Document:

Form of Secured Debtor-in-Possession Loan Agreement

 Exhibit 10.1 
 SECURED DEBTOR-IN-POSSESSION LOAN AGREEMENT 
 by and among 
 Distributed Energy Systems Corp. and 
 Northern Power Systems, Inc. 
 as Borrowers, 
 Proton Energy Systems, Inc., Technology Drive, LLC, Northern Power Systems Commercial Condominium Owners Association, DESC WTE Energy LLC and NP Canada, Inc. 
 as Guarantors 
 and 

Perseus Partners VII, L.P., 
 as
Lender 
 June [    ], 2008, 
  

 Table of Contents 
  

					
	 	  	Page
	ARTICLE I — AMOUNT AND TERMS OF CREDIT	  	2
	 Section 1.1
	  	DIP Facility	  	2
	 Section 1.2
	  	Closing.	  	6
	 Section 1.3
	  	Use of Proceeds	  	6
		
	ARTICLE II — CONDITIONS TO THE LOANS	  	7
	 Section 2.1
	  	Conditions to the Advance of First Loan	  	7
	 Section 2.2
	  	Conditions to the Making of Subsequent Loans	  	8
		
	ARTICLE III — REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES	  	10
	 Section 3.1
	  	Organization and Good Standing	  	10
	 Section 3.2
	  	Subsidiaries	  	10
	 Section 3.3
	  	Power, Authorization and Validity.	  	11
	 Section 3.4
	  	Noncontravention	  	11
	 Section 3.5
	  	Consents, Etc.	  	11
	 Section 3.6
	  	Capitalization	  	11
	 Section 3.7
	  	SEC Documents; Financial Information	  	12
	 Section 3.8
	  	Financial Reporting	  	12
	 Section 3.9
	  	Liabilities	  	13
	 Section 3.10
	  	Judgments	  	13
	 Section 3.11
	  	Proprietary Assets	  	13
	 Section 3.12
	  	Changes	  	15
	 Section 3.13
	  	Compliance with Company Instruments and Laws	  	16
	 Section 3.14
	  	Litigation	  	16
	 Section 3.15
	  	Taxes	  	16
	 Section 3.16
	  	Environmental and Safety Laws	  	17
	 Section 3.17
	  	Title to and Sufficiency and Condition of Assets	  	17
	 Section 3.18
	  	Indebtedness and Existing Liens	  	18
	 Section 3.19
	  	Insurance	  	18
	 Section 3.20
	  	Priority of Security Interest.	  	18
	 Section 3.21
	  	Prepetition Obligations	  	18
	 Section 3.22
	  	No Brokers	  	18
	 Section 3.23
	  	Defaults	  	18
	 Section 3.24
	  	Real Estate	  	18
	 Section 3.25
	  	Full Disclosure	  	19
		
	ARTICLE IV — REPRESENTATIONS AND WARRANTIES BY THE LENDER	  	19
	 Section 4.1
	  	Authority	  	19
	 Section 4.2
	  	Noncontravention	  	19
		
	ARTICLE V — COVENANTS	  	20
	 Section 5.1
	  	Access	  	20
	 Section 5.2
	  	Communication with Accountants	  	20
	 Section 5.3
	  	Security and Pledge Agreements	  	20
	 Section 5.4
	  	Market Regulations	  	20

  

 - i - 

					
	 	  	Page
	 Section 5.5
	  	Reporting Requirements	  	20
	 Section 5.6
	  	Information	  	20
	 Section 5.7
	  	Payment of Obligations	  	21
	 Section 5.8
	  	Insurance	  	21
	 Section 5.9
	  	Properties	  	21
	 Section 5.10
	  	Fundamental Changes	  	21
	 Section 5.11
	  	Preservation of Corporate Existence	  	22
	 Section 5.12
	  	Compliance with Law	  	22
	 Section 5.13
	  	Termination of Covenants	  	23
	 Section 5.14
	  	Asset Sales	  	23
		
	 ARTICLE VI — EVENTS OF DEFAULT
	  	23
	 Section 6.1
	  	Events of Default	  	23
	 Section 6.2
	  	Remedies	  	24
		
	 ARTICLE VII — INDEMNIFICATION
	  	25
	 Section 7.1
	  	Indemnity	  	25
	 Section 7.2
	  	Procedures	  	25
		
	 ARTICLE VIII — MISCELLANEOUS
	  	27
	 Section 8.1
	  	Waivers and Amendments	  	27
	 Section 8.2
	  	Governing Law	  	27
	 Section 8.3
	  	Exclusive Jurisdiction	  	27
	 Section 8.4
	  	Jury Waiver	  	27
	 Section 8.5
	  	Entire Agreement	  	27
	 Section 8.6
	  	Fees and Expenses	  	27
	 Section 8.7
	  	Notices	  	28
	 Section 8.8
	  	Validity	  	29
	 Section 8.9
	  	Counterparts	  	29
	 Section 8.10
	  	Publicity.	  	29
	 Section 8.11
	  	Succession and Assignment	  	30
	 Section 8.12
	  	Termination	  	30
	 Section 8.13
	  	Further Assurances	  	30
	 Section 8.14
	  	No Strict Construction	  	30

  

			
	SCHEDULES	  	
		
	 Schedule I
	  	List of Defined Terms
		
	 Schedule II
	  	List of Promissory Notes Issued
		
	 Schedule 1.1(b)
	  	Borrowers Wiring Instructions
		
	 Schedule 1.1(e)
	  	Lender’s Wiring Instructions
		
	 Schedule 3.18
	  	Existing Indebtedness and Liens

  

 - ii - 

			
	EXHIBITS
		
	 EXHIBIT A
	  	Form of Notice of Borrowing
		
	 EXHIBIT B
	  	Form of Secured Promissory Note
		
	 EXHIBIT C
	  	Form of Postpetition Security and Pledge Agreement
		
	 EXHIBIT D
	  	Form of Interim Order
		
	 EXHIBIT E
	  	Form of Budget

  

