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Exhibit 10.40
  
 ................................2007
 SILICIUM DE PROVENCE SAS
  EVERGREEN SOLAR, INC.
 SUBORDINATED LOAN AGREEMENT
 HERBERT SMITH LLP
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TABLE OF CONTENTS
 Clause
    
    Headings
    
    Page1.
    
    INTERPRETATION
    
    
    32.
    
    LOAN
    
    
    43.
    
    INTEREST AND REDEMPTION
    
    
    44.
    
    EARLY REDEMPTIONS
    
    
    55.
    
    REPRESENTATIONS
    
    
    56.
    
    UNDERTAKINGS
    
    
    57.
    
    SUBORDINATION
    
    
    68.
    
    COSTS
    
    
    69.
    
    PARTIAL PAYMENTS
    
    
    610.
    
    ASSIGNMENT
    
    
    711.
    
    WHOLE AGREEMENT
    
    
    812.
    
    VARIATION AND WAIVER
    
    
    813.
    
    SEVERANCE
    
    
    814.
    
    NOTICES
    
    
    815.
    
    CONFIDENTIALITY
    
    
    916.
    
    APPLICABLE LAW AND LANGUAGE
    
    
    1017.
    
    DISPUTES
    
    
    10
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SUBORDINATED LOAN AGREEMENT
 THIS LOAN AGREEMENT
 BETWEEN:
 (1)
    
    SILICIUM DE PROVENCE S.A.S., a private company with limited liability, incorporated under the
laws of France, whose registered office is situated at Usine de Saint Auban, 04 600 Saint
Auban, France, represented by Mr. Frank Wouters, hereinafter referred to as the Borrower,
and(2)
    
    EVERGREEN SOLAR, INC., a company incorporated in Delaware, U.S.A., with registered number
2426798, whose registered office is situated at 138 Bartlett Street, Marlboro, Massachusetts
01752, U.S.A. represented by Richard Chleboski, hereinafter referred to as the Lender,
 Party Parties
 WHEREAS:
 (A)
    
    The Borrower intends to develop a plant in France for the production of solar grade silicon.(B)
    
    Lender and Borrower have entered into an agreement for the sale and purchase of solar grade
silicon on the same date hereof (the Silicon S&P Agreement).(C)
    
    Lender and Borrower have agreed that in consideration for the Borrower entering into the
Silicon S&P Agreement with the Lender, the Lender shall make available to the Borrower, by way
of a subordinated loan, an amount of thirty million Euros (EUR 30,000,000) (the Loan).(D)
    
    The Parties wish to set out the terms and conditions of the Loan in this agreement (the Loan
Agreement).
 NOW, THEREFORE THE PARTIES AGREE AS FOLLOWS:
 1.
    
    INTERPRETATIONIn this Loan Agreement, unless otherwise specified or the context otherwise requires:1.1
    
    words importing the singular shall include the plural and vice versa;1.2
    
    words importing any gender shall include all other genders;1.3
    
    words importing the whole shall be treated as including reference to any part of the whole;1.4
    
    reference to an Article is to the relevant article of this Loan Agreement;1.5
    
    reference to this Loan Agreement or to any other document is a reference to this Loan
Agreement or to that other document as modified, amended, varied, supplemented or replaced
from time to time;1.6
    
    reference to a provision of law is a reference to that provision as extended, applied,
amended, consolidated or re-enacted or as the application thereof is modified from time to
time and shall be construed as including reference to any order, instrument, regulation or
other subordinate legislation from time to time made under it, except as otherwise provided in
this Loan Agreement;
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1.7
    
    all references to the words include and including shall be construed without limitation;1.8
    
    a reference to writing or written includes faxes and e-mail;1.9
    
    headings used in this Loan Agreement shall not affect its construction or interpretation;1.10
    
    words and phrases defined in any part of this Loan Agreement bear the same meanings
throughout this Agreement;1.11
    
    wherever in this Loan Agreement provision is made for the giving of notice, consent or
approval by any person, unless otherwise stated, such shall not be unreasonably withheld. Any
notice, consent or approval shall be in writing and the word notify shall be construed
accordingly. All notices shall be served on the Parties designated representative at the
registered address of the Party or other address that a Party may notify the other Party of
from time to time.2.
    
