vigorous commitment by Governor Patrick to grow the renewableenergy sector, and a strong incentives package will provide Evergreen Solar with the idealenvironment in which to thrive.Please call Mr. Art Robert if you have any questions regarding the proposal. The Commonwealthof Massachusetts is enthusiastically committed to working with. Evergreen Solar to assist you in asuccessful startup of your new manufacturing facility in Massachusetts.

Sincerely,

Robert Coughlinrthur P. RobertUndersecretary for Business Developmentndustry Director, Renewable Energy(617) 788-368el. (617) 788-36561


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I. Summary - MA Estimated Incentives, Savings, and Financing ProposalMassachusetts Technology Collaborative Special Grant $0,000,000Massachusetts Technology Collaborative LORI Grant $00,000MORE Jobs Infrastructure Grant $0,000,000CDAG Infrastructure Grant $,000,000PWED Infrastructure Grant $,000,000Land Cost Savings $,000,000Real Estate Tax Savings (vs. Preliminary Proposal) $2,188,402Workforce Training Fund Grant $,000,000HIT Grant $0,000Real Estate Tax Exemption Savings "TIF" (EDIP) ** $34,099100% Personal Property Tax Exemption (EDIP) * $0,770,9105% Investment Tax Credit (EDIP) $,500,000Sales and Use Tax Exemptions $0,000,000Single Sales Tax Factor estimated savings TB DResearch & Development Tax Credit (10-15%) TB DFinancing Principal (MDFA, MTC, and Citizens) $7,500,000Financing Estimated Interest Savings *** $,593,080Total Estimated Value of Proposal** * $7,816,491

* Personal Property Tax exemption savings over 20-year project period (see Exhibit 2)** Assumes a negotiated Ilk that gives an average 5% exemption for 20 years per the attached schedule (Exhibit I).The actual exemption percentage and project period will be negotiated between Westborough and Evergreen Solar .This number is for illustrative purposes only and does not represent a proposal from any specific municipality. Weassumed the incremental value of the building to be $80,000,000 and the real estate tax rate to be $13.66/$1,000 AV.*** MDFA & RET savings vs. 8.25% rate, Citizens savings vs. 7.99% rate**** includes grants, tax credits, offsets, identified savings, loan principal and interest savings

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COMMONW EALTH OF MASSACHUSETTSDEPARTMENT OF BUSINESS AND TECHNO LOGYMASSACHUSETTS OFFICE OF. BUSINESS DEVELO PMENTONE ASHBURTON PLACE SUITE 2101BOSTON, MA 02108

TELEPHONE: 617-788-3670FAX: 61 7-788-3695Internet: httn://www.rnass.gov/mobd

DEVAL PATRICKGOVERNOR

TIMOTHY MURRAYLIEUTENANT GOVERNOR Commonwealth of Massachusetts

Incentives, Savings, and Financing Proposal

DANIEL OCONNELLSECRETARY OF HOUSING ANDECONOMIC DEVELOPMENT

ROBERT COUGHLINUNDERSECRETARY OF BUSINESSDEVELOPMENT

Prepared exclusively forEvergreen Solar

April 9, 2007

This proposal outlines the general terms of the incentives, savings, and financing package beingoffered by Massachusetts to Evergreen Solar to assist with the location construction of a newmanufacturing facility in Westborough, Massachusetts. This offer is subject to the successfulcompletion of applications as noted and compliance with program requirements. The incentivesrelated to the Economic Development Incentive Program are subject to negotiation with andapproval by the town of Westborough. In order to be eligible for the Economic DevelopmentIncentive Program, Evergreen Solar must locate the facility in an ETA designated municipality.Approval of grants from the Workforce Training Fund are subject to completion and submissionof a complete application by the company and approval by the WTF Advisory Board.

II. General Informationa) Contact Information:r. Richard ChleboslciVP Worldwide ExpansionsEvergreen Solarb) Proposed Project Location:TC Site in Westborough, Massachusettsc) Type of Business:anufacturing of PV wafers, cells, and panels3


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HI. Project OverviewDescriptionTo support the growth in its business, Evergreen Solar plans to build a new 225,000 s.f.manufacturing facility. Evergreen Solar plans to invest $150,000,000 for real estate, buildingconstruction, and equipment at the site. Phase one of the project will create 350 new jobs and$150 million in private investment. Evergreen envisions, but is not committed to, a second phaseat the site. That phase would create an additional 300 jobs and an additional private investment of$1 40,000,000 million.Company Employment PlanIn addition to retaining the 310 jobs currently located at their Marlborough facility, EvergreenSolar will add 350 new jobs at an average salary of $44,380.

IV. Job Creation and Investment IncentivesEconomic Development Incentive Program (EDIP)Through the EDIP, designated Economic Target Area (ETA) communities, in partnership with theCommonwealth, can provide 1) real estate property tax exemptions, 2) personal property taxexemptions, and 3) investment tax credits to businesses locating to or expanding in thecommunity. The EDIP is a three-way partnership between the state, the municipality and theparticipating job creating business.EDIP How it Works

The municipality makes available local Tax Increment Financing (TIF) - a negotiated realestate tax exemption based on a percentage of the value added through renovation or newconstruction. The duration of the 11E is for a period of no less than five years and no morethan twenty years. The terms of the TIF are negotiated between the property owner seekingthe benefits of the EDIP and the municipality. The state does not participate in thatnegotiation. In addition to the negotiated TIF real estate property tax exem ption, the businesswould autom atically receive a 1 00% personal property tax exemption on the site for the life ofthe project.

To qualify for the EDIP incentives a participating business must become a "CertifiedProject". As part of the Certified Project, the business must agree to create at least onepermanent full-time, net new Massachusetts job. As part of the Certified Project, thebusiness also agrees to a specific level of private investment and job retention whereapplicable. Upon municipal approval, and then the approval of the Economic AssistanceCoordinating Council (EACC), the state makes available a 5% investment tax credit knownas the 5% Economic Opportunity Area Credit.

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Westborough is not an ETA municipality. The availability of EDIP benefits to the project issubject to passage of special legislation. The Commonwealth can pursue special legislation tosecure EDIP program benefits, or it can pursue special legislation to secure only InvestmentTax Credit Benefits to support the project. See more on this option, in the "Investment. TaxCredit" section.

Illustrative Example of EDIP and Hypothetical SavingsReal Estate Property Tax Exemption SavingsThe terms of the TIF agreement are to be determined through negotiation between Westboroughand Evergreen Solar. For illustration purposes only (to demonstrate how the TIF works), we haveassumed the new building of 225,000s.f. will result in an incremental value of $40,000,000 Weassumed that this value will increase by 3% annually. We used Westborough's currentcommercial real estate tax rate of $13.66/$1,000 AV. Therefore, there will be an initialincremental annual real estate tax liability of $546,400. This liability will grow 3% annually. Ifwe assume that the negotiated TIF is for 20-years and provides an annual exemption of 5%, thenthe total savings from the real estate property tax exemption (TIF) over the 20-year life ofthe project will be $734,099 (see attached Exhibit 1 TIF Spreadsheet). Please note that thisillustration is not a proposal from any municipality and that the actual terms of a TIF, including thelength of the TIF period, must be negotiated between Evergreen Solar and the town ofWestborough. Westborough is not currently an ETA municipality and would have to become oneby approving the ETA designation and receiving approval from the EACC before offering a TIF.Personal Property Tax SavingsAs a Certified Project with a TIF agreement, Evergreen Solar will automatically qualify fora 100% exemption on personal property taxes over the 20 year life of the project at this site.Beyond the 20-year project period, as a manufacturing corporation in Massachusetts,Evergreen Solar will qualify for a 100% exemption on personal property taxes on allmanufacturing equipment. Based on the numbers provided by Evergreen Solar, there will be$87,0000,000 in tangible depreciable assets (equipment) at the new facility. We assumed thatthese would be depreciated on a straight-line basis over 10 years. We then assumed that anadditional $2 million of equipment would be purchased annually and also depreciated over a tenyear period. We assumed the personal property tax rate to be $15.00/$1,000 in value. Over the20-year life of theproject, the total Personal Property Tax exemption savings is estimated tobe $10,770,910 (see attached Exhibit 2 Personal Property Tax Exemption Spreadsheet).Commonwealth of MassachusettsInvestment Tax CreditSuccessful completion of the EDIP process, as outlined above, will facilitate the extension of anEOA Investment Tax Credit (EOA-ITC) of 5% to Evergreen Solar as a "Certified Project". TheEOA-ITC can be utilized by the certified project business during the entire term of the TIFagreement between the property owner and the municipality (in this example 20 years).