 - iii - 

 SECURED DEBTOR-IN-POSSESSION LOAN AGREEMENT 
 SECURED DEBTOR-IN-POSSESSION LOAN AGREEMENT (this “Agreement”), dated as of June [    ], 2008, by and
among Distributed Energy Systems Corp., a Delaware corporation (“DESC”), and Northern Power Systems, Inc., a Delaware corporation (“Northern,” and together with DESC, the “Borrowers,” and each
individually, a “Borrower”), each Borrower being a debtor and debtor-in-possession in a case pending under Chapter 11 of the Bankruptcy Code (the “Chapter 11 Cases”); Proton Energy Systems, Inc., a Delaware
corporation (“Proton”), Technology Drive, LLC, a Connecticut limited liability company (“Tech LLC”), Northern Power Systems Commercial Condominium Owners Association, a Vermont condominium association
(“NPSCCOA”), DESC WTE Energy LLC, a Delaware limited liability company (“DESC WTE”), and NP Canada, Inc., a Canadian corporation (“NP Canada,” and together with Proton, Tech LLC, NPSCCOA and DESC
WTE, the “Guarantors,” and each individually, a “Guarantor”); and Perseus Partners VII, L.P., a Delaware limited partnership (the “Lender”). Each Borrower and each Guarantor are sometimes referred
to in this Agreement, individually as a “Loan Party” and, collectively, as the “Loan Parties.” Each Borrower, each Guarantor and the Lender are sometimes referred to in this Agreement, individually, as a
“Party” and, collectively, as the “Parties.” Certain capitalized terms used in this Agreement are defined in Schedule I hereto. 
 RECITALS 
 A. DESC and the Lender are parties to a Securities Purchase Agreement, dated as of
May 10, 2007, and amended as of March 13, 2008 (the “SPA”), pursuant to which, as of the date hereof, the Lender has purchased or otherwise been issued senior secured convertible promissory notes with an aggregate
principal amount of $17,666,210.39 (the “Promissory Notes”). 
 B. Northern, Proton and Tech LLC are guarantors of
DESC’s obligations owed to the Lender, including all principal of and interest on the Promissory Notes and all amounts payable under the SPA and the other Prepetition Loan Documents (the “Prepetition Obligations”) and each is a
party to a Subsidiary Security and Pledge Agreement with the Lender, dated as of May 10, 2007, and amended as of March 13, 2008 (the “Subsidiary Security Agreement”), and a Guaranty, dated as of May 10, 2007 (the
“Prepetition Guaranty”). 
 C. On June 4, 2008 (the “Petition Date”), each of the Borrowers filed a
voluntary petition with the Bankruptcy Court commencing the Chapter 11 Cases and subsequent to such filing, each Borrower has continued in the possession of its assets and in the management of its business pursuant to Sections 1107(a) and 1108 of
the Bankruptcy Code. 
 D. The Borrowers have requested, and the Lender has agreed to provide, a secured debtor-in-possession credit facility
in the aggregate principal amount not to exceed $2,000,000 in the aggregate (the “DIP Facility”) to provide the Borrowers with funds to assist each Borrower in meeting its working capital requirements and other expenses set forth in
the Budget, to the extent that Cash Collateral and other cash assets of the Borrowers are insufficient to pay such expenses during the pendency of the Chapter 11 Cases and prior to an Event of Default. 
 E. To secure all obligations under the DIP Facility, the Borrowers will provide to the Lender, pursuant to Sections 364(c) and 364(d) of the Bankruptcy
Code, valid, perfected and enforceable Liens as provided for herein senior in priority to all Liens on such property other than Permitted Liens (the “Postpetition Security Interest”). 
  

 F. The Guarantors have agreed to guarantee the Postpetition Debt of the Borrowers and to provide to the
Lender valid, perfected and enforceable Liens as provided for herein senior in priority to all Liens on such property other than the Permitted Liens. 
 AGREEMENT 
 NOW, THEREFORE, in consideration of the foregoing, and the representations,
warranties, covenants and conditions set forth below, the Parties, intending to be legally bound by this Agreement, agree as follows: 
 ARTICLE I — AMOUNT AND TERMS OF CREDIT 
 Section 1.1 DIP Facility. 
 (a) Commitment. On the terms and subject to the conditions hereof, the Lender agrees to make term loans (collectively, the
“Loans,” and each individually, a “Loan”) to the Borrowers with the aggregate principal amount of all Loans not to exceed $2,000,000, in four equal installments of $500,000 on each of
June 20, June 27, July 7 and July 11, 2008 (each, a “Borrowing Date”), each of which may be modified only with the express written consent of the Lender. The Lender’s commitment to make the Loans
shall expire on the earlier to occur of (i) the Termination Date and (ii) the close of business on August 1, 2008. 
 (b)
Borrowing Procedure. 
 (i) Upon delivery of a notice of borrowing, substantially in the form attached as Exhibit A (a
“Notice of Borrowing”) to the Lender at least three Business Days in advance of the Borrowing Date and in reliance upon the respective representations, warranties and covenants of the Parties contained in this Agreement, and subject
to satisfaction of the applicable conditions set forth in Article II of this Agreement, the Lender shall make available to the Borrowers by wire transfer of immediately available funds to the account designated by the Borrowers on
Schedule 1.1(b) of this Agreement. Each such Notice of Borrowing shall be irrevocable and shall be appropriately completed to specify the aggregate principal amount of the Loan to be incurred. 
 (ii) The Loans shall be evidenced by the Secured Promissory Note, substantially in the form of Exhibit B (the “Secured Promissory
Note”). Each Loan shall bear interest in accordance with the appropriate provisions of this Agreement and be governed by the terms and conditions of this Agreement and the Secured Promissory Note. 
 (iii) The Secured Promissory Note and each Loan evidenced by it shall be the legal, valid and binding, joint and several obligation of the Borrowers and
shall be enforceable against each Borrower in accordance with its terms. If the Secured Promissory Note is mutilated, lost, stolen or destroyed, then (i) upon receipt by the Borrowers of evidence reasonably satisfactory to them of the ownership
of and the mutilation, loss, theft or destruction of the Secured Promissory Note and (ii)(A) in the case of loss, theft or destruction, receipt of indemnity reasonably satisfactory to it, or (B) in the case of mutilation, upon surrender and

  