    LOAN2.1
    
    The Lender grants the Borrower a loan of a total principal amount of thirty million Euros
(EUR 30,000,000) to be disbursed to the Borrower in two instalments, as follows:
 2.1.1
    
    A first instalment of fifteen million Euros (EUR 15,000,000) to be paid no
later than 30 November 2007; and2.1.2
    
    A second instalment of fifteen million Euros (EUR 15,000,000) to be paid no
later than 31 January 2008.
 2.2
    
    The actual disbursement date of the last instalment of the Loan to the Borrower shall be the
Effective Date.2.3
    
    The Loan is to be paid by the Lender into the Borrowers account in immediately available
cleared funds as follows:Bank: ING Belgium S.A., Succursale en FranceBranch: Immeuble Les Caryatides, 24/26 boulevard Carnot, 59042 Lille cedexAccount Number: 30438IBAN number: FR76 3043 8000 0836 8300 3000 905BIC Number: INGBFRPPCode Guichet: 00008Nodu Compte: 36830 03 0009 Cle RIB : 05or to such other bank account as may be nominated from time to time by the Borrower to the
Lender pursuant to Article 14.2.4
    
    The Loan shall be used by the Borrower solely to finance the works arising out of and
relating to the construction of the Borrowers plant (the Works). For the avoidance of
doubt, the Loan shall not be used to increase management remuneration, for the repayment of
any indebtedness for borrowed money or for any capital distribution to the Borrowers equity
holders.3.
    
    INTEREST AND REPAYMENT3.1
    
    The Borrower shall, from the Effective Date, pay interest in arrears to the Lender on the
Loan outstanding from time to time, such interest calculated at a rate of three percent (3%)
per Calendar Year compounded annually on the actual outstanding amount of the Loan plus any
accrued interest and any other amounts due hereunder; provided that upon a failure to repay a
part of the Loan when due or any other default by Borrower set forth in
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Clause 18 under this Loan Agreement, the foregoing rate shall increase to an amount equal to (a) the
twelve-month EURIBOR rate determined on the business day preceding the default as reported in the Wall
Street Journal, plus (b) three (3%) on the unpaid amount only. Calendar Year means the period of 365
or 366 days, as the case may be, beginning on 1st January and ending on 31st December.3.2
    
    Interest shall be calculated on the basis of the actual number of days elapsed.3.3
    
    The Borrower shall repay the Loan and interest and accrued hereunder, on the date falling
five (5) years after the Effective Date (the Repayment Date), save that the Borrower may
prepay all or part of the Loan in accordance with Article 4 and provided that in the event
that the Lender terminates the Silicon S&P Agreement pursuant to Article 11.1 thereof, the
Repayment Date shall be the effective date of such termination.3.4
    
    The interest due on the outstanding amount of the Loan (first and second instalments) shall
be payable in whole on the Repayment Date.3.5
    
    For the purposes of Articles L.313-1 et seq., R.313-1 and R.313-2 of the French Code de la
Consommation, the Lender hereby informs the Borrower that the all-in rate (taux effectif
global) of the Loan is three percent (3%).3.6
    
    All payments made by the Borrower to the Lender shall be in Euros in immediately available
cleared funds by electronic transfer to an account held by Silicon Valley Bank, account number
[], swift code [], for the credit of [].4.
    
    EARLY REPAYMENT4.1
    
    The Borrower shall at all times be allowed to prepay the Loan in whole or in part, without
premium or penalty, provided it does so in whole multiples of EUR 100,000 and that ten (10)
days prior written notice has been delivered to the Lender.4.2
    
    Notwithstanding the provisions of Clause 3.4, any early redemption under this Agreement shall
include accrued interest on the amount prepaid.5.
    
    REPRESENTATIONSExcept as otherwise stated below, each of the Lender and the Borrower hereby represents and
warrants that:
 (A)
    
    It is a company duly incorporated and validly existing under the laws of its
jurisdiction of incorporation;(B)
    
    The obligations expressed to be assumed by it are valid and binding
obligations;(C)
    
    The entry into and performance by it of this Loan Agreement do not and will
not conflict with (a) any provision of any law or regulation applicable to it, (b) its
constitutional documents, and (c) any agreement which is binding upon it or any of its
assets; and(D)
    
    It has the power to enter into, perform and deliver this Loan Agreement and
the transactions contemplated therein.
 6.
    
    UNDERTAKINGSExcept as otherwise stated below, each of the Lender and the Borrower hereby undertakes:
 (A)
    
    To do all such things as are necessary to maintain its corporate existence;
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(B)
    
    To obtain, maintain and comply with the terms of any authorisation required
under any applicable law or regulation to (i) enable it to carry out its activities
and (ii) perform its obligations under this Loan Agreement; and(C)
    
    To comply with all applicable laws and regulations.
 7.
    
    SUBORDINATION7.1
    
    In the event that insolvency proceedings are initiated against the Borrower or that it is
unable to pay its debts as they fall due or in the event of any moratorium on its debts or if
the Borrower has proposed any composition, assignment or arrangement to its creditors, the
obligation to repay the outstanding amount of the Loan:
 7.1.1
    
    shall be subordinated to any indebtedness of the Borrower to any lending or
financial institution in any way related to the Works, both present and future
notwithstanding whether such indebtedness is recoverable by process of law or is
conditional or unconditional (Financial Loans);7.1.2
    
    shall rank pari passuwith the rights of (i) any other lender under other
loans similar to the Loan, entered into (or to be entered into) between the Borrower
and any other silicon processor or photovoltaic items manufacturer (Manufacturer
Loans), and (ii) the Borrowers shareholders under shareholders loans entered into
(or to be entered into) between the Borrower and any of its shareholders
(Shareholders Loans).
 7.2
    
    The Borrower undertakes not to grant any security interest of any kind in respect of any
Manufacturer Loan or Shareholders Loan unless the Loan benefits from similar security of the
same rank.7.3
    
    The Lender undertakes, and acknowledges that it is a condition of this Loan Agreement, that
it shall not grant any mortgage, charge, pledge, lien or other security interest of any kind
or arrangement that would adversely effect the rights of the Borrower under this Loan
Agreement, whether to its creditors or any other third party. Without prejudice to the
foregoing, the Borrower acknowledges and accepts that the assets of the Lender, including
without limitation Lenders rights under this Loan Agreement, are currently and are expected
to continue to be subject to liens in favour of Lenders creditors.7.4
    
    The Lender undertakes that, on the written request of the Borrower, the Lender shall
cooperate with the Borrower and any creditor providing a Financial Loan, Manufacturer Loan or
Shareholders Loan to the Borrower, by entering, in a timely manner, into such inter-creditor
agreement as may reasonably be necessary and customary for the implementation of Articles 7.1
and 7.2 above.8.
    
    COSTSThe Lender and the Borrower shall each pay their own respective costs, taxes and fees in
connection with the implementation of this Loan Agreement.9.
    
    PARTIAL PAYMENTSIf the Lender receives a payment that is insufficient to discharge all the amounts then due
and payable by the Borrower under this Loan Agreement, the Lender shall apply that payment
towards the obligations of the Borrower in the following order:
 (A)
    
    in or towards payment of any unpaid fees, costs and expenses;(B)
    
    in or towards payment of accrued interest; and
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(C)
    
    in or towards payment of any principal due but unpaid under this Loan
Agreement.
 10.
    
    ASSIGNMENT10.1
    
    Subject to (A)  (D) below and 10.2 neither Party may, or may purport to, assign, transfer,
mortgage, charge, pledge or otherwise encumber all or any portion of its rights, interests or
obligations arising under this Loan Agreement without the prior written consent of the other
Party, except that:
 (A)
    
    The Borrower may freely assign, transfer, mortgage, charge, pledge or
otherwise encumber all or any portion of its rights and obligations under this Loan
Agreement (or any document or legal instrument referred to in this Loan Agreement),
(i) to any shareholder of the Borrower or Affiliate of such shareholder or (ii) to any
Creditor.For the purposes of this Article 12(A), Affiliate means in relation to any person,
any other person that, directly or indirectly, controls or is controlled by or is
under the same control as such person and the term control shall mean the ability
to exercise, or to promote the exercise, directly or indirectly, of at least 50% of
the voting rights attached to a persons equity interests or shares.Creditor(s) means any bank, special purpose project company, trust company,
mortgage company, insurance company, pension fund, real estate investment trust, or
other lending or financial institutions (including indirect lenders and loan
participants) providing debt, equity, lease and/or bond financing or financial
services, or credit support or other credit enhancement in any way related to the
construction of the Works(B)
    
    If the Borrower does not obtain the Lenders prior written consent to any
such assignment, transfer, mortgage, charge, pledge or other encumbrance under
sub-clause (A) above the Borrower shall not be released from any obligation hereunder
unless and until Borrower provides an unconditional repayment guarantee to Lender in a
form acceptable to Lender in its sole discretion.(C)
    
    If the Borrower obtains the Lenders prior written consent to any such
assignment, transfer, mortgage, charge, pledge or other encumbrance under sub-clause
(A) above assignment the Borrower shall not have to provide a repayment guarantee to
Lender and the Borrower shall be released from any obligation hereunder upon the
execution of an assignment and assumption agreement whereby Borrower assigns all of
its rights to the assignee and the assignee assumes all of the obligations of Borrower
under this Loan Agreement.(D)
    
    Successive assignments of Borrowers rights under this Loan Agreement shall
remain subject to this Article 10.1 provided that Silicium de Provence S.A.S. shall
not be released from a guarantee provided in satisfaction of its obligations under
this Article 10.1 as a result of an assignment that occurs after the initial
assignment by the Borrower unless the Lenders consent is obtained in which case the
Borrower shall be released and item (C) above shall apply.
 10.2
    
    The Lender may assign or transfer this Loan Agreement without the consent of the Borrower in
the event of a change of control of the Lender or the sale of all or substantially all the
assets of the Lender to which this Loan Agreement relates.
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10.3
    
    Any assignment, transfer, mortgage, charge, pledge or other giving of security by one Party
hereunder shall not in any way diminish the other Partys rights and obligations or the giving
Parties successors rights and obligations under this Loan Agreement, including any amendments
hereto10.4
    
    On the written request of the Borrower, the Lender shall cooperate with the Borrower and any
Creditors, by entering, in a timely manner, into such direct agreements as may reasonably be
necessary and customary for project financing of the Works. Such agreements may include
provisions which permit the Creditors, in the event of a breach of the Loan Agreement or the
Silicon S&P Agreement that would permit the Lender to terminate the Loan Agreement, to:
 (i)
    
    Take-over the Loan Agreement;(ii)
    
    step-in, rectify or otherwise cure any breach of this Loan
Agreement;(iii)
    
    assign or otherwise transfer this Loan Agreement.
 11.
    
    WHOLE AGREEMENTThis Loan Agreement constitutes the entire agreement of the Parties with respect to the
subject matter hereof and, except as herein stated and in the instruments and documents to
be executed and delivered pursuant hereto, contains all of the representations,
undertakings and agreements of the Parties. This Loan Agreement supersedes all prior
meetings, correspondence, and negotiations between the Parties. There are no
representations, warranties, covenants, agreements, or collateral understandings, oral or
otherwise, expressed or implied, of any kind between the Parties hereto, respecting the
subject matter hereof, except as contained or referred herein, and neither Party has relied
on any statement outside of the written agreement.12.
    
    VARIATION AND WAIVER12.1
    
    Any variation of this Loan Agreement must be in writing and signed by or on behalf of all
Parties.12.2
    
    A waiver of any right under this Loan Agreement is only effective if it is in writing and it
applies only to the Party to which the waiver is addressed and the circumstances for which it
is given.13.
    
    SEVERANCEIf any provision of this Loan Agreement (or part of a provision) appears to be invalid,
unenforceable, illegal, or non-binding the other provisions will remain in force. The
Parties are obliged to replace the invalid, unenforceable, illegal, or non-binding
provision of this Loan Agreement (or part of a provision) with other provisions that are
valid, enforceable, legal and binding, in such way that the new provisions differ as little
as possible from the original provisions, taking into account the object, purpose and
contents of this Loan Agreement.14.
    
    NOTICES14.1
    
    Any notice or other communication required to be given under this Loan Agreement shall be in
writing and shall be delivered to the Party required to receive the notice or communication at
its address as set out below:BorrowerUsine de Saint Auban,
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04 600 Saint Auban, France.Attention: Frank Wouters, CEOLender138 Bartlett StreetMarlboro, Massachusetts, 01752 U.S.A.Attention: Richard Chleboski, Vice Presidentor at such other address as the relevant Party may specify by notice in writing to the
other Parties.Any notice or other communication sent by e-mail or facsimile must be confirmed by
commercial courier.14.2
    
    Any notice or other communication shall be deemed to have been duly given:
 (A)
    
    if delivered personally, when left at the address referred to in Article
14.1; or(B)
    
    if delivered by commercial courier, on the date of signature of the couriers
receipt; or(C)
    
    if sent by fax, at the time of transmission; or(D)
    
    if sent by e-mail, at the time of despatch;(E)
    
    if deemed receipt under the previous paragraphs of this Article 16.2 is not
within business hours (meaning 9.00 am to 5.30 pm Monday to Friday on a day that is
not a public holiday in the place of receipt), when business next starts in the place
of receipt.
 15.
    
    CONFIDENTIALITY15.1
    
    Each Party undertakes that it shall not at any time during this Loan Agreement, and for a
period of 5 (five) years after termination of this Loan Agreement, disclose to any person any
Confidential Information.15.2
    
    For the purpose of this Article 15, Confidential Information means any knowledge, financial
data or operating data, trade secrets, experience or know-how, and information of all kinds in
whatever form about technologies, finances and costs, marketing and business (including but
not limited to term sheets, notes, analyses, agreements, compilations, studies and
interpretations) and suchlike which is disclosed by or on behalf of the disclosing Party
whether or not the same is marked as Confidential Information including any Confidential
Information that is communicated to the receiving Party orally and not reduced in writing.
Confidential Information shall exclude any information that:
 i.
    
    is or becomes (through no improper action or inaction by the
receiving Party or any affiliate, agent, consultant or employee) generally
available to the public, orii.
    
    was in its possession or known by it prior to receipt from
the disclosing Party, provided the receiving Party complies with restrictions
imposed thereon by third parties, oriii.
    
    was rightfully disclosed to it by a third party provided the
receiving Party complies with restrictions imposed thereon by third parties ,
oriv.
    
    was independently developed without use of any Confidential
Information of the disclosing Party
 15.3
    
    Each Party may disclose the other Partys Confidential Information:
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15.3.1
    
    to its employees, officers, representatives or advisers who need to know such
information for the purposes of carrying out the Partys obligations under this Loan
Agreement. Each Party shall ensure that its employees, officers, representatives or
advisers to whom it discloses the other Partys confidential information comply with
this Article 15; and15.3.2
    
    as may be required by law, court order or any governmental or regulatory authority.
 15.4
    
    No Party shall use any other Partys confidential information for any purpose other than to
perform its obligations under this Loan Agreement.16.
    
    APPLICABLE LAW AND LANGUAGE16.1
    
    This Agreement shall be governed by and construed in accordance with French law.16.2
    
    The language of this Agreement and all correspondence, notices and written communications
shall be English.17.
    
    DISPUTES17.1
    
    If any dispute arises out of or in connection with this Loan Agreement, directors or other
senior representatives of the Parties with authority to settle the dispute will, within ten
(10) days of a written request from one Party to the other, meet in a good faith effort to
resolve the dispute.17.2
    
    All disputes arising out of or in connection with this Loan Agreement which are not resolved
pursuant to Article 17.1, shall be finally settled under the Rules of Arbitration of the
International Chamber of Commerce by three arbitrators appointed in accordance with the said
Rules. The arbitration shall be conducted in English and the seat shall be Paris.18.
    
    EVENTS OF DEFAULT.The following events shall be considered events of default with respect to this Loan
Agreement:
 18.1.1
    
    The Borrower shall default in the payment of any part of the principal or unpaid
accrued interest on the Loan [for more than [thirty (30)] days] after the same shall
become due and payable, whether at maturity or at a date fixed for prepayment or by
acceleration or otherwise;18.1.2
    
    The Borrower is unable or admits its inability to pay its debts as they fall due,
by reason of actual or anticipated financial difficulties or suspends making payments
on any of its debts or commences negotiations with one or more of its creditors with a
view to rescheduling any of its indebtedness;18.1.3
    
    The Borrower is in a state of suspension of payments (cessation des paiements)
within the meaning of article L. 631-1 of the French Commercial Code;18.1.4
    
    Any corporate action, legal proceedings or other procedures or steps are taken by
reason of the Borrowers financial difficulties, in relation to:
 (A)
    
    The suspension of payments, a moratorium of any
indebtedness, winding-up, dissolution administration or reorganisation (other
than a solvent winding-up, dissolution or reorganisation carried out with the
prior written consent of the Lender, such consent not to be unreasonably
withheld or delayed) of the Borrower;(B)
    
    A composition, compromise, assignment or arrangement with
any creditor of the Borrower;
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(C)
    
    The appointment of a liquidator, receiver, administrator,
administrative receiver, compulsory manager or other similar officer in
respect of the Borrower or any of its assets;
 Or any analogous procedure or step is taken in any jurisdiction.18.1.5
    
    The Borrower commences proceedings for conciliationin accordance with articles L.
611-4 to L. 611-15 of the French Commercial Code or any analogous procedure or step is
taken in any jurisdiction;18.1.6
    
    A judgment for sauvegarde, redressement judiciaireor liquidation judiciaireis
entered in relation to the Borrower under articles L. 620-1 to L. 644-6 of the French
Commercial Code or any analogous judgment is entered in any jurisdiction;18.1.7
    
    The Borrower shall fail to observe or perform any other obligation to be observed or
performed by it under this Loan Agreement within thirty (30) days after written notice
from the Lender to perform or observe the obligation; and18.1.8
    
    The Borrower stops construction of the Works or acknowledges that it will be unable
or is unwilling to complete construction of the works.
 19.
    
    REMEDIES.Upon the occurrence of an event of default under Article 18.1 hereof, at the
option and upon the declaration of the Lender, the entire unpaid principal and accrued and
unpaid interest on the Loan shall without formal notice of default (mise en demeure) or any
other judicial or extra-judicial step,, be forthwith due and payable, and the Lender may,
immediately and without expiration of any period of grace, enforce payment of all amounts due
and owing under this Loan Agreement and exercise any and all other remedies granted to it.
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20.
    
    EXPENSES.If any action is necessary to enforce or interpret the terms of this Loan
Agreement, the prevailing Party shall be entitled to reasonable attorneys fees, costs and
necessary disbursements in addition to any other relief to which such Party may be
entitled.21.
    
    FURTHER ASSURANCE.From time to time, the Borrower shall execute and deliver to the Lender
such additional documents and shall provide such additional information to the Lender as the
Lender may reasonably require to carry out the terms of this Loan Agreement.22.
    
    INDEMNITY; COSTS, EXPENSES AND ATTORNEYS FEES.22.1
    
    Subject to Article 22.2 the Borrower shall indemnify and hold the Lender harmless from any
reasonable loss, cost, liability and legal or other expense, including reasonable attorneys
fees of the Lenders counsel, which the Lender may directly or indirectly suffer or incur by
reason of the failure of the Borrower to perform any of its obligations under this Loan
Agreement or exercise of remedies (collectively, Costs), provided, however, the indemnity
agreement contained in this Article shall not apply to liabilities which the Lender may
directly or indirectly suffer or incur by reason of the Lenders own negligence or misconduct.22.2
    
    Notwithstanding any other provision of this Agreement no Party shall be liable to the other
Party for loss of profit, loss of any contract or for any other consequential loss or damage
which may be suffered by the other Party in connection with this Agreement.
 IN WITNESS
  /s/ Frank WoutersSIGNEDby
    
    Frank Woutersfor and on behalf ofSILICIUM DE PROVENCE S.A.S/s/ Richard G. ChleboskiSIGNEDby
    
    Richard G. Chleboskifor and on behalf ofEVERGREEN SOLAR, INC.
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