Master Joint Venture Agreement

Exhibit 10.17


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


MASTER JOINT VENTURE AGREEMENT


BY AND AMONG


EVERGREEN SOLAR, INC.


Q - CELLS AG


RENEWABLE ENERGY CORPORATION


AND


EVERQ GMBH


TABLE OF CONTENTS


PAGE
---- ARTICLE I. Relation to Existing Agreements; Interpretation, Relation
to Articles, Participation of EverQ........................ 4
1.1 Relation to Existing Agreements......................... 4
1.2 Definitions............................................. 4
1.3 Headings and Other Interpretation....................... 11
1.4 Relation to Articles of Association..................... 11
1.5 German Legal Terms...................................... 11
1.6 Participation of EverQ.................................. 11


ARTICLE II. Purpose of EverQ, Share Sale and Transfer.................. 12
2.1 Purpose of EverQ........................................ 12
2.2 Share Transfer in EverQ................................. 12


ARTICLE III. Management and Operation of EverQ.......................... 13
3.1 Management and Supervision of EverQ..................... 13
3.2 Accounting Matters; Basic Financial Inspection Rights... 13
3.3 Other Financial Matters................................. 14
3.4 Second REC Supply Agreement and REC Option.............. 14
3.5 Capacity Expansion and Additional Financing............. 15
3.6 Directors............................................... 19
3.7 Indemnification......................................... 19


ARTICLE IV. Restrictions on Transfer; Right of First Refusal for Sale
of Shares.................................................. 20
4.1 Restrictions on Transfer; Exceptions.................... 20
4.2 Right to Notice......................................... 20
4.3 Exercise of Right of First Refusal...................... 20
4.4 Right to Sell to Third Party............................ 21
4.5 Reinstatement of Right of First Refusal................. 21
4.6 Change of Control....................................... 21
4.7 Co-Selling Rights....................................... 21
4.8 Adherence by Third Party................................ 21
4.9 Relation to Articles of Association..................... 21


ARTICLE V. Term and Termination....................................... 22
5.1 Term.................................................... 22
5.2 Termination by mutual consent........................... 22
5.3 Expulsion for Breach.................................... 22
5.4 Termination after [****]................................ 26
5.5 Termination in Case of Sale and Transfer................ 26
5.6 Post-Termination Covenants.............................. 26


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ARTICLE VI. Closing Conditions......................................... 27
6.1 Conditions to Obligations of REC........................ 27
6.2 Conditions to the Obligations of E and Q................ 27


ARTICLE VII. Warranties................................................. 27
7.1 Warranties of Q......................................... 27
7.2 Warranties of E......................................... 29
7.3 Warranties of REC....................................... 31
7.4 Additional Representations and Warranties by EVERQ...... 33
7.5 Additional Representations and Warranties by E and Q
pertaining to EverQ..................................... 35


ARTICLE VIII. Liability and Limitations of Liability..................... 36
8.1 Liability............................................... 36
8.2 Definitions............................................. 37
8.3 Determination of the Amount of Damage................... 37
8.4 Limitations of Liability for Breach of Warranties....... 37
8.5 GENERAL LIMITATION OF LIABILITY......................... 38


ARTICLE IX. Additional Agreements...................................... 38
9.1 Marketing............................................... 38
9.2 Q Manufacturing Right of First Refusal.................. 38
9.3 REC Manufacturing Right of First Refusal................ 39
9.4 Relation of Sections 9.2 and 9.3........................ 40
9.5 [****].................................................. 41
9.6 Cooperation to Pursue Tax Efficiencies.................. 42
9.7 Confidentiality......................................... 42
9.8 Reasonable Efforts...................................... 44
9.9 Standstill.............................................. 44
9.10 Employee Matters........................................ 45
9.11 Covenant Regarding REC Services Agreement............... 45


ARTICLE X. Miscellaneous.............................................. 45
10.1 Expenses................................................ 45
10.2 Further Assurances...................................... 46
10.3 Notices................................................. 46
10.4 Governing Law and Dispute Resolution.................... 47
10.5 Binding Effect.......................................... 47
10.6 Assignment.............................................. 48
10.7 No Third Party Beneficiaries............................ 48
10.8 Foreign Corrupt Practices Act........................... 48
10.9 Sarbanes-Oxley and Nasdaq Covenant...................... 48
10.10 Amendment, Waivers...................................... 49
10.11 Entire Agreement........................................ 49
10.12 No Joint Venture or Partnership......................... 49
10.13 Language for Joint Venture and this Agreement........... 49


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10.14 Voting and other rights................................. 49
10.15 Severability............................................ 50


EXHIBITS


Exhibit A Articles of Association Exhibit A-1 German Translation of Articles of Association Exhibit 7.4 (a) EverQ Balance sheet as of September 30, 2005 Exhibit 7.4 (e) List of EverQ personnel and pensions Exhibit 7.4 (f) Material Agreements Exhibit 7.4 (h) EverQ Insurance


SCHEDULES


Schedule 3.4 Second REC Supply Agreement


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MASTER JOINT VENTURE AGREEMENT


This Master Joint Venture Agreement (the "AGREEMENT") is made and entered into as of the 4th day of November, 2005, by and between


Evergreen Solar, Inc., a Delaware corporation with its principal executive offices located at 138 Bartlett Street, Marlboro, Massachusetts, USA ("EVERGREEN" or "E"),


Q-Cells AG, a stock corporation organized under the laws of Germany with its principal executive offices located at Guardianstr. 16, 06766 Thalheim, Germany (,,Q-CELLS" or "Q"),


Renewable Energy Corporation, a stock corporation organized under the laws of Norway with its principal executive offices located at Veritasveien 14, N-1323 Hovik, NORWAY ("REC")


and


EverQ GmbH, a limited liability company organized under the laws of Germany with its principal offices located at Guardianstr. 16, 06766 Thalheim, Germany (,,EVERQ").


Capitalized terms used herein shall have the meaning ascribed to them in SECTION 1.2.


RECITALS


WHEREAS:


The Parties are each engaged in the manufacture and distribution of solar products.


A. Evergreen Solar


Evergreen has unique and proprietary String Ribbon wafer manufacturing
technology which, when fully developed, may have a very low cost potential.
Evergreen has an active research program to continue to develop its
advanced string ribbon technology and, assuming the successful growth of
EverQ, intends to channel its main future growth through EverQ.


B. EverQ


EverQ is a recently created joint venture between Q-Cells and Evergreen to
manufacture String Ribbon wafers, photovoltaic cells and modules
incorporating such wafers based on the combination of their respective
technologies and expertise. Construction of the first 30 MW factory has
started in Thalheim, Germany, which is expected to commence production in
March[****]. Assuming the factory achieves its objectives, Q-Cells and
Evergreen plan on expanding the EverQ joint venture in Thalheim to 120 MW
as soon as practicable, and to look to establish factories in other
locations worldwide.


C. REC


REC is, via its subsidiary Solar Grade Silicon Holding, Inc. with
production at Moses Lake, Washington, USA and Butte, Montana USA ("SGS"),
the world leader in the production of solar grade silicon. REC is currently
performing large scale technology tests with the objective of producing
commercial quantities of the granular form factor of silicon feedstock that
is needed by Evergreen for its wafer manufacturing process. REC is also the
world's largest suppliers of high quality silicon wafers for photovoltaic
applications. At present REC produces silicon wafers through its unique and
proprietary casting and slicing processes.


D. Q-Cells


Q-Cells is the largest independent manufacturer of crystalline silicon
solar cells in the world. Q-Cells is in the midst of a capacity expansion
that will provide them with 350 MW of solar cell manufacturing capacity.
Q-Cells has active programs to increase the efficiency and reduce the cost
to convert wafers into solar cells.


E. Benefits to Parties


The Parties believe that it is in their mutual best interest to have REC
become a shareholder of EverQ and provide additional support via the REC
Supply Agreements and the REC License Agreement, as well as establish a
close collaboration with Evergreen on technology sharing and potentially
String Ribbon wafer production. The Parties further believe that combining
their respective technologies and capabilities would have a number of
benefits including:


(1) REC


(a) Access to String Ribbon wafer technology through EverQ
[****]


(b) Technology transfer/sharing with Evergreen


(c) Equity participation in EverQ


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(d) Secure high value customer for scaling of granular silicon


(e) [****]


(2) Evergreen


(a) Technology transfer/sharing with REC


(b) Secure silicon supply at attractive market related pricing


(c) Accelerated development and proliferation of String Ribbon
technology


(d) Initial substantial majority ownership of EverQ


(3) EverQ


(a) Secure silicon supply at attractive market related pricing


(b) Accelerated String Ribbon technology development (Evergreen
responsibility)


(c) Accelerated technology and manufacturing systems development


(4) Q-Cells


(a) Improved cost position through EverQ


(b) Low-cost supply of String Ribbon wafers


(c) Reduced capital commitment


F. Existing Agreements


On 14 January 2005, E and Q have entered in to the following agreements
regarding EverQ:


(a) Master Joint Venture Agreement (notarial deed nr. 7 / 2005 of the
Berlin notary public Dr. Rudolf von Hanstein) (the "EXISTING MJVA"),


(b) E License Agreement (notarial deed nr. 5 / 2005 of the Berlin
notary public Dr. Rudolf von Hanstein) (the "E LICENSE AGREEMENT"),


(c) Q License Agreement (notarial deed nr. 6 / 2005 of the Berlin
notary public Dr. Rudolf von Hanstein) (the "Q LICENSE AGREEMENT")
(jointly the "EXISTING AGREEMENTS").


The Existing MJVA will be replaced by this Agreement. Certified Copies of
the Existing Agreements have been provided to all Parties who waive reading
and attaching of the Existing Agreements to this Agreement.


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NOW, THEREFORE, in consideration of the mutual promises, covenants, representations, warranties and indemnities made herein and of the mutual benefits to be derived herefrom, and for other good and valuable consideration (the receipt and adequacy of which are hereby acknowledged), the Parties hereto agree as follows:


ARTICLE I.


Relation to Existing Agreements; Interpretation, Relation to Articles,
Participation of EverQ


1.1 Relation to Existing Agreements. The Existing MJVA is hereby replaced by this Agreement as of the Signing Date. The other Existing Agreements have in the meantime been amended by the Parties; such amended versions shall remain in full force and effect.


1.2 Definitions. For the purposes of this Agreement, capitalized terms used herein shall have the respective meanings assigned thereto in this SECTION 1.2.


"ACQUISITION PROPOSAL" has the meaning assigned in SECTION 4.2.


"ACQUISITION PROPOSAL NOTICE" has the meaning assigned in SECTION 4.2.


"ACT" has the meaning assigned in SECTION 10.8.


"ACTION" means any claim, action, suit or arbitration, as well as any inquiry, proceeding or investigation by or before any Governmental Authority.


"ADDITIONAL CAPITAL CONTRIBUTIONS" has the meaning set forth in SECTION 2.3.


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


"AGGREGATE EQUITY FUNDING" means [****], as adjusted to reflect additional capital contributions after the Closing of this Agreement.


[****]


"ALTERNATIVE VENTURE" means a [****]


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[****]


[****]


"ANNUAL PLAN" shall mean an annual business and operations plan as determined by the Supervisory Board.


"ARBITRATOR" has the meaning assigned in SECTION 5.3 (C)(II)(3).


"ARTICLES OF ASSOCIATION" means the Articles of Association (Gesellschaftsvertrag) of EverQ set forth as EXHIBIT A attached hereto (a German translation is attached hereto as EXHIBIT A-1), together with any amendments thereto approved by the Parties. Should there be a discrepancy between the German and the English versions of the Articles, the English version shall prevail and the Parties shall amend the German version of the Articles to reflect the meaning of the English version.


"BANKRUPTCY EVENT" means with regard to any Party:


a) such Party commencing a voluntary case or other proceeding, or an involuntary case or other proceeding being commenced against such Party and remaining undismissed and unstayed for a period of [****], in either case seeking liquidation, reorganization or other relief with respect to such Party or its debts under any applicable bankruptcy, reorganization, composition, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of such Party or any substantial part of its property;


b) such Party consenting to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it; or


c) such Party admitting in writing its inability to pay its debts generally as they become due or generally failing to pay such debts as they become due or becoming subject to disposition of a clearing-house to suspend transactions.


"BREACHING PARTY" has the meaning assigned in SECTION 5.3.


"BUSINESS DAY" means any day on which financial institutions are generally open and available for business, and which is not otherwise a holiday, in all of the German state of Saxony-Anhalt, the US state of Massachusetts and Oslo, Norway.


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"BUSINESS YEAR" means the period of time which, according to EverQ's Articles of Association, or relevant legislation, shall be the annual period used for accounting and public reporting obligations of EverQ.


"CAPACITY EXPANSION" has the meaning assigned in SECTION 3.5 (A).


"CELL" means a crystalline silicon material substrate that has been processed to provide electrical output from incident sunlight.


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


"CLOSING CONDITIONS" has the meaning assigned in SECTION 6.1 AND 6.2.


"CLOSING DATE" means the day on which fulfillment or waiver of all Closing conditions has occurred (and which the Parties agree is the Signing Date).


"CONCURRENT AGREEMENTS" means the Services Agreements, the License Agreements, the REC Supply Agreements and the Evergreen Supply Agreement.


"CONFIDENTIAL INFORMATION" has the meaning assigned in SECTION 9.7.


"DIRECTOR" means a member of the Supervisory Board (Aufsichtsratsmitglied) of EverQ.


"DISCLOSING PARTY" has the meaning assigned in SECTION 9.7(A).


"DISTRIBUTION" means the transfer of cash or other property whether by way of dividend or otherwise to one or more of the Shareholders, or the purchase or redemption of Shares for cash or other property.


"EU" means European Union.


"E FIRST REFUSAL NOTICE" has the meaning assigned in SECTION 9.2(B).


"ELECTION NOTICE" has the meaning assigned in SECTION 4.3.


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"E LICENSE AGREEMENT" has the meaning assigned in the RECITALS (F).


"E SERVICES AGREEMENT" has the meaning assigned in the RECITALS (F).


"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.


"EXISTING AGREEMENTS" has the Meaning assigned in the RECITALS (F).


"EXISTING MJVA" has the Meaning assigned in the RECITALS (F).


"FAIR MARKET PRICE" has the meaning assigned in SECTION 3.5(D).


"FAIR MARKET VALUE" has the meaning assigned in SECTION 5.3(C).


"EVERGREEN SUPPLY AGREEMENT" means a supply agreement between SGS and Evergreen entered into on November 22, 2005


"FIRST REC SUPPLY AGREEMENT" means the supply agreement between SGS and EverQ attached hereto as EXHIBIT C.


"FREE CASH" means, as of any date of determination, the amount of liquid net assets held in cash and other liquid, short-term investment instruments in excess of the amount which is sufficient to fund the operations and investments of EverQ for the following [****] according to EverQ's then-current budget projections.


"GOVERNMENT INVESTMENT GRANT" means GA-grants (GA-Mittel; Mittel aus dem Programm "Gemeinschaftsaufgabe Aufbau Neue Laender")


"GOVERNMENTAL AUTHORITY" means any US, German or Norwegian, federal, national, supranational, state, provincial, municipal, local, or similar government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body.


"GOVERNMENTAL ORDER" means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.


"GRANT IMPUNITY NOTICE" has the meaning assigned in SECTION 3.5 (C)(I).


"IFRS" means International Financial Reporting Standards.


"INDEMNIFIABLE CLAIMS" has the meaning assigned in SECTION 8.2.


"INDEMNIFIED PARTY" has the meaning assigned in SECTION 8.2.


"INDEMNIFYING PARTY" has the meaning assigned in SECTION 8.1.


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"INITIAL CAPACITY" has the meaning assigned in SECTION 3.5(A).


"KNOWLEDGE" shall mean, with respect to a Party, the actual knowledge of its officers and the members of the Board of Directors or Supervisory Board of such Party, provided that such persons shall have made reasonable inquiry of those employees and consultants, as the case may be, whom such officers or members of the Board of Directors or the Supervisory Board reasonably believe would have actual knowledge of the matters represented.


"LAW" means any US, German or Norwegian, federal, national, supranational, state, provincial, municipal, local or similar statute, law, ordinance, regulation, rule, code, order, requirement or rule of law.


"LIABILITIES" means any and all indebtedness or other liabilities and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured or determined or determinable, including those arising under any Law, Action, Governmental Order and those arising under any contract, agreement, arrangement, commitment or undertaking.


"LICENSE AGREEMENTS" means the E License Agreement, the Q License Agreement and the REC License Agreement.


"MANAGEMENT BOARD" shall mean the Management Board of Directors (Geschaeftsfuerung) of EverQ.


"MATERIAL AGREEMENT" means agreements entered into by EverQ with an annual value above Euro 500,000.


"MATERIAL BREACH" has the meaning assigned in SECTION 5.3.


"MODULE" means an assembly of multiple, electrically connected Cells.


"NEGOTIATION PERIOD" has the meaning assigned in SECTION 4.3.


"NON-SELLING PARTIES" has the meaning assigned in SECTION 4.2.


"PARTIES" means the parties to this Agreement, from time to time, and a "PARTY" shall mean either E, Q or REC, as applicable.


"PERCENTAGE INTERESTS" means the percentage interests of the Parties in EverQ.


"PERSON" means any natural person, firm, partnership, association, corporation, company, trust, business trust, governmental authority or other entity.


"Q CONFIRMATION NOTICE" has the meaning assigned in SECTION 9.2(B).


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"Q LICENSE AGREEMENT" means the License & Technology Transfer Agreement between Q and EverQ attached hereto as EXHIBIT C.


"Q PREFERENTIAL OFFER" has the meaning assigned in SECTION 3.5(C).


[****]


"Q SERVICES AGREEMENT" has the meaning assigned in the RECITALS(F)..


"REC LICENSE AGREEMENT" means the License & Technology Transfer Agreement between REC and EverQ attached hereto as EXHIBIT B.


"REC OPTION" has the meaning assigned in SECTION 3.4(B).


"REC OPTION EXERCISE LETTER" has the meaning assigned in SECTION 3.4(B).


"REC OFFER DATE" has the meaning assigned in SECTION 3.4(C).


"REC SUPPLY AGREEMENTS" means the First REC Supply Agreement and the Second REC Supply Agreement.


"RECAPITALIZATION" means any stock dividend, stock split, combination of shares, reorganization, recapitalization, reclassification or other similar event.


"RECEIVING PARTY" has the meaning assigned in SECTION 9.7(A).


[****]


"RIBBON TECHNOLOGY" means a technique in which a thin sheet of silicon, typically polycrystalline silicon, is grown directly from molten silicon. The sheet is generally grown in a vertical orientation without the use of foreign substrate on which the silicon is formed, although some processes grow the silicon in a horizontal direction and can use a substrate on which the silicon is formed.


[****]


"SALE PERIOD" has the meaning assigned in SECTION 4.4.


"SECOND REC SUPPLY AGREEMENT" has the meaning assigned in SECTION 3.4 (A).


"SECURITIES ACT" means the Securities Act of 1934, as amended.


"SELLING PARTY" has the meaning assigned in SECTION 4.2.


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"SERVICES AGREEMENTS" means the E Services Agreement, the Q Services Agreement and the REC Services Agreement. ...