 - 2 - 

 
cancellation thereof, the Borrowers shall issue a new Secured Promissory Note of the same date, maturity and denomination as the Secured Promissory Note so
mutilated, lost, stolen or destroyed, together with an officer’s certificate of each Borrower certifying and warranting as to the due authorization, execution and delivery of such new Secured Promissory Note. 
 (c) Joint and Several Obligation. Each Borrower shall be jointly and severally liable for the repayment, in cash, of the aggregate outstanding
principal amount of each Loan on its respective Maturity Date together with interest as set forth in Section 1.1(f), and all other Postpetition Debt. 
 (d) Prepayments. At any time, the Borrowers shall have the right to prepay the Loans and any interest and other Postpetition Debt then outstanding, as a whole and not in part, without premium or penalty;
provided, however, that the Borrowers shall notify the Lender in writing of such prepayment of the Loans, not later than noon, Washington, D.C. time, two Business Days before the date of such prepayment and shall specify the date that
such prepayment will be made and the amount of such prepayment. Amounts prepaid may not be reborrowed. 
 (e) Payments. Upon the
maturity (whether by acceleration or otherwise) of any of the Postpetition Debt under this Agreement or any of the other Postpetition Loan Documents, the Lender shall be entitled to immediate payment of such Postpetition Debt without further
application to or order of the Bankruptcy Court. The Borrowers shall make each payment required to be made under this Agreement prior to 5:00 p.m., Washington, D.C. time to the account designated by the Lender on Schedule 1.1(e) of this
Agreement. If any payment under this Agreement is due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be
payable for the period of such extension. All payments shall be made in the form of immediately available funds. 
 (f) Interest.
Each Loan shall bear interest at the rate of 16.5% per annum. If any principal of or interest on any Loan or other Postpetition Debt under this Agreement is not paid when due, whether at the Maturity Date, upon acceleration or otherwise, such
overdue amount shall bear interest for the period after the due date, after as well as before judgment, at the rate of 20% per annum. All interest shall be computed on the basis of a year consisting of 365 days and shall be calculated based on
the daily weighted average principal amount outstanding for such period. Interest shall be payable (and if not paid when due, shall be compounded) monthly in arrears on the last Business Day of each month after the issuance date of the Secured
Promissory Note. 
 (g) Priority and Liens. 
 (i) The Lender’s Liens on the Postpetition Collateral shall be senior in priority to all other Liens on such collateral, other than Permitted Liens, subject only to the Carve-Out Expenses. The Lender and the
Borrowers acknowledge and agree that the priority set forth in the preceding sentence shall be applicable irrespective of (A) anything to the contrary contained in any other document, filing or agreement related to the creation, attachment,
perfection or existence of any security interest, (B) the time, place, order or method of attachment or perfection of any security interest, (C) the time or order of filing or recording of financing statements, deeds of trust or other
documents, filed or recorded to perfect security interests or (D) any statutes, rules of law, or judicial interpretations to the contrary. 
  

 - 3 - 

 (ii) All Postpetition Debt shall constitute an allowed administrative expense of the Borrowers in the
Chapter 11 Cases. Such administrative expense shall have Superpriority, subject only to the Carve-Out Expenses and shall at all times be senior to the rights of the Borrowers, the Borrowers’ estates, and any successor trustee or estate
representative in the Chapter 11 Cases or any subsequent proceeding or case under the Bankruptcy Code. 
 (iii) Subject to entry of the
Final Order, the Borrowers irrevocably waive any right they may have to surcharge any of the Lender’s collateral including Postpetition Collateral, pursuant to Section 506(c) of the Bankruptcy Code or otherwise. Except for Permitted Liens,
and subject to the Carve-Out Expenses, no other claim having a priority superior to or pari passu with that granted to the Lender hereby and by the Interim Order and the Final Order shall be granted or approved or allowed while any
obligations under this Agreement remain outstanding. 
 (h) No Discharge; Survival of Claims. The Borrowers agree that (i) the
Postpetition Debt hereunder shall not be released or extinguished by the entry of an order (A) confirming a plan of reorganization in the Chapter 11 Cases (and the Borrowers pursuant to Section 1141(d)(4) of the Bankruptcy Code, hereby
waive any such discharge), (B) converting either or both of the Chapter 11 Cases to a chapter 7 case or (C) dismissing either or both of the Chapter 11 Cases and (ii) the Superpriority of administrative claims granted to the Lender
pursuant to the Interim Order and the Final Order and described in Section 1.1(g)(ii) and the Liens granted to the Lender pursuant to the Interim Order and the Final Order and described in Section 1.1(g) shall not be affected in any manner
by the entry of an order confirming a plan of reorganization in either or both of the Chapter 11 Cases. The terms and provisions of this Agreement and the other Postpetition Loan Documents and the Liens in favor of the Lender, granted pursuant to
the Postpetition Loan Documents shall continue in full force and effect notwithstanding the entry of any such order, and such claims and liens shall maintain their priority as provided by the Postpetition Loan Documents and to the maximum extent
permitted by law until all of the Postpetition Debt is indefeasibly paid in full and discharged. 
 (i) Waiver of any Priming Rights.
Upon the Effective Date, and on behalf of themselves and their estates, and for so long as any Postpetition Debt shall be outstanding, the Borrowers hereby irrevocably waive any right, pursuant to Section 364(c) and 364(d) of the Bankruptcy
Code or otherwise, to grant any Lien of equal or greater priority than the Lien securing the Postpetition Debt, or to approve a claim of equal or greater priority than the Postpetition Debt except as provided in Section 1.1(g). 
 (j) Guaranty. Each Guarantor hereby, jointly and severally, unconditionally and irrevocably, guarantees (the “Guaranty”) to the
Lender, as follows: 
 (i) (A) the full, complete and prompt payment of all amounts which may become due and owing under this Agreement,
the Secured Promissory Note, the Postpetition Security and Pledge Agreement and the other Postpetition Loan Documents; and (B) the full and timely performance by the Borrowers of each Borrower’s obligations under this Agreement and the
other Postpetition Loan Documents (items (A) and (B) are referred to collectively herein as the “Guaranteed Obligations”). 
  

 - 4 - 

 (ii) The liability of each Guarantor pursuant to this Guaranty shall be primary, absolute and
unconditional in accordance with its terms and shall remain in full force and effect without regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by any circumstance whatsoever including, without limitation,
the following (whether or not any Guarantor consents thereto or has notice thereof): 
 (A) any modification, supplement, extension, waiver
or any provision or amendment of any contract or agreement between any Borrower and any Guarantor, whether now existing or hereafter arising, including, without limitation, any of the Postpetition Loan Documents, 
 (B) any modification, release, waiver of any provision or other alteration of any of the Guaranteed Obligations, 
 (C) any change in the time, place or manner of payment of all or any portion of the Postpetition Debt, 
 (D) any invalidity or non-perfection of any security interest or lien on, or any other impairment of, any collateral securing any of Postpetition Debt,

 (E) any defect, limitation or insufficiency in the powers of any Borrower or any Guarantor to execute and deliver any Postpetition Loan
Document or 
 (F) any other circumstance which might otherwise constitute a defense available to, or a discharge of, any Guarantor.

 (iii) Each Guarantor’s liability hereunder shall apply to the Guaranteed Obligations as so altered, modified, supplemented,
extended, waived or amended. No invalidity, irregularity, impossibility, illegality, lack of authority or unenforceability, of all or any part of the Guaranteed Obligations shall affect, impair or be a defense to any Guarantor’s obligations
hereunder which are primary obligations of such Guarantor. 
 (iv) This Guaranty is a continuing, absolute and unconditional guaranty and
shall remain in full force and effect until all Guaranteed Obligations (including any extensions or renewals thereof or substitutions therefor) have been paid and satisfied in full. For the purposes of making payments hereunder, each Guarantor
hereby waives any right to assert any setoff, counterclaim or cross-claim. This Guaranty shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Guaranteed Obligations must be
restored or returned upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of any Guarantor or any Borrower, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer
for, any Guarantor or any Borrower or any substantial part of it or its property, or otherwise, all as though such payments had not been made. 
 (v) As consideration to the Lender for entering into the Postpetition Loan Documents, each Guarantor waives notice of the accrual of the Guaranteed Obligations and notice of or proof of reliance by the Lender upon this Guaranty or
acceptance of this Guaranty. Each Guarantor waives presentment, protest, demand for payment and notice of default or nonpayment to or upon the Lender with respect to the Guaranteed Obligations. Each Guarantor understands and agrees that this
Guaranty shall be construed as a continuing, absolute and 

  

 - 5 - 

 
unconditional guaranty of payment and performance and not of collection. Without limitation, each Guarantor waives (i) notice of acceptance of this
Guaranty by the Lender, and any and all notices and demands of every kind that may be required to be given by any statute, rule, law or this Guaranty, (ii) any defense arising by reason of any disability or other defense of any Borrower, other
than payment, (iii) any rights of subrogation that such Guarantor may have against any Borrower until all Guaranteed Obligations have been paid and satisfied in full and (iv) diligence in collection or protection of or realization upon the
Guaranteed Obligations, or any portion thereof, any other obligation hereunder, or guaranty of any of the foregoing, and any and all formalities that otherwise might be legally required to charge such Guarantor with liability hereunder. When
pursuing its rights and remedies hereunder against any Guarantor, the Lender may, but shall be under no obligation to, pursue such rights and remedies as they may have against any Borrower or any other person or entity, or against any collateral
security or other guaranty. Each Guarantor acknowledges that all of the waivers in this Guaranty have been made willingly, with the advice of legal counsel and with a full understanding of the legal consequences thereof. 
 (vi) Each Guarantor shall grant to the Lender a perfected lien on and security interest, subject to Permitted Liens, in all of its assets and
properties, whether now or hereafter existing, owned or acquired, all in accordance with the terms of the Postpetition Security and Pledge Agreement. Each Guarantor shall assist the Lender with any and all filings necessary or appropriate and
reasonably requested by the Lender for the perfection of the security interest granted hereunder. 
 Section 1.2 Closing.

 (a) The closing for the first Loan shall take place on the first Borrowing Date, at 10:00 a.m. at the offices of Arnold & Porter
LLP, located at 1600 Tysons Boulevard, Suite 900, McLean, Virginia, or at such other times and places as shall be mutually agreed to by the Parties. 
 (b) At such closing, (i) the Borrowers shall issue and deliver to the Lender the Secured Promissory Note, (ii) Lender shall pay the principal amount requested by the Borrowers for the first Loan by wire
transfer of immediately available funds to the account designated by the Borrowers on Schedule 1.1(b) hereto, (iii) the Borrowers shall pay all Transaction Expenses owed to the Lender and (iv) the Parties (and, as applicable,
their Affiliates) shall execute and deliver all other documentation contemplated hereby to be executed and delivered at such closing. 
 Section 1.3 Use of Proceeds. The net proceeds to the Borrowers from the Loans shall be used for each Borrower’s working capital needs as set forth in the Budget in accordance with each line-item of the Budget, subject to
the Allowed Variance, and only to the extent that Cash Collateral and any other funds of the Debtors are insufficient to pay such expenses as they come due. 
  

 - 6 - 

 ARTICLE II — CONDITIONS TO THE LOANS 
 Section 2.1 Conditions to the Advance of First Loan. The obligation of the Lender to make the first Loan under this Agreement is subject to
the satisfaction (or waiver by the Lender), at or before the first Borrowing Date, of the following conditions: 
 (a) Interim Order.
The Bankruptcy Court shall have entered the Interim Order, in form and substance acceptable to the Lender in its sole and absolute discretion, and such Interim Order shall be in full force and effect, shall not have been modified and shall not be
subject to any appeal, and the consummation of the transactions contemplated under this Agreement and the other Postpetition Loan Documents shall not be stayed by an order of any court. 
 (b) No Order Preventing Consummation. No temporary restraining order, preliminary or permanent injunction or other order or decree of the
Bankruptcy Court or any other Governmental Entity that has the effect of preventing the consummation of the transactions contemplated in this Agreement and the other Postpetition Loan Documents shall have been issued. 
 (c) Representations and Warranties Correct. The representations and warranties of each Loan Party contained in this Agreement or in any other
Postpetition Loan Document are true and correct, in each case as of the date of this Agreement and as of the first Borrowing Date, with the same effect as though made as of the date of this Agreement, except that the accuracy of representations and
warranties that by their terms speak only as of a specified date will be determined as of such date. 
 (d) Performance of
Obligations. Each Loan Party shall have performed or complied with all agreements and covenants required to be performed or complied with by it under this Agreement or any other Postpetition Loan Document at or prior to the first Borrowing Date.

 (e) Budget. Each Borrower and the Lender shall have agreed upon the Budget in form and substance acceptable to the Lender in its
sole and absolute discretion. 
 (f) Officer’s Certificate. Each Loan Party shall have delivered to the Lender a certificate, in
form and substance acceptable to the Lender, executed by a duly authorized officer of such Loan Party, dated as of the first Borrowing Date certifying as to the authenticity and continued effectiveness of attached copies of its Certificate of
Incorporation or Certificate of Formation, as applicable, and Bylaws or limited liability company agreement, as applicable, in each case as the same may be amended from time to time, and resolutions of its board of directors, stockholders or
members, as applicable, approving the transactions entered into in connection with this Agreement and the other Postpetition Loan Documents, as applicable, and authorizing specific officers or other Persons to execute and deliver this Agreement and
each of the other Postpetition Loan Documents, as applicable. 
 (g) Definitive Transaction Documents. A Notice of Borrowing and the
Secured Promissory Note shall have been issued and delivered by each Borrower to the Lender. Each Loan Party shall have delivered to the Lender each of the other Postpetition Loan Documents, as applicable, in each case duly executed by an authorized
signatory of such Loan Party. 
  

 - 7 - 

 (h) Security Filings. Each Loan Party shall have executed and delivered to the Lender all UCC-1
Financing Statements to be filed and such other Postpetition Security Documents necessary or appropriate as may be requested by Lender for the perfection of the Postpetition Security Interest granted by this Agreement or any other Postpetition Loan
Document, as applicable. 
 (i) Entry of Sale Procedure Order. The Bankruptcy Court shall have entered the Sale Procedure Order. Such
Sale Procedure Order shall be in full force and effect and shall not have been modified, amended, stayed, vacated, or reversed as a whole or in part without the Lender’s prior written consent and no procedure, deadline or provision in the Sale
Procedure Order shall have been modified, waived or not enforced by the Borrowers without the Lender’s prior written consent. 
 (j)
Consents and Waivers. Each Loan Party shall have received all material consents, approvals, authorizations, permits and waivers of, and delivered all notices to, third parties, including Governmental Entities and the Bankruptcy Court,
necessary for each Loan Party to consummate the transactions provided for under this Agreement and the other Postpetition Loan Documents, and all such consents, approvals, authorizations, permits and waivers shall be in full force and effect.

 (k) Material Adverse Effect. Since the date of DESC’s most recent audited financial statements, no event shall have occurred
or be reasonably likely to occur that would reasonably be expected to have a Material Adverse Effect. 
 (l) No Defaults. No Event of
Default shall have occurred and be continuing. 
 (m) Transaction Expenses. The Loan Parties shall have paid all Transaction Expenses
for which they have received an invoice. 
 (n) Other Documents. The Lender shall have received from the Loan Parties such other
documents as it may reasonably request in form and substance acceptable to the Lender, including but not limited to a certificate of good standing issued by the Secretary of State of each Loan Party’s jurisdiction of incorporation or formation,
as applicable, and each jurisdiction where a Loan Party is qualified to do business, and an incumbency certificate. 
 Section 2.2
Conditions to the Making of Subsequent Loans. The obligation of the Lender to make any Loan following the first Borrowing Date to the Borrowers is subject to the satisfaction (or waiver by the Lender), at or before each such Borrowing Date,
of the following conditions: 
 (a) Representations and Warranties Correct. The representations and warranties of each Loan Party
contained in this Agreement or in any other Postpetition Loan Document are true and correct, in each case with the same effect as though made as of the date of this Agreement and as of the date of the applicable Borrowing Date, except that the
accuracy of representations and warranties that by their terms speak as of a specified date will be determined as of such date. 
 (b)
Performance of Obligations. Each Loan Party shall have performed or complied with all agreements and covenants required to be performed or complied with by it under this Agreement and each other Postpetition Loan Document at or prior to the
date of the applicable Borrowing Date. 
  

 - 8 - 

 (c) Budget. Each Borrower shall have been operating its business in accordance with the Budget,
and shall not have made any expenditures in excess of any line item in the Budget without the express written consent of the Lender; provided, that the Borrowers shall be permitted (i) to the extent that an expense provided for in
the Budget in one week is not paid in that week, to pay such expense in a subsequent week and (ii) to make expenditures that exceed by up to five percent the amount provided for in any line item of the Budget during any week, so long as at no
time shall the aggregate of all actual disbursements for all preceding weeks of the Budget exceed by more than five percent the aggregate of all budgeted disbursements for such period (the “Allowed Variance”); provided,
however, that (x) to the extent the Budget includes professional fees and expenses, such fees and expenses may be paid, subject to the Carve-Out Expenses, when allowed by the Bankruptcy Court, but there shall be no Allowed Variance for
professional fees and expenses, (y) by no later than the second Business Day of each week, the Borrowers shall provide to the Lender a variance report reflecting, on a line-item basis, the actual cash disbursements for the preceding week and
the percentage variance of such actual disbursements from those reflected in the Budget for that period, and (z) no variance from the Budget shall increase the amounts that the Borrowers are authorized to borrow under this DIP Facility.

 (d) Orders Entered by the Bankruptcy Court. The Sale Procedure Order shall be in full force and effect. Such Sale Procedure Order
shall not have been modified, amended, stayed, vacated, or reversed as a whole or in part without the Lender’s prior written consent. No procedure, deadline or provision in the Sale Procedure Order shall have been modified, waived or not
enforced by the Borrowers without the Lender’s prior written consent. Each Borrower shall have fully and timely complied with each and every one of its obligations thereunder. The Final Order shall have been entered and shall be in full force
and effect and shall not have been amended, vacated, modified, stayed or reversed as a whole or in part, and each Borrower shall have fully and timely complied with each and every one of its obligations and with every deadline thereunder.

 (e) Receipt of a Notice of Borrowing. A Notice of Borrowing shall have been issued and delivered by each Borrower, as appropriate,
to the Lender. 
 (f) Effectiveness of Other Postpetition Loan Documents; No Default. Each of the Postpetition Loan Documents shall
continue to be in full force and effect and no Event of Default (or event or circumstance that with notice or the lapse of time, or both, would constitute an Event of Default) shall have occurred and be continuing as of the applicable Borrowing
Date, or would result from such Loan or from the application of the proceeds thereof. 
 (g) Consents and Waivers. Each Borrower
shall have received all material consents, approvals, authorizations, permits and waivers of, and delivered all notices to, third parties, including Governmental Entities and the Bankruptcy Court, necessary for each Loan Party to consummate the
transactions provided for under this Agreement and the other Postpetition Loan Documents, and all such consents, approvals, authorizations, permits and waivers shall be in full force and effect. 
  

 - 9 - 

 (h) Material Adverse Effect. Since the Effective Date, no event shall have occurred that has had
or would reasonably be expected to have a Material Adverse Effect. 
 (i) Transaction Expenses. The Loan Parties shall have paid all
Transaction Expenses for which they have received an invoice. 
 (j) No Order Preventing Consummation. No temporary restraining
order, preliminary or permanent injunction or other order or decree of the Bankruptcy Court or any other Governmental Entity that has the effect of preventing the consummation of the transactions contemplated in this Agreement and the other
Postpetition Loan Documents shall have been issued. 
 (k) Other Documents. The Lender shall have received from each Loan Party such
other documents as they may reasonably request in form and substance acceptable to the Lender. 
 ARTICLE III —
REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES 
 Each Loan Party represents and warrants to the Lender that, except
as expressly disclosed in DESC’s most recent annual report on Form 10-K as filed with the SEC, excluding any exhibits thereto, or DESC’s reports on Form 10-Q as filed with the SEC subsequent to such annual report on Form 10-K,
excluding any exhibits thereto, the statements contained in the following paragraphs of this Article III, as applicable to such Loan Party, are all true and correct. 
 Section 3.1 Organization and Good Standing. Each Loan Party and each of its Subsidiaries and Owned Entities (i) is a corporation or limited liability company duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization and (ii) pursuant to Sections 1107 and 1108 of the Bankruptcy Code and the orders of the Bankruptcy Court, has all requisite corporate or limited liability company, as
applicable, power and authority to carry on its business as now conducted and proposed to be conducted. Section 3.1 of the Disclosure Schedule lists all of the jurisdictions in which such Loan Party, any Subsidiary and any Owned Entity
is duly qualified to conduct business as a foreign corporation or limited liability company, as applicable, and is in good standing as a foreign corporation or limited liability company, as applicable. There are no other jurisdictions where the
character of the activities of any Loan Party, any Subsidiary or any Owned Entity, or the location of the properties and assets owned or leased by the foregoing requires such qualification, except where the failure to so qualify or be in good
standing is not reasonably likely to have a Material Adverse Effect. 
 Section 3.2 Subsidiaries. Section 3.2 of the
Disclosure Schedule sets forth a complete and accurate list of all Subsidiaries and Owned Entities, together with their respective jurisdictions of formation or organization, and the authorized and outstanding capital stock or other ownership
interests of each such Subsidiary or Owned Entity, by class and number and percentage of each class owned by any Borrower, any Subsidiary or Owned Entity or any other Person. Except as set forth in Section 3.2 of the Disclosure Schedule,
no Borrower or any of its Subsidiaries or Owned Entities owns, of record or beneficially, any shares of capital stock or other ownership interest in any other corporation, partnership, limited liability company or other Person. 
  

 - 10 - 

 Section 3.3 Power, Authorization and Validity. 
 (a) Each Loan Party has all requisite legal and corporate power to enter into, execute, deliver and perform its obligations under this Agreement and the
other Postpetition Loan Documents to which it is a party. 
 (b) All corporate or limited liability company, as applicable, and legal action
on the part of each Loan Party, its officers, directors, managers, stockholders and members, as applicable, necessary for the execution, delivery and performance by such Loan Party of this Agreement and each other Postpetition Loan Document to which
such Loan Party is a party, including without limitation the issuance of the Secured Promissory Note in accordance with the terms of this Agreement, has been taken. 
 (c) Assuming due execution and delivery by the Lender, this Agreement is, and upon their execution and delivery, each of the Postpetition Loan Documents to which any Loan Party is a party will be, subject to entry of
the Initial Order, valid and binding obligations, enforceable in accordance with their terms, of such Loan Party. 
 Section 3.4
Noncontravention. None of the execution, delivery and performance of and compliance with this Agreement and the other Postpetition Loan Documents will result in or constitute any breach, default or violation of (i) the Certificate of
Incorporation or Bylaws, or Certificate of Formation or limited liability company agreement, as applicable, of any Loan Party or the comparable organizational documents of any Subsidiary or Owned Entity, as in effect at that time, (ii) any
agreement, contract, lease, license, instrument or commitment (oral or written) to which any Loan Party, any of its Subsidiaries or any Owned Entity is a party or is bound or (iii) any Law, rule, regulation, statute or order applicable to any
Loan Party, its Subsidiaries, its Owned Entities, or their respective properties, or result in the creation of any Lien upon any of the properties or assets of any Loan Party or its Subsidiaries or Owned Entities (other than pursuant to the
Postpetition Loan Documents). 
 Section 3.5 Consents, Etc. No consent, approval, order or authorization of, or designation,
registration, declaration or filing with, any federal, state or local or other Governmental Entity except for entry of the Interim Order and any filings required in connection with the Postpetition Security Documents, or other Person on the part of
any Loan Party or any Subsidiary is required in connection with the valid execution, delivery and performance of this Agreement and the other Postpetition Loan Documents. Upon entry of the Interim Order, the Lender (and its successors and assigns)
shall have a valid, perfected Postpetition Security Interest in and to the Postpetition Collateral as provided for herein, subject only to the Permitted Liens. 
 Section 3.6 Capitalization. 
 (a) Section 3.6 of the Disclosure Schedule sets forth
the authorized capitalization of each Loan Party as of the Effective Date, and the issued and outstanding capitalization of each Loan Party as of May 12, 2008, including all outstanding warrants and options. There have been no changes in the
issued and outstanding capitalization of any Loan Party since May 12, 2008. All of the issued and outstanding shares of capital stock have been duly authorized and validly issued, and are fully paid and non assessable and have been offered,
issued, sold and delivered by each Loan Party in compliance with all applicable federal and state securities laws. 
  

 - 11 - 

 (b) Other than (i) shares reserved for issuance under any Loan Party’s equity incentive plans
and (ii) shares that may be issued pursuant to the Prepetition Loan Documents, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or
arrangements or agreements of any kind for the purchase or acquisition from any Loan Party or any of its Subsidiaries of its shares of capital stock or any securities convertible into or ultimately exchangeable or exercisable for any shares of their
capital stock. The consummation of any transaction pursuant to this Agreement will not result in a change in the exercise or conversion price or number of any securities of any Loan Party outstanding pursuant to anti-dilution or other similar
provisions binding upon such Loan Party and contained in or affecting any such securities. No Loan Party or any of its Subsidiaries is obligated in any manner to issue any shares of its capital stock or any other securities. 
 (c) The rights, preferences, privileges and restrictions of the Common Shares are as stated in each Loan Party’s Certificate of Incorporation,
Certificate of Formation, or other comparable organization document and as provided under applicable Law. 
 Section 3.7 SEC
Documents; Financial Information. DESC has made all filings with the SEC required under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or the Securities Act of 1933, as amended (the “Securities
Act”), on a timely basis. DESC has previously made available to the Lender complete and accurate copies, as amended or supplemented through the date hereof, of the following forms filed with the SEC: (i) each Form 10-K report
under the Exchange Act beginning with the fiscal year ended December 31, 2006 through the Effective Date, (ii) each Form 8-K report filed by DESC beginning with the fiscal year 2006 through the Effective Date, and (iii) each Form 10-Q
report under the Exchange Act filed by DESC beginning with the fiscal year 2006 through the Effective Date, with the Effective Date in each case to include the effective date of the latest amendment to this Agreement (such reports are collectively
referred to herein as the “Company Reports”). As of their respective dates, the Company Reports did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were made, not misleading. The audited financial statements and unaudited interim financial statements of DESC included in the Company Reports and the unaudited interim
financial statements of DESC as of and for the quarter ended March 31, 2008 included in the report on Form 10-Q for the first quarter of 2008 (the “March 31, 2008 Financial Statements”), (i) comply as to form in all
material respects with applicable accounting requirements and published rules and regulations of the SEC with respect thereto, (ii) were prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) applied
on a consistent basis throughout the periods covered thereby (except as may be indicated therein or in the notes thereto, and in the case of quarterly financial statements, as permitted by Form 10-Q under the Exchange Act), and (iii) fairly
present in all material respects (subject, in the case of the unaudited interim financial statements, to normal, year-end audit adjustments, none of which were material) the consolidated financial condition, results of operations and cash flows of
DESC as of the respective dates thereof and for the periods referred to therein. 
 Section 3.8 Financial Reporting. Each Loan
Party and each of its Subsidiaries maintains accurate books and records reflecting its assets and liabilities and maintains proper and adequate internal accounting controls which provide reasonable assurance that (i) transactions are executed
with management’s authorization, (ii) transactions are recorded as necessary to 

  

 - 12 - 

 
permit preparation of the consolidated financial statements of DESC included in the Company Reports and the March 31, 2008 Financial Statements, and to
maintain accountability for DESC’s consolidated assets, (iii) access to each Loan Party’s assets is permitted only in accordance with management’s authorization, (iv) the reporting of each Loan Party’s assets is
compared with existing assets as necessary to permit preparation of the consolidated financial statements of DESC in accordance with GAAP and to maintain accountability for each Loan Party’s consolidated assets, (v) accounts, notes and
other receivables and inventory are recorded accurately, and procedures each Loan Party believes in good faith to be adequate under the circumstances are implemented to effect the collection thereof on a timely basis and (vi) there are
procedures in place adequate to prevent, or timely detect, unauthorized acquisition, use or disposition of each Loan Party’s assets. As of the date of this Agreement, (x) there are no deficiencies in the design or operation of a Loan
Party’s internal controls over financial reporting which could adversely affect in any material respect such Loan Party’s ability to record, process, summarize and report financial data or material weaknesses in internal controls over
financial reporting and (y) to knowledge of any Loan Party, there has been no fraud relating to any Loan Party or any of its Subsidiaries, whether or not material, that involved management or other employees, whether current or former, of any
Loan Party or any of its Subsidiaries who have, or had, a significant role in such Loan Party’s internal controls over financial reporting. 
 Section 3.9 Liabilities. Except as reflected in the balance sheet included in DESC’s most recent set of financial statements filed with the SEC (the “Latest Balance Sheet”), the Loan Parties, their
Subsidiaries and their Owned Entities, taken together as a whole, do not have any Indebtedness, obligation or liability (contingent or otherwise) that, either alone or when combined with all similar obligations or liabilities, would be material to
them, and to the knowledge of any Borrower, there does not exist a set of circumstances that would reasonably be expected to result in any such material Indebtedness, obligation or liability. 
 Section 3.10 Judgments. The performance of any action by the Loan Parties required by or provided for under this Agreement or any other
Postpetition Loan Document is not restrained or enjoined by any order of the Bankruptcy Court or by any Governmental Entity (either temporarily, preliminarily or permanently). 
 Section 3.11 Proprietary Assets. 
 (a) Each Loan Party and each Subsidiary and Owned Entity (i) owns or has sufficient rights to all Proprietary Assets used in or necessary for its business as currently or proposed to be conducted, free and clear of all Liens, other
than Permitted Liens; and (ii) has taken reasonable and customary measures and precautions necessary to protect and maintain the confidentiality and secrecy of its Proprietary Assets (except the Proprietary Assets the value of which would be
unimpaired by public disclosure) and otherwise to maintain and protect the value of its Proprietary Assets. All necessary registration, maintenance and renewal fees previously due in connection with any registered Proprietary Assets have been paid
and all necessary documents and certificates previously due in connection with such Proprietary Assets have been filed with the relevant patent, copyright, trademark or other authorities in the United States or foreign jurisdictions, as the case may
be, for the purposes of maintaining such Proprietary Assets. 
 (b) Except where such infringement, misappropriation or unlawful use has not
had or would not reasonably be expected to have, individually or in the aggregate, a Material 

  

 - 13 - 

 
Adverse Effect, the operation of the business of each Loan Party and each of its Subsidiaries or Owned Entities (i) has not infringed or
misappropriated, does not infringe or misappropriate, and will not infringe or misappropriate as a result of the execution, delivery and performance of this Agreement and the other Postpetition Loan Documents, any Proprietary Asset of any Person,
(ii) does not violate any right of any Person (including any right to privacy or publicity), and (iii) does not materially breach any contract related to any Proprietary Asset. No Loan Party or any Subsidiary or Owned Entity has received
notice from any Person claiming that such operation or any act, any product, technology or service (including products, technology or services currently under development by any Loan Party, any Subsidiary or any Owned Entity) or Proprietary Assets
infringes or misappropriates any rights related to or arising out of Proprietary Assets of any Person. No Loan Party or any Subsidiary or Owned Entity has received notice to the effect that Proprietary Assets held by any of them are invalid or not
subsisting. No other Person is infringing, misappropriating or making any unlawful use of any Proprietary Asset used in or pertaining to the business of any Loan Party or any Subsidiary or Owned Entity. 
 (c) The Proprietary Assets used in or pertaining to the business of each Loan Party and its Subsidiaries, and the Proprietary Assets licensed to the
Owned Entities, when taken together, are sufficient to enable such Loan Party and each of its Subsidiaries to conduct its business in the manner in which such business has been and is being conducted free from liabilities or valid claims of
infringement or misappropriation by third parties. No Loan Party or any of its Subsidiaries or Owned Entities has licensed any of its Proprietary Assets to any Person on an exclusive basis and no Loan Party or any Subsidiary or Owned Entity has
entered into any covenant not to compete or contract limiting its ability to sell its products in any market or geographical area or with any Person. 
 (d) All current and former employees of each Loan Party and its Subsidiaries providing technical services, or otherwise having access to confidential information, relating to any Loan Party’s Proprietary Assets
have executed and delivered to such Loan Party or such Subsidiary an agreement (containing no material exceptions to or exclusions from the scope of its coverage relevant to such Loan Party’s business) that is substantially the same as to the
forms of standard employee agreement previously delivered to the Lender, and all current and former consultants and independent contractors to each Loan Party or its Subsidiaries providing technical services relating to such Loan Party’s or its
Subsidiaries’ Proprietary Assets have executed and delivered to such Loan Party or such Subsidiary, an agreement (containing no material exceptions to or exclusions from the scope of its coverage relevant to such Loan Party’s business),
the material provisions of which are in substance as protective to such Loan Party as the terms of the forms of standard employee agreement previously delivered to the Lender. 
 (e) To the extent that any Proprietary Asset has been developed or created independently or jointly by any Person other than any Loan Party or any
Subsidiary or Owned Entity for which any Loan Party or any Subsidiary or Owned Entity has directly or indirectly, provided consideration for such development or creation, each Loan Party or the relevant Subsidiary or Owned Entity has a written
agreement with such Person with respect thereto, and the relevant Loan Party or relevant Subsidiary or Owned Entity thereby has obtained ownership of, and is the exclusive owner of, all such Proprietary Assets therein by operation of law or by valid
assignment, and has required the waiver of all non-assignable rights. 
  

 - 14 - 

 (f) Other than standard Proceedings involving applications pending before the U.S. Patent and Trademark
office or foreign patent offices, no Proprietary Assets, product, technology, or service of any Loan Party or any Subsidiary or Owned Entity is subject to any Proceeding or outstanding decree, order, judgment or settlement agreement or stipulation
that restricts in any manner the use, transfer or licensing thereof by any Loan Party or any Subsidiary or Owned Entity, or may affect the validity, use or enforceability of such Proprietary Asset, product technology or service. 
 (g) Section 3.11(g) of the Disclosure Schedule lists separately, by entity, all material Proprietary Assets owned by, or filed in the name
of, each Loan Party, each of its Subsidiaries and each of its Owned Entities that have been registered in or with, issued by, or for which an application for registration has been filed in or with, a federal, state or other governmental office or
agency of appropriate jurisdiction. 
 Section 3.12 Changes. Since the date of DESC’s most recent audited financial
statements, there has not occurred or is reasonably be expected to occur any of the following: 
 (a) Any Material Adverse Effect; 

(b) Any material change, except in the ordinary course of business, in the contingent obligations of any Loan Party, its Subsidiaries or any Owned
Entity by way of guaranty, endorsement, indemnity, warranty or other contractual arrangement; 
 (c) Any waiver by any Loan Party, any
Subsidiary or any Owned Entity of a material right or of a material debt owed to it; 
 (d) Any debt, obligation or liability incurred,
assumed or guaranteed by any Loan Party, any Subsidiary or any Owned Entity, except for immaterial amounts and for current liabilities incurred in the ordinary course of business; 
 (e) Any sale, assignment or transfer of any Proprietary Asset, other than the nonexclusive license by any Loan Party, any Subsidiary or any Owned Entity
of such Proprietary Assets to customers, suppliers or contract manufacturers in the ordinary course of business consistent with past practices; 
 (f) Any change in any Material Contract to which any Loan Party, any Subsidiary or any Owned Entity is a party or by which it is bound, which change has had or could reasonably be expected to have a Material Adverse Effect; 
 (g) Any material Tax election or any change in any method or period of accounting or in any accounting policy, practice or procedure; 
 (h) Any compromise or settlement of any claims relating to Taxes, any Tax audit or other tax proceeding or the filing of any amended Tax Return;

 (i) Any “reportable transaction” for Tax purposes as defined in Treasury Regulations Section 1.6011-4(b); or 
 (j) Any arrangement or commitment by any Loan Party, any Subsidiary or any Owned Entity to do any of the acts, as applicable, described in this
Section 3.12. 
  

 - 15 - 

 Section 3.13 Compliance with Company Instruments and Laws. No Loan Party or any Subsidiary or
Owned Entity, is in violation of any provisions of its respective Certificate of Incorporation or Bylaws or other similar organizational document, each as currently in effect. Each Loan Party, each of its Subsidiaries and each Owned Entity, has been
and is in compliance in all material respects with all applicable Laws. All material Permits and other authorizations by Governmental Entities held by each Loan Party, its Subsidiaries and Owned Entities and which are necessary to their businesses
are valid and sufficient in all respects for the businesses presently carried on by them. 
 Section 3.14 Litigation. Except for
the Chapter 11 Cases, Section 3.14 of the Disclosure Schedules sets forth all suits, actions, Proceedings, claims or investigations pending or, to the knowledge of any Loan Party, threatened, including without limitation any
investigation by the SEC involving DESC or any current or former director or officer of DESC or any of its Subsidiaries, against or affecting any Loan Party or any of its Subsidiaries before any court, administrative agency or other Governmental
Entity that (i) involves in each case amounts in dispute, or alleges damages in excess of, $50,000, or requests specific performance or injunctive relief that could be material to the business, or (ii) questions or challenges the validity
of this Agreement or any of the other Postpetition Loan Documents, or any of the actions taken, or to be taken, by the Loan Parties under the Postpetition Loan Documents. 
 Section 3.15 Taxes. 
 (a) Each Loan Party, each of its Subsidiaries and each of its Owned
Entities have timely and properly filed, or had filed (or have properly obtained extensions and will file within the extension period) on its behalf, all Tax Returns required to be filed by it in any jurisdiction to which it is subject, and such
filed Tax Returns are accurate in all material respects, has paid all Taxes due and payable (whether or not shown on filed Tax Returns), and has set aside on its Latest Balance Sheet provisions reasonably adequate for the payment of all Taxes for
periods subsequent to the periods to which such Tax Returns apply. There are no unpaid and delinquent Taxes claimed to be due by the Taxing authority of any jurisdiction, and the officers of each Loan Party know of no basis for any such claim.

 (b) Section 3.15(b) of the Disclosure Schedule sets forth all outstanding agreements or waivers extending the statutory period
of limitation applicable to any Tax Returns. All Taxes that any Loan Party, any Subsidiary or any Owned Entity has been required to collect or withhold have been duly withheld or collected and, to the extent required, have been timely paid to the
proper Taxing authority. No Loan Party or any Subsidiaries or Owned Entities is a party to any Tax-sharing agreement or similar arrangement with any other Person. At no time has any Loan Party, any Subsidiary or Owned Entity been a member of an
affiliated, combined, consolidated or unitary Tax group (other than a group for which DESC is the common parent) for purposes of filing any Tax Return. None of the Loan Parties, the Subsidiaries or the Owned Entities is currently under any
contractual obligation to pay to any Governmental Entity any Tax obligations of, or with respect to any transaction relating to, any other Person, or to indemnify any other Person with respect to any Tax. 
  

 - 16 - 

 Section 3.16 Environmental and Safety Laws. 
 (a) There are no real properties which any Loan Party or any Subsidiary or Owned Entity, or other related organizations, or any of their predecessors or
successors formerly owned, operated or leased and which any Loan Party has ceased to own, operate or lease. 
 (b) With respect to the
Property and the Other Property no Loan Party or any prior owner or operator is subject to any Environmental Liabilities. 
 (c) With respect
to the Property, each Loan Party has obtained, possesses and is in compliance in all material respects with all Environmental Permits. 
 (d)
All of the Property is in compliance in all material respects with all Environmental Laws and the terms of any applicable leases. 
 (e)
There are no Liens, defaults, equitable interests, covenants, deed restrictions, notice or registration requirements, or other limitations applicable to the Property, based upon any Environmental Laws. 
 (f) There are no USTs located in, at, on or under the Property. 
 (g) There are no locations at which Pollutants have been Released, or otherwise come to be, in, at, on, under, a part of, involving or otherwise related to the Property or Other Property that give rise to material
Environmental Liabilities of any Loan Party or any Subsidiary; and each of such locations is in compliance with all Environmental Laws. 
 (h) There are no Conditions in, at, on, under, a part of, involving or otherwise related to the Property or Other Property (including but not limited to off-site migration of Pollutants from any such Property or Other Property), involving
the presence of any Pollutant, and each Loan Party or any Subsidiary or Owned Entity or other related organizations, or any of their predecessors or successors has not Managed any Pollutant in a manner that give or gives rise to material
Environmental Liabilities of any Loan Party or any Subsidiary or Owned Entity. 
 (i) There are no PCBs, lead paint, asbestos (of any type or
form), or materials, articles or products containing PCBs, lead paint or asbestos, located in, at, on, under, a part of, involving or otherwise related to the Property (including, without limitation, any building, structure, or other improvement
that is a part of the Property); and all of the PCBs, lead paint, asbestos, and materials, articles and products containing PCBs, lead paint or asbestos identified in Section 3.16(i) of the Disclosure Schedule are in compliance with all
Environmental Laws. 
 (j) No on-site sources of water for human consumption or other human contact in, at or on the Property, and no
subsurface waters under the Property, contain a Pollutant at a level exceeding a level which is established or recommended in Environmental Laws. 
 Section 3.17 Title to and Sufficiency and Condition of Assets. (a) Each Loan Party and each of its Subsidiaