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Evergreen Solar has finalized its agreements with Jiawei Solarchina Co., Ltd., and the Wuhan Government's Hubei Science & Technology Investment Co. Ltd. (HSTIC) to manufacture String Ribbon wafers using its state-of-the-art Quad furnaces at a leased facility being built by Jiawei in Wuhan, China on Jiawei's campus.
Factory construction has begun and the parties expect that wafer, cell and panel production will begin in the spring of 2010.
Jiawei will convert the String Ribbon wafers into Evergreen Solar-branded panels on a contract manufacturing basis. Evergreen Solar will reimburse Jiawei for its cell and panel conversion costs, plus a contract manufacturing fee. The actual price paid to Jiawei will be negotiated annually.
Evergreen Solar will invest US $17 million in cash and equipment in the Wuhan String Ribbon operation. HSTIC will provide Evergreen Solar $33 million of 7.5% financing, which Evergreen Solar must repay no later than July 2014. Initial capacity will be approximately 100 megawatts (MW).
Factory construction has begun and the parties expect that wafer, cell and panel production will begin in the spring of 2010. The parties intend to expand production capacity of their respective manufacturing operations to approximately 500 MW by 2012, the timing and extent of any potential expansion will be determined in 2010.
Evergreen Solar and Dynamic Green Energy Ltd., Jiawei’s parent company, have agreed to exchange warrants representing 1% of their outstanding shares. These warrants will have a five-year term and may be exercised for 20% of the warrant shares for each incremental 95 MW of production capacity achieved.
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