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Based on the $150,000,000 investment in real estate, equipment, and facilities provided to us byEvergreen Solar and assuming all of these qualify for the investment tax credit, the total 5%Investment Tax Credit will be $7,500,000. This amount can be applied directly against anyMassachusetts tax obligation (though use of the EOA-ITC cannot in any single year reduceMassachusetts tax liability by greater than 50%). Unused credits may be carried forward tosubsequent years over the 20-year life of the project (through. 2026). Our assumption is thatEvergreen Solar will be in a position to fully utilize the available credits during the 20-year projectlife.The Commonwealth can pursue the provision of 5% ITC benefits to support this projectthrough special legislation. Through this option, other EDIP program benefits would not beavailable to the project. The availability of 5% ITC benefits to the project is subject to passage ofspecial legislation.

V. Renewable Energy Trust (MTC) GrantsMassachusetts Technology Collaborative Special GrantThe Massachusetts Technology Collaborative (MTC) through its Renewable Energy Trust(RET) will provide a $10,000,000 grant to be used to offset the costs of construction andequipment for Evergreen Solar's new manufacturing facility. In return, Evergreen Solar mustcommit to creating 350 new incremental full-time jobs at the new Massachusetts' facility (aboveand beyond the 310 jobs currently employed in Massachusetts) over a 24 month period fromcompletion of construction and Evergreen Solar must commit to an investment of $150 million inthe new facility for real estate, construction, and equipment. The new jobs created must besustained over a ten year period. The grant and its terms must be approved by the MTC Board.MTC LORI GrantThe Massachusetts Technology Collaborative (MTC), as administrator of the Renewable EnergyTrust Fund (the Trust), is seeking applications for the Large Onsite Renewables Initiative toexpand the . production and use of distributed renewable energy technologies inMassachusetts. MTC seeks to develop a diverse portfolio of renewable energy projects across avariety or locations, technologies, and building types. Round 3, has approximately $3.5 millionavailable. Applicants will be subject' to a competitive selection process. LORI applicants mayrequest funding in two activity areas: Feasibility Study Grants and Design & ConstructionGrants.During open solicitation rounds, LORI will accept grant applications for development of eligiblerenewable energy projects(s) with greater than 10 kilowatts of nameplate capacity that are locatedat commercial, industrial, institutional and public facilities that will consume more than 25% ofthe renewable energy generated by the project onsite. The applicant and project site(s) must be a.customer of a Massachusetts investor-owned. electric distribution utility. The grant awards may beused to facilitate the installation of renewable energy projects on existing buildings (retrofits) or inconjunction with new construction/major renovation projects, including green buildings. M TCleadership has recommended that a $500,000 grant be provided to the Evergreen Solarproject through the LORI program. The grant award must be approved by the MTC B oard.

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VI. Infrastructure GrantsMORE Jobs Capital ProgramThe MORE Jobs Capital Program was established in an economic stimulus bill that was passed bythe legislature and signed into law by Governor Romney on June 24, 2006 (Chapter 123 of theActs of 2006). The MORE Jobs Capital Program may be used to fund public infrastructurerequirements of business expansion and relocation projects that will enable a private investmentto occur resulting in the creation of at least 100 new jobs in Massachusetts over a 24 month period.Other program requirements are that the project must generate substantial sales from outside theCommonwealth and the company must maintain the newly created jobs for at least five years. Thegrant can be used for public infrastructure such as roadways, sewer, utilities, water, wastewater,etc. The grant must be applied for jointly by the company and the municipality. The applicationand grant award must be approved by the Secretary of Economic Development and Housing.Grant monies will be made available to the municipality as a reimbursement for the capital costs ofthe public infrastructure project.The Evergreen Solar project will create 350 new jobs, and MOBD will recommend a grantof up to $10,000,000 to pay for any eligible public infrastructure required by the project.Community Development Action Grant (CDAG)The Community Development Action Grant Program (CDAG), funded by the Commonwealth,provides support for publicly owned or managed projects in areas where private investment willnot otherwise occur without the CDAG grant. The goal is to stimulate economic developmentactivities that will attract and leverage private investment, create or retain long-term employmentand revitalize distressed areas. Any city or town in the Commonwealth is eligible to apply toDHCD for CDAG funds. The amount of CDAG funding requested by the community must be theminimum amount necessary to make the project feasible and any benefit to private entities orindividuals must be indirect and incidental and not the purpose of the project. CDAG can be usedin a variety of ways, including installation, improvement, construction, repair, rehabilitation orreconstruction of buildings or other structures, facades, streets, roadways, thoroughfares,sidewalks, rail spurs, utility distribution systems, water and sewer lines, for site preparation andimprovements, demolition of existing structures, and relocation assistance. A community maysubmit one individual application and/or one joint application for CDAG funding for the CDAGFY08 funding round. Individual CDAG awards are limited to a maximum of $1 million perproject. The Evergreen Solar project is eligible to receive a CDAG grant of up to $1,000,000for eligible public infrastructure costs.Public Works Economic Development Program (PWED) GrantThe PWED Program provides grants to municipalities for the design and construction of roads androadways and any other transportation related projects that support economic development.PWED grants are approved by the Executive Office of Transportation. Any city or town in theCommonwealth is eligible to apply to for PWED funds. There is a grant cap of $1,000,000 perproject per municipality. The Evergreen Solar project is eligible to receive a PWED grant ofup to $1,000,000 for eligible public roadway construction/upgrade costs.

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VII. FinancingA total financing package of $17,500,000 for the private investment in building andequipment will be supplied by three sources MassDevelopment, Renewable Energy Trust(MTC), and Citizens Bank. The Renewable Energy Trust will purchase a participation in asingle note offered by MassDevelopment, which will service the loan, including any staffing forwork out negotiations. Awards are contingent upon approval by the respective Boards ofMassDevelopment and Massachusetts Technology Collaborative and successful underwriting byCitizen's Bank.Mass Development Emerging Technology FundLoan Am ount:5,000,000, all available to support phase I. Limited to 25% of total projectcost. All advances on equipment limited to 85% of invoice cost, at time ofreceipt of equipment in the facility in which it will be installed.Interest rate:%Commitment Fee:%Term:years (first 18 months interest only) with the outstanding principal to beamortized over the remaining 66 monthsCollateral:Success Fee:

Other:

Approval:

First position lien on the assets financed (at 85% advance rates) and a juniorlien on all other business assets. This junior lien is (1) junior only to the $25million line of credit with Silicon Valley Bank that is due to be put in place,(2) pari passu with the $7.5 million loan by Citizens Bank of Massachusettsfor certain equipment not financed by the MassDevelopment/MTC loans,and (3) pari passu with junior lien of MTC.MassDevelopment and MTC will share in a warrant package, with numberof shares/warrants based on one year's worth of interest on the original loanamount, divided by the average price of the stock over the last 20 tradingday closing price preceding the financing. The average price whendetermined will be divided into the interest due during the first year todetermine how many shares of common stock the warrant package willprovide and produce the exercise price of the warrants. The average closingprice will be the warrant exercise price.Additional terms to be addressed through a separate term sheet, subject tonegotiation.Must receive formal approval by the MassDevelopment Board.

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Renewable Energy Trust (MTC)Loan Amount:5,000,000, all available to support phase 1. All advances on equipmentlimited to 85% of invoice cost, at time of receipt of equipment in thefacility in which it will be installed.Interest rate:%Commitment Fee:%Term:years (first 18 months interest only) with the outstanding principal to beamortized over the remaining 66 monthsCollateral:Success Fee:

First position lien on the assets financed (at 85% advance rates) and a juniorlien on all other business assets. This lien is (1) junior only to the $25million line of credit with Silicon Valley Bank that is due to be put in place,(2)pari passe with$7.5 million loan by Citizens Bank of Massachusetts forcertain equipment not financed by the MassDevelopment/MTC loans, and(3) pari passu with junior lien of MDFA.Same as MassDevelopment: MassDevelopment and MTC will share in awarrant package, with number of shares/warrants based on one year's worthof interest on the original loan amount, divided by the average price of thestock over the last 20 trading day closing price preceding the financing. Theaverage price when determined will be divided into the interest due duringthe first year to determine how many shares of common stock the warrantpackage will provide and produce the exercise price of the warrants. Theaverage closing price will be the warrant exercise price.

Other:dditional terms to be addressed through a separate term sheet, subject tonegotiation.

Approval:ust receive formal approval by the Massachusetts TechnologyCollaborative BoardCitizens Job Bank Program Economic Development LoanCitizens Bank offers the following terms, contingent on additional negotiations and underwritingterms, summarized below:Amount:7,500,000, 5 year fully amortizing term loan all available to support phase

1. (Provided Evergreen certifies that the amount is less than $40,000 pernew job created within 36 months of the completion of the project andprovided that the loan amount does not exceed 75% of assets financed)

Rates:.99% on first $5,000,000, and 5.99% on next $2,500,000 for a blendedrate of 5.32% 9


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Collateral:irst priority lien on specific assets financed and second priority lien on allbusiness assets behind Silicon Valley Bank, part passu withMassDevelopment and the Massachusetts Technology Collaborative.Other:dditional terms to be addressed separately with Citizens Bank, subject tonegotiation.Underwriting:pproval of this Economic Development Loan by Citizens is subject toCitizens' normal underwriting guidelines and loan approval requirementsand execution of documentation satisfactory to the bank and its legalcounsel.VIII. Corporate TaxesSingle Sales Factor Tax ApportionmentA potentially significant cost advantage in Massachusetts to manufacturers like Evergreen Solar isthe "single sales factor" tax apportionment. For manufacturing corporations with multi-state taxfilings, the single sales factor apportions state corporate income tax based solely on a ratio of in-state sales to total sales. Other states typically use more complicated apportionment formulas,which include not only the in-state sales ratio but also include the ratio of in-state payroll to totalpayroll and the ratio of in-state property to total property. The practical implication is that thesestates penalize companies that hold and add tangible assets and jobs in that state. For instance,California, New Jersey, and New Mexico all use multiple factor apportionment, which penalizesmanufacturers for owning property and paying wages in-state. As manufacturers like EvergreenSolar expand their facilities and create new jobs in these states, the effective tax rate and theresultant tax burden for the company will likely increase. In Massachusetts, we welcomeinvestments in people and property. In Massachusetts, such investments will have no negativeimpact on Evergreen Solar's corporate tax rate and tax burden. The long term tax savings from thesingle sales factor apportionment can often be very substantial and it is not unusual that the valueof these savings can be more than the value of the rest of the incentives combined.Research and Development Tax CreditMassachusetts has the most favorable R&D tax incentive in the nation. In Massachusetts, anycosts which would qualify for the Federal R&D tax credit are eligible for a 10% MassachusettsR&D Tax Credit. This credit can be used in addition to the Investment Tax Credit and can reducetax liability to the minimum of $456 annually. In addition, a 15% R&D Tax Credit is availablefor costs related to donations and contributions made to research organizations such as hospitalsand universities. The R&D credit cannot reduce a corporation's tax liability below the minimum$456 and cannot reduce any tax liability over $25,000 by more than 75%. However, a corporationmay carry forward for an unlimited period of time any portion of the R&D credit which cannotbe allowed in a particular tax year because of this limit.Sales and Use Tax C reditMassachusetts exempts all manufacturing equipment and all R&D equipment from sales and usetaxes. Therefore, regardless of where Evergreen Solar purchases this equipment, Evergreen Solarwill not pay the 5% MA sales tax nor the 5% MA use tax. Based on the same assumptions formachinery and equipment purchases that we made for the PPT exemption (see Exhibit 2), we

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estimate the total machinery and equipment purchases over the 20-year project life to be $200million. We assumed that all of this machinery and equipment is for the purposes of R&D and/ormanufacturing. Based on these assumptions, over the 20-year project period, the sales and usetax exemption savings could be as high as $10,000,000 ($200,000,000 x .05).

IX. Workforce and TrainingWorkforce Training Fund (WTF)The Massachusetts Business Resource Team will assist Evergreen Solar in applying for workforcetraining grants via the Massachusetts Workforce Training Fund (WTF). The WTF provides grantsto train new employees or to upgrade the skills of existing employees. The WTF has no incomerequirements and is especially applicable to Evergreen Solar's more technically skilled workers.Companies applying to the program for the first time receive preference. Companies can receivemultiple grants. This flexible program requires a company match that can be met by "in-kind"expenses incurred in providing the training. Typically, applicants meet the match through thesalaries of employees as they provide or receive the training that is funded by the grant.The grant cap on the WTF is $1 million per company per year. Historically, grants have usuallyaveraged out to approximately $1,100 per employee. However, for more technology drivenindustries like life sciences, grants have averaged closer to $1,600 per employee. Based on thenumber of 310 current employees and projections to add 350 new employees and given the highlytechnical skill requirements for training, Evergreen Solar could very possibly qualify for aWorkforce Training Fund Grant of up to $1,000,000 (660 employees x $1,600/employee).These grant monies would be set up in an account and could be used over a two-year period. Agrant from the Workforce Training Fund requires approval of the Workforce Advisory Board. TheCommonwealth Corporation will provide free application assistance to save you time and moneyand to help ensure that the final application has a higher likelihood of approval.The HIT GrantThe Hiring Incentive Training (HIT) Grant Program is open to all employers. It provides traininggrants of up to $2,000 per employee and up to $30,000 a year per company. This program assistsin paying training costs for newly hired employees who have been unemployed over a year andthose that do not have a call back date from their last employer. Assuming that 10% of the newhires meet the HIT criteria, the potential value of the HIT grant to Evergreen Solar could be ashigh as $30,000 (350 new hires x 10% x $2,000).W orkforce AssistanceUpon site identification, the Department of Workforce Development can facilitate curriculumdevelopment or program design at the nearby community college or technical schoolto ensure access to the training your workforce needs. Once you are ready to hire, DWD's Divisionof Career Service can assist with providing targeted recruitment and prospective employeescreening at one of our 32 One Stop Career Centers across the Commonwealth. DWD is ready tobe an active partner in the education and training of your workforce in Massachusetts.

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X.and Cost SavingsMTC Site in WestboroughThe Commonwealth of Massachusetts is proposing that Phases One and Two of the EvergreenSolar project be located at a publicly owned 13-16 acre parcel in Westborough, Massachusettsadjacent to the Massachusetts Technology Collaborative (MTC) parcel. If the project isconstructed at this site, Evergreen Solar could realize up to $3,000,000 in savings by avoidingland acquisition costs. MTC would retain public ownership of the land and lease the land toEvergreen Solar at a nominal rate for up to 30 years.

XI. Real Estate Tax SavingsMTC Site in WestboroughIn the initial proposal that was submitted to Evergreen Solar for Phase One only, the assumed realestate tax rate was $25.00/$1,000 AV. That tax rate was based on the City of Marlborough's taxrate. The current proposal to locate the project at the MTC site in Westborough will result in asubstantial real estate tax savings. Westborough has a single classification real estate tax rate of$13.66/$1,000 AV. We assumed that the real estate tax rates will remain constant over the 20-yearproject period. For the current project focused on Phase I alone, the real estate tax savingsgenerated by this rate differential will be $12,188,402 (see Exhibit 1).

XII. Massachusetts Its All HereLeading Renewable Energy Clustero Governor Patrick's commitment to bold initiatives to build the renewable energy

sectoro Energy efficiency and renewable energy sectors employ 10,000 in Massachusettso Massachusetts has world leading cluster of renewable energy companieso Massachusetts has 60 renewable energy companies employing more than 3,000o Massachusetts Technology Collaborative (Renewable Energy Trust)o Well established supply chain right here in Massachusettso Next generation renewable energy research being done by nine universities in MA

World Class Workforceo Highest concentration of bachelors and masters degees in the countryo Highest concentration of science and engineering degrees in the countryo Ranked rd nationally in worker productivityo Large, highly skilled, experienced workforce in energy and technology sectors

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#1 Education S ystem in the C ountry Postsecondary and Pu blic S chools (K-12)o Three of the top fifteen research universities (measured by technology licensing

revenues) in the country (University of Massachusetts, Harvard, MIT)o Highest concentration of college students in the countryPublic Schoolso # 1 nationally in SAT assessment test scores in math and #2 in verbalo # I nationally in NEA assessment test scores in both math and reading

I-495/Central Massachusetts corridor strikes a balance between access to a highly skilledworkforce, affordability, and access to major highways, airports, and rail transportationo Located in the heart of the technology sector workforce in MAo Located only 10 minutes from the Marlborough facility and next door to MTCo Westborough is at intersection of1-495, Mass Pike, and Rte. 9

o Within 60 miles of nearly every major postsecondary institution in Massachusetts.o Within 45 minutes of Logan International Airporto Direct commuter rail direct service to Boston and Worcestero Cost of Living Index of Central Massachusetts is 50%-70% lower than Boston

Excellent Quality of Life to Attract and Retain Professional and Technical Personnelo Proximity to great public schools W estborough and neighboring Shrewsbury,Nortlaborough and Southborough all among top 25 school systems in the state

o Very low violent crime rateo Within 35 miles of five of top hospitals in the country (Mass General, Brigham and

Women's, Dana Farber, Beth Israel Deaconess, and Children's Hospital)o 45 minutes to the history of Boston or the seashore, 2 hours to world-class skiingo Home of the world renowned Boston Symphony and Boston Popso Home of the World Champion New England Patriots and Boston Red Sox

NEW ECONOMY INDEX 1 (1=HIGHEST, 50=LOWEST)Other States V. MassachusettsNM NY OR MA

Overall State Ranking 27 10 1 1 1Knowledge Jobs 25 1 1 7 3Economic Dynamism 37 21 I7 3Digital Economy 41 14 6 1Innovation Capacity 7 14 18 1High Tech Jobs 15 1 8 12 1

Source: Progressive Policy Institute

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Milken Science and Technology Index 22002 2004 Rank Change Score

Massachusetts 1 1 0 84.35New York 7 7 0 69.03New Mexico 20 14 6 61.75Oregon 23 19 4 57.76Footnotes:`The 2004 State Technology and Science Index encapsulates each state's comprehensive inventory of technology andscience assets that can be leveraged to promote economic development.The Index provides states with a benchmark, monitors their technology progress and can be leveraged to promoteeconomic growth. It provides a valuable framework of measures to guide state policy makers and the public on therealities of their performance in the knowledge-based economy of today. "Places that can attract, grow and retainfirms and industries proficient at deploying information technology, in addition to producing it, will be at acompetitive advantage," the report says. "The degree to which a state's knowledge assets are harnessed and convertedinto successful innovations, products and services determine its economic future."

Please feel free to contact us with any questions regarding the proposal or to let us know what we cando to further assist Evergreen Solar on this important decision. The Commonwealth of Massachusettsand its partners look forward to working with Evergreen Solar to make its new manufacturing facilityin Massachusetts a large success.

Arthur P. RobertIndustry Director, Renewable EnergyMassachusetts Office of Business Development(617) 788-3656

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Massachusetts Technology Collaborative Special Grant0,000,000Massachusetts Technology Collaborative LORI Grant00,000MORE Jobs Infrastructure Grant0,000,000CDAG Infrastructure Grant,000,000PWED Infrastructure Grant,000,000Land Cost Savings,000,000Real Estate Tax Savings (vs. Preliminary Proposal)2,188,402Workforce Training Fund Grant,000,000lILT Grant0,000Real Estate Tax Exemption Savings "TIE" (EDIP) **34,099100% Personal Property Tax Exemption (EDIP) *0,770,9105% Investment Tax Credit (EDIP),500,090Sales and Use Tax Exemptions0,000,000Single Sales Tax Factor estimated savingsBDResearch & Development Tax Credit (10-15%)BDFinancing Principal (MDFA, MTC, and Citizens)7,500,000Financing Estimated Interest Savings ***-,593,080Total Estimated Value of Proposal ****7.816,491


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Exhibit 2Evergreen Solar proposal - Personal Property Tax Exemption Schedule

Year Initial EquipmentInvestment Value Value of AdditionalEquipment PurchasesTotal ValueEquipment

PPT TaxesPPT Rate w/o TIF Exemption

PPT TaxSavings vv/TIF1 $87,000,000 $2,000,000 $89,000,000 $13.66 $1,215,740 100% $1,215,7402 $78,300,000 $4,000,000 $82,300,000 $13.66 $1,124,218 100% $1,124,2183 $69,600,000 $6,000,000 $75,600,000 $13.66 $1,032,696 100% $1,032,6964 $60,900,000 $8,000,000 $68,900,000 $13.66 $941,174 100% $941,1745 $52,200,000 $10,000,000 $62,200,000 $13.66 $849,652 100% $849,6526 $43,500,000 $12,000,000 $55,500,000 $13.66 $758,130 100% $758,1307 $34,800,000 $14,000,000 $48,800,000 $13.66 $666,608 100% $666,6088 $26,100,000 $16,000,000 $42,100,000 $13.66 $575,086 100% $575,0869 $17,400,000 $18,000,000 $35,400,000 $13.66 $483,564 100% $483,56410 $8,700,000 $20,000,000 $28,700,000 $13.66 $392,042 100% $392,04211 $20,000,000 $20,000,000 $13.66 $273,200 100% $273,20012 $20,000,000 $20,000,000 $13.66 $273,200 100% $273,20013 $20,000,000 $20,000,000 $13.66 $273,200 100% $273,20014 $20,000,000 $20,000,000 $13.66 $273,200 100% $273,20015 $20,000,000 $20,000,000 $13.66 $273,200 100% $273,20016 $20,000,000 $20,000,000 $13.66 $273,200 100% $273,20017 $20,000,000 $20,000,000 $13.66 $273,200 100% $273,20018 $20,000,000 $20, 000,000 $13.66 $273,200 100% $273,20019 $20,000,000 $20,000,000 $13.66 $273,200 100% $273,20020 $20,000,000 $20,000,000 $13.66 $273,200 100% $273,200

Total $10,770,910 $10,770,910


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COMMONWEALTH OF MASSACHUSETTSDEPARTMENT OF BUSINESS AND IC HNOLOG YMASSACHUSETTS OFFICE OF BUSINESS DEVELOPMENTInternet: http://www.mass.gov/econ

DEVAL PATRICKGOVERNORTIMOTHY MURRAYLIEUTENANT GOVERNOR

March 12, 2007I am pleased to provide you with the Commonwealth's Preliminary Incentives, Financing, andSavings Proposal to Evergreen Solar valued at up to $113,055,169 to effect the location of its newmanufacturing facility at the MTC site in Westborough, Massachusetts. The proposal includesgrants, tax exemptions, tax credits, cost offsets, financing, and identified savings. Assumptions usedto calculate the savings and incentives are detailed in each section.The incentives and savings provided herein are predicated on information provided to us byEvergreen Solar regarding project investment, employment, environmental impact, and timingparameters, and are subject to change should revisions be made to these criteria. For purposes of thisproposal, we have calculated our economic development incentives, financing, and savings basedupon the following assumptions:

Capitalobsobsates ofInvestmentreatedetainedonstructionTotal Project260,000,0000010007-2008Attached, you will find: 1) a summary proposal, 2) a description of each of the programs and themethod/assumptions used to calculate the savings, and 3) additional data regarding theMassachusetts advantages. We are confident that our highly skilled workforce, world leadingeducational system., innovative economy, leading technology industry cluster, strong state and localgovernment support, a vigorous commitment by Governor Patrick to grow the renewable energysector, and a strong incentives package will provide Evergreen Solar with the ideal environment inwhich to thrive.Please call Mr. Art Robert if you have any questions regarding the proposal. The Commonwealth ofMassachusetts is enthusiastically committed to working with Evergreen Solar to assist you in asuccessful startup of your new manufacturing facility in Massachusetts.

Sincerely,

Robert Coulklinrthur P. RobertUndersecretary for Business Developmentndustry Director, Renewable EnergyTel. (617) 788-3688el. (617) 788-3656


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I. Summary - MA Estimated Incentives, Savings and Financine_ProposalMassachusetts Technology Collaborative Special Grant $0,000,000Massachusetts Technology Collaborative LORI Grant $00,000MORE Jobs Infrastructure Grant $0,000,000CDAG Infrastructure Grant S,000,000PWED Infrastructure Grant S,000,000Land Cost Savings $,000,000Real Estate Tax Savings (vs. Preliminary Proposal) $4,376,804Workforce Training Fund Grant $,000,000HIT Grant 140,000Real. Estate Tax Exemption Savings "TIF" (EDIP) ** 1,468,197100% Personal Property Tax Exemption (EDIP) * $5,831,9405% Investment Tax Credit (EDIP) $3,000,000Sales and Use Tax Exemptions $0,000,000Single Sales Tax Factor estimated savings TBDResearch & Development Tax Credit (10-15%) SBDFinancing Principal (MDFA, MTC, and Citizens) $7,500,000Financing Interest Savings (vs. 12% private rate) 4.238,228***Total Estimated Value of Proposal $13,055,169* Personal Property Tax exemption savings over 20-year project period (see Exhibit 2)** Assumes a negotiated TIF that gives an average 5% exemption for 20 years per the attachedschedule (Exhibit 1). The actual exemption percentage and project period will be negotiated betweenWestborough and Evergreen Solar . This number is for illustrative purposes only and does notrepresent a proposal from any specific municipality. We assumed the incremental value of thebuilding to be $80,000,000 and the real estate tax rate to be $13.66/$1,000 AV.*** Includes grants, tax credits, offsets, identified savings, loan principal and interest savings

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COMMONW EALTH OF MASSACHUSETTSDEPARTMENT OF BUSINESS AND TECHNO LOGYMASSACHU SETTS OFFICE OF BUSINESS DEVELOPMENTONE ASHBURTON PLACE SUITE 2101BOSTON, MA 02108

TELEPHONE: 617-788-3670FAX: 617-788-3695Internet: http://www.rnass.gov/mobd

DEVAL PATRICKGOVERNORTIMOTHY MURRAYLIEUTENANT GOVERNOR Commonwealth of MassachusettsIncentives, Savings, and Financing Proposal

DANIEL OCONNELLSECRETARY OF HOUSING ANDECONOMIC DEVELOPMENT

ROBERT COUGHLINUNDERSECRETARY OF BUSINESSDEVELOPMENTPrepared exclusively for

Evergreen SolarMarch 12, 2007

This proposal outlines the general terms of the incentives, savings, and financing package beingoffered by Massachusetts to Evergreen Solar to assist with the location construction of a newmanufacturing facility in Westborough, Massachusetts. This offer is subject to the successfulcompletion of applications as noted and compliance with program requirements. The incentivesrelated to the Economic Development Incentive Program are subject to negotiation with andapproval by the town of Westborough. In order to be eligible for the Economic DevelopmentIncentive Program, Evergreen Solar must locate the facility in an ETA designated municipality.Approval of grants from the Workforce Training Fund are subject to completion and submission ofa complete application by the company and approval by the WTF Advisory Board.

II. General Informationa) Contact Information:r. Richard ChleboskiVP Worldwide ExpansionsEvergreen Solarb) Proposed Project Location:TC Site in Westborough, Massachusettsc) Type of B usiness:anufacturing of solar cells and panels3


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HI. Project OverviewDescriptionTo support the growth in its business, Evergreen Solar plans to build a new 500,000 s.f.manufacturing facility. Evergreen Solar plans to invest $260,000,000 for real estate, buildingconstruction, and equipment at the site. Phase one of the project will create 400 new jobs and $150million in private investment. Phase two, which is expected to follow within 12 months of phase one,will create an additional 300 jobs and an additional private investment of $110 million. Thisproposal is based upon locating the facility on state owned land adjacent to the MTC facility inWestborough.Company Employment PlanIn addition to retaining the 310 jobs currently located at their Marlborough facility, Evergreen Solarwill add 700 new jobs at an average salary of $51,000.

IV. Job Creation and Investment IncentivesEconomic Development Incentive Program (EDIP)Through the EDIP, designated Economic Target Area (ETA) communities, in partnership with theCommonwealth, can provide 1) real estate property tax exemptions, 2) personal property taxexemp tions, and 3) investmen t tax credits to businesses locating to or expanding in the community.The EDIP is a three-way partnership between the state, the municipality and the participating jobcreating business.EDIP How it Works

The municipality makes available local Tax Increment Financing (TIF) - a negotiated realestate tax exemption based on a percentage of the value added through renovation or newconstruction. The duration of the TIF is for a period of no less than five years and no more thantwenty years. The terms of the TIF are negotiated between the property owner seeking thebenefits of the EDIP and the municipality . The state does not participate in that negotiation. Inaddition to the negotiated TT real estate property tax exemption, the business wouldautomatically receive a 100% personal property tax exemption on the site for the life of theproject.

To qualify for the EDIP incentives a participating business must become a "CertifiedProject". As part of the Certified Project, the business must agree to create at least onepermanent full-time, net new Massachusetts job. As part of the Certified Project, the businessalso agrees to a specific level of private investment and job retention where applicable. Uponmunicipal approval, and then the approval of the Economic Assistance Coordinating Council(EACC), the state makes available a 5% investment tax credit known as the 5% EconomicOpportunity Area Credit.

Illustrative Example of EDIP and Hypothetical Savings4


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Real Estate Property Tax Exemption SavingsThe terms of the TIF agreement are to be determined through negotiation between Westborough andEvergreen Solar. For illustration purposes only (to demonstrate how the TIF works), we haveassumed the new building of 500,000s.f. will result in an incremental value of $80.000,000 ($160per s.f.). We assumed that this value will increase by 3% annually. We used Westborough's currentcommercial real estate tax rate of $13.6651,000 AV. Therefore, there will be an initial incrementalannual real estate tax liability of $1,092,800. This liability will grow 3% annually. If we assume thatthe negotiated TIF is for 20-years and provides an annual exemption of 5%, then the total savingsfrom the real estate property tax exemption (TIF) over the 20-year life of the project will be$1,468,197 (see attached Exhibit 1 TIF Spreadsheet). Please note that this illustration is not aproposal from any municipality and that the actual terms of a TIF, including the length of the TIFperiod, must be negotiated between Evergreen Solar and the town of Westborough. Westborough isnot currently an ETA municipality and would have to become one by approving the ETA designationand receiving approval from the EACC before offering a TIF.Personal Property Tax SavingsAs a Certified Project with a TIF agreement, Evergreen Solar will automatically qualify for a 100%exemption on personal property taxes over the 20 year life of the project at this site. Beyond the 20-year project period, as a manufacturing corporation in Massachusetts, Evergreen Solar will qualifyfor a 100% exemption on personal property taxes on all manufacturing equipment. Based on thenumbers provided by Evergreen Solar, there will be $160,000,000 in tangible depreciable assets(equipment) at the new facility. We assumed that these would be depreciated on a straight-line basisover 10 years. We then assumed that an additional $2 million of equipment would be purchasedannually and also depreciated over a ten year period. We assumed the personal property tax rate tobe $15.00/1,000 in value. Over the 20-year life of the project, the total Personal Property Taxexemption savings is estimated to be $15,831,940 (see attached Exhibit 2 Personal Property TaxExemption Spreadsheet).Commonwealth of MassachusettsInvestment Tax CreditSuccessful completion of the EDIP process, as outlined above, will facilitate the extension of anEOA Investment Tax Credit (EOA-ITC) of 5% to Evergreen Solar as a "Certified Project". TheEOA-ITC can be utilized by the certified project business during the entire term of the TIF agreementbetween the property owner and the municipality (in this example 20 years).Based on the $260,000,000 investment in real estate, equipment, and facilities provided to us byEvergreen Solar and assuming all of these qualify for the investment tax credit, the total 5%Investment Tax Credit will be $13,000,000. This amount can be applied directly against anyMassachusetts tax obligation (though use of the EOA-ITC cannot in any single year reduceMassachusetts tax liability by greater than 50%). Unused credits may be carried forward tosubsequent years over the 20-year life of the project (through 2026). Our assumption is thatEvergreen Solar will be in a position to fully utilize the available credits during the 20-year projectlife.V. Renewable Energy Trust (MTC) GrantsMassachusetts Technology Collaborative Special. Grant

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The Massachusetts Technology Collaborative (MTC) through its Renewable Energy Trust(RET) will provide a $10,000,000 grant to be used to offset the costs of construction andequipment for E vergreen S olar's new manufacturing facility. In return, Evergreen Solar mustcommit to creating 700 new incremental full-time jobs at the new Massachusetts facility (above andbeyond the 310 jobs currently employed in Massachusetts) over a 24 month period from completionof construction and Evergreen Solar must commit to an investment of $260 million in the new facilityfor real estate, construction, and equipment. The new jobs created must be sustained over a five yearperiod. The grant and its terms must be approved by the MTC Board.MTC LORI GrantThe Massachusetts Technology Collaborative (MTC), as administrator of the Renewable EnergyTrust Fund (the Trust), is seeking applications for the Large Onsite Renewables Initiative to expandthe production and use of distributed renewable energy technologies in Massachusetts. MTC seeks todevelop a diverse portfolio of renewable energy projects across a variety or locations, technologies,and building types. Round 3, has approximately $3.5 million available. Applicants will be subject toa competitive selection process. LORI applicants may request funding in two activity areas:Feasibility Study Grants and Design & Construction Grants.During open solicitation rounds, LORI will accept grant applications for deVelopment of eligiblerenewable energy projects(s) with greater than 10 kilowatts of nameplate capacity that are located atcommercial, industrial, institutional, and public facilities that will consume more than 25% of therenewable energy generated by the project onsite. The applicant and project site(s) must be acustomer of a Massachusetts investor-owned electric distribution utility. The grant awards may beused to facilitate the installation of renewable energy projects on existing buildings (retrofits) or inconjunction with new construction/major renovation projects, including green buildings. MTCleadership has recommended that a $500,000 grant be provided to the Evergreen Solar projectthrough the LORI program . The grant award must be approved by the MTC Board.VI. Infrastructure GrantsMORE Jobs Capital ProgramThe MORE Jobs Capital Program was established in an economic stimulus bill that was passed bythe legislature and signed into law by Governor Romney on June 24, 2006 (Chapter 123 of the Actsof 2006). The MORE Jobs Capital Program may be used to fund public infrastructure requirementsof business expansion and relocation projects that will enable a private investment to occur resultingin the creation of at least 100 new jobs in Massachusetts over a 24 month period. Other programrequirements are that the project must generate substantial sales from outside the Commonwealth andthe company must maintain the newly created jobs for at least five years. The grant can be used forpublic infrastructure such as roadways, sewer, utilities, water, wastewater, etc. The grant must beapplied for jointly by the company and the municipality. The application and grant award must beapproved by the Secretary of Economic Development and Housing. Grant monies will be madeavailable to the municipality as a reimbursement for the capital costs of the public infrastructureproject. The Evergreen Solar project will create 700 new jobs, and MOBD will recommend agrant of up to $10,000,000 to pay for a ny eligible public infrastructure required by the project.Community Development Action Grant (CDAG)The Community Development Action Grant Program (CDAG), funded by the Commonwealth,provides support for publicly owned or managed projects in areas where private investment will nototherwise occur without the CDAG grant. The goal is to stimulate economic development activities

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that will attract and leverage private investment, create or retain long-term employment and revitalizedistressed areas. Any city or town in the Commonwealth is eligible to apply to DHCD for CDAGfunds. The amount of CDAG funding requested by the community must be the minimum amountnecessary to make the project feasible and any benefit to private entities or individuals must beindirect and incidental and not the purpose of the project. CDAG can be used in a variety of ways,including installation, improvement, construction, repair, rehabilitation or reconstruction ofbuildings or other structures, facades, streets, roadways, thoroughfares, sidewalks, rail spurs, utilitydistribution systems, water and sewer lines, for site preparation and improvements, demolition ofexisting structures, and relocation assistance. A community may submit one individual applicationand/or one joint application for CDAG funding for the CDAG FY08 funding round. IndividualCDAG awards are limited to a maximum of $1 million per project. The Evergreen Solar project iseligible to receive a CDAG grant of up to $1,000,000 for eligible public infrastructure costs.Public Works Economic Development Program (PWED) GrantThe PWED Program provides grants to municipalities for the design and construction of roads androadways and any other transportation related projects that support economic development. PWEDgrants are approved by the Executive Office of Transportation. Any city or town in theCommonwealth is eligible to apply to for PWED funds. There is a grant cap of $1,000,000 perproject per municipality. The Evergreen Solar project is eligible to receive a PWED grant of upto $1,000,000 for eligible public roadway construction/upgrade costs.VII. FinancingA total financing package of $15,000,000 for the private investment in building and equipmentwill be supplied by three sources MassDevelopment, Renewable Energy Trust (MTC), andCitizens Bank. All financing terms will be contingent upon satisfactory due diligence andcontingent upon approval by the respective Boards of MassDevelopment and MassachusettsTechnology Collaborative and successful underwriting by Citizen's Bank.Mass Development Emerging Technology FundLoan Amount:5,000,000 (not to exceed 25% of total project cost) to be broken out asfollows: $2,500,000 tied to Phase One and $2,500,000 tied to Phase TwoInterest rate:hase One Loan: $2,500,000 @ 4%Phase Two Loan: $2,500,000 @ Prime RateCommitment Fee:%Term:years (first 18 months interest only with the outstanding principal to be

amortized over the remaining 66 months)Collateral:irst position lien on the assets financed and a further lien on all businessassets. If a separate entity holds the financed assets, a guarantee from theparent company would be required. The collateral is subject to furthernegotiation.Success Fee:arrants (To Be Negotiated)7


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Approval:ust receive formal approval by the MassDevelopment Board.Renewable Enemy Trust (MTC)Loan Amount:5,000,000 (not to exceed 25% of the project cost) to be broken out as

follows: $2,500,000 tied to Phase One and $2,500,000 tied to Phase Two.Interest rate:hase One Loan: $2,500,000 @ 4%Phase Two Loan: $2,500,000 @ Prime RateCommitment Fee:%Term:years (first 18 months interest only with the outstanding principal to beamortized over the remaining 66 months)Collateral:ame as MassDevelopment. Subject to further negotiations.Success Fee:arrants (To Be Negotiated)Approval:ust receive formal approval by the Massachusetts Technology CollaborativeBoardCitizens Job Bank Program E conomic Development LoanLoan Amount: $7,500,000 (provided that the amount is less than $40,000 per new jobcreated within 36 months of the completion of the project and provided that

the loan amount does not exceed 75% of total Project Costs).$5,000,000 4.99% (Job Bank Program)$2,500,000 @ 5.99%Annual costs of loan including title insurance premiums, recording fees,appraisal fees, environmental report fees, legal fees, etc.5 years Fully Aortized (Interest only for first 18 months)Same as MassDevelopment. Subject to further negotiations.Warrants (To Be Negotiated)

Interest rate:

Fees:

Term:Collateral:Success Fee:

Underwriting:pproval of this Economic Development Loan by Citizens is subject toCitizens' normal underwriting guidelines and loan approval requirements andshall be documented on Citizens normal loan documentation.

VIM Corporate TaxesSingle Sales Factor Tax Apportionment

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A potentially significant cost advantage in Massachusetts to manufacturers like Evergreen Solar isthe "single sales factor" tax apportionment. For manufacturing corporations with multi-state taxfilings, the single sales factor apportions state corporate income tax based solely on a ratio of in-statesales to total sales. Other states typically use more complicated apportionment formulas, whichinclude not only the in-state sales ratio but also include the ratio of in-state payroll to total payrolland the ratio of in-state property to total property. The practical implication is that these statespenalize companies that hold and add tangible assets and jobs in that state. For instance, California,New Jersey, and New Mexico all use multiple factor apportionment, which penalizes manufacturersfor owning property and paying wages in-state. As manufacturers like Evergreen Solar expand theirfacilities and create new jobs in these states, the effective tax rate and the resultant tax burden for thecompany will likely increase. In Massachusetts, we welcome investments in people and property. InMassachusetts, such investments will have no negative impact on Evergreen Solar's corporate taxrate and tax burden. The long term tax savings from the single sales factor apportionment can oftenbe very substantial and it is not unusual that the value of these savings can be more than the value ofthe rest of the incentives combined.Research and Development Tax Credit

Massachusetts has the most favorable R&D tax incentive in the nation. In Massachusetts, any costswhich would qualify for the Federal R&D tax credit are eligible for a 10% Massachusetts R&D TaxCredit. This credit can be used in addition to the Investment Tax Credit and can reduce tax liabilityto the minimum of $456 annually. In addition, a 15% R&D Tax Credit is available for costs relatedto donations and contributions made to research organizations such as hospitals and universities. TheR&D credit cannot reduce a corporation's tax liability below the minimum $456 and cannot reduceany tax liability over $25,000 by more than 75%. However, a corporation may carry forward for anunlimited period of time any portion of the R&D credit which cannot be allowed in a particular taxyear because of this limit.Sales and Use Tax CreditMassachusetts exempts all manufacturing equipment and all R&D equipment from sales and usetaxes. Therefore, regardless of where Evergreen Solar purchases this equipment, Evergreen Solarwill not pay the 5% MA sales tax nor the 5% MA use tax. Based on the same assumptions formachinery and equipment purchases that we made for the PPT exemption (see Exhibit 2), weestimate the total machinery and equipment purchases over the 20-year project life to be $200million. We assumed that all of this machinery and equipment is for the purposes of R&D and/ormanufacturing. Based on these assumptions, over the 20-year project period, the sales and use taxexemption savings could be as high as $10,000,000 ($200,000,000 x .05).

IX. Workforce and TrainingWorkforce Training Fund (WTF)The Massachusetts Business Resource Team will assist Evergreen Solar in applying for workforcetraining grants via the Massachusetts Workforce Training Fund (WTF). The WTF provides grants totrain new employees or to upgrade the skills of existing employees. The WTF has no incomerequirements and is especially applicable to Evergreen Solar's more technically skilled workers.Companies applying to the program for the first time receive preference. Companies can receive

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multiple grants. This flexible program requires a company match that can be met by "in-kind"expenses incurred in providing the training. Typically, applicants meet the match through thesalaries of employees as they provide or receive the training that is funded by the grant.The grant cap on the WTF is $1 million per company per year. Historically, grants have usuallyaveraged out to approximately $1,100 per employee. However, for more technology drivenindustries like life sciences, grants have averaged closer to $1,600 per employee. Based on thenumber of 310 current employees and projections to add 700 new employees and given the highlytechnical skill requirements for training, Evergreen Solar could very possibly qualify for aWorkforce Training Fund Grant of up to $1,000,000 (1,010 employees x $999/employee). Thesegrant monies would be set up in an account and could be used over a two-year period. A grant fromthe Workforce Training Fund requires approval of the Workforce Advisory Board. TheCommonwealth Corporation will provide free application assistance to save you time and money andto help ensure that the final application has a higher likelihood of approval.

The HIT GrantThe Hiring Incentive Training (HIT) Grant Program is open to all employers. It provides traininggrants of up to $2,000 per employee and up to $30,000 a year per company. This program assists inpaying training costs for newly hired employees who have been unemployed over a year and thosethat do not have a call back date from their last employer. Assuming that 10% of the new hires meetthe HIT criteria, the potential value of the HIT grant to Evergreen Solar could be as high as$140,000 (700 new hires x 10% x $2,000).W orkforce AssistanceUpon site identification, the Department of Workforce Development can facilitate curriculumdevelopment or program design at the nearby community college or technical school to ensure accessto the training your workforce needs. Once you are ready to hire, DWD's Division of Career Servicecan assist with providing targeted recruitment and prospective employee screening at one of our 32One Stop Career Centers across the Commonwealth. DWD is ready to be an active partner in theeducation and training of your workforce in Massachusetts.

X.and Cost SavingsMTC Site in WestboroughThe Commonwealth of Massachusetts is proposing that Phases One and Two of the Evergreen Solarproject be located at a publicly owned 13-16 acre parcel in Westborough, Massachusetts adjacent tothe Massachusetts Technology Collaborative (MTC) parcel. If the project is constructed at this site,Evergreen Solar could realize up to $3,000,000 in savings by avoiding land acquisition costs.MTC would retain public ownership of the land and lease the land to Evergreen Solar at a nominalrate for up to 30 years.

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XI. Real Estate Tax SavingsMTC Site in WestboroughIn the initial proposal that was submitted to Evergreen Solar for Phase One only, the assumed realestate tax rate rate was $25.00/$1,000 AV. That tax rate was based on the City of Marlborough's taxrate. The current proposal to locate the project at the MTC site in Westborough will result in asubstantial real estate tax savings. Westborough has a single classification real estate tax rate of$13.66/$1,000 AV. We assumed that the real estate tax rates will remain constant over the 20-yearproject period. For the current project combining Phases One and Two, the real estate taxsavings generated by this rate differential will be $24,376,804 (see Exhibit 3).

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XII. Massachusetts Its All HereLeading Renewable Energy Clustero Governor Patrick's commitment to bold initiatives to build the renewable energy

sectoro Energy efficiency and renewable energy sectors employ 10,000 in Massachusettso Massachusettts has world leading cluster of renewable energy companieso Massachusetts has 60 renewable energy companies employing more than 3,000o Massachusetts Technology Collaborative (Renewable Energy Trust)o Well established supply chain right here in Massachusettso Next generation renewable energy research being done by nine universities in MA

World Class Workforceo Highest concentration of bachelors and masters degrees in the countryo Highest concentration of science and engineering degrees in the countryo Ranked 2n d nationally in worker productivityo Large, highly skilled, experienced workforce in energy and technology sectors

#1 Education S ystem in the Cou ntry Postsecondary and Public Schools (K-12)o Three of the top fifteen research universities (measured by technology licensing

revenues) in the country (University of Massachusetts, Harvard, MIT)o Highest concentration of college students in the countryPublic Schoolso # .1 nationally in SAT assessment test scores in math and #2 in verbalo # 1 nationally in NEA assessment test scores in both math and reading

I-495/Central Massachusetts corridor strikes a balance between access to a highly skilledworkforce, affordability, and access to major highways, airports, and rail transportationo Located in the heart of the technology sector workforce in MAo Located only 10 minutes from the Marlborough facility and next door to MTCo W estborough is at intersection of 1 -495, Mass Pike, and Rte. 9

o Within 60 miles of nearly every major postsecondary institution in Massachusetts.o Within 45 minutes of Logan International Airporto Direct commuter rail direct service to Boston and Worcestero Cost of Living Index of Central Massachusetts is 50%-70% lower than Boston

Excellent Quality of Life to Attract and Retain Professional and Technical Personnelo Proximity to great public schools W estborough and neighboring Shrewsbury,Northborough and Southborough all among top 25 school systems in the stateo Very low violent crime rate

o Within 35 miles of five of top hospitals in the country (Mass General, Brigham andWomen's, Dana Farber, Beth Israel Deaconess, and Children's Hospital)

o 45 minutes to the history of Boston or the seashore, 2 hours to world-class skiingo Home of the world renowned Boston Symphony and Boston Popso Home of the World Champion New England Patriots and Boston Red Sox12


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NEW ECONOMY INDEX' (1=HIGHEST, 50=LOWEST)Other States V. MassachusettsNM NY OR MAOverall State Ranking 27 1 0 11 1Knowledge Jobs 25 11 7 3Economic Dynamism 37 21 17 3Digital Economy 41 1 4 6 1Innovation Capacity 7 14 1 8 1High Tech Jobs 15 18 12 1

Source: Progressive Policy InstituteMilken Science and Technology Index2

2002 2004 Rank Change ScoreMassachusetts 1 1 0 84.35New York 7 7 0 69.03New Mexico 20 1 4 6 61.75Oregon 23 19 4 57.76Footnotes:2The 2004 State Technology and Science Index encapsulates each state's comprehensive inventory of technology andscience assets that can be leveraged to promote economic development.The Index provides states with a benchm ark, monitors their technology progress and can be leveraged to promoteeconomic growth. It provides a valuable framework of m easures to guide state policy makers and the public on therealities of their performance in the knowledge-based economy of today. "Places that can attract, grow and retain firmsand industries proficient at deploying information technology, in addition to producing it, will be at a competitiveadvantage," the report says. "The degree to which a state's knowledge assets are harnessed and converted into successfulinnovations, products and services determine its economic future."

Please feel free to contact us with any questions regarding the proposal or to let us know what we can doto further assist Evergreen Solar on this important decision. The Commonwealth of Massachusetts andits partners look forward to working with Evergreen Solar to make its new manufacturing facility inMassachusetts a large success.

Arthur P. RobertIndustry Director, Renewable EnergyMassachusetts Office of Business Development

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EVERGREEN SOLAR PHASE 2PROJECTED INCENTIVES, VS. PHASE 1GRANTS PHASE 1 PHASE 2 PHASE 2 NOTESMassacbuetts Technology Collaborative Special Grant $ 10,000,000 SMassachusetts Technology Large ensile Renewables InitiativeGrant $00,000 $MORE JOBS Infrastructure Grant S 10,000,000 SCDAG Infrastructure Grant $,000,000 S Not a credible offerPWED Infrastructure Grant $,000,000 S,000,000 Maybe? To Devens?Workforce Training Fund Grant S,000,000 S25,000 A realistic valueHiring Incentive Training (HIT) Grant S6,000 $0,000TAX INCREMENT FINANCINGReal Estate Tax Exemption Savings "TIP' (EDIP) *" S05,195 $655,673 Assumes 5% over 20 years100% Personal Property Tax Exemption (EDIP) * $ 10,770,910 $11,243,000 Different Rate5% Investment Tax Credit (EDIT') S,500,000 7,000,000TAX INCENTIVESSales and Use Tax Exemptions S 10,000,000 $,300,000Single Sales Tax Factor estimated savings TBD TB DResearch & Development Tax Credit (10-15%) TB D TB DFINANCINGMTC's Business Expansion Initiative (BEI) $,000,000MassDevelopment's Emerging Techology Fund (ETF) $,000,000 $Citizen's Job Bank S,500,000 up to $,600,000 Probably nut interestedFinancing - Interest Savings $,593,080OTHERLand Costs Savings S,400,000 N/ AOTHER CRITICAL ADVANTAGESHigh AccessibilityHigh-Quality WorkforceHigh-Quality Education SystemGovernor's Commitment to Renewable EnergyA Leading Innovation EconomyHigh Quality of Life

Total Estimated Value of Proposal $ 74,999 185 54,753.673ItalicsrojectedAssumptions:* Roughly doubling the project* Projected investment140.000,000, or 93% of Phase 1* Costs & benefits reduced in proportion


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COMMONWEALTH OF MASSACHUSETTSDEPARTMENT OF BUSINESS AND TECHNOLOGYMASSACHUSETTS OFFICE OF BU SINESS DEVELOPMENTInternet: http://wwvv.mass.goviecon

DEVAL PATRICKGOVERNORTIMOTHY MURRAYLIEUTENANT GOVERNOR

March 26, 2007I am pleased to provide you with the Commonwealth's Preliminary Incentives, Financing, andSavings Proposal to Evergreen Solar valued at up to 5110,786,941 to effect the location of its newmanufacturing facility at the MTC site in Westborough, Massachusetts. The proposal includesgrants, tax exemptions, tax credits, cost offsets, financing, and identified savings. Assumptionsused to calculate the savings and incentives are detailed in each section.The incentives and savings provided herein are predicated on information provided to us byEvergreen Solar regarding project investment, employment, environmental impact, and timingparameters, and are subject to change should revisions be made to these criteria. For purposes ofthis proposal, we have calculated our economic development incentives, financing, and savingsbased upon the following assumptions:

Capitalobsobsates ofInvestmentreatedetainedonstructionTotal Project150,00,000001 0007-2008Attached, you will find: 1) aummary proposal, 2) a description of each of the programs and themethod/assumptions used to calculate the savings, and 3) additional data regarding theMassachusetts advantages. We are confident that our highly skilled workforce, world leadingeducational system, innovative economy, leading technology industry cluster, strong state andlocal government support, a vigorous commitment by Governor Patrick to grow the renewableenergy sector, and a strong incentives package will provide Evergreen Solar with the idealenvironment in which to thrive.Please call Mr. Art Robert if you have any questions regarding the proposal. The Commonwealthof Massachusetts is enthusiastically committed to working with Evergreen Solar to assist you in asuccessful startup of your new manufacturing facility in Massachusetts.

Sincerely,

Robert Coughlinrthur P. RobertUndersecretary for Business Developmentndustry Director, Renewable Energy(617) 788-3688el. (617) 788-36561


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I. Summary - MA Estimated Incentives, Savings, and Financing ProposalMassachusetts Technology Collaborative Special Grant $0,000,000Massachusetts Technology Collaborative LORI Grant 500,000MORE Jobs Infrastructure Grant $0,000,000CDAG Infrastructure Grant 1,000,000PWED Infrastructure Grant 1,000,000Land Cost Savings $,000,000Real Estate Tax Savings (vs. Preliminary P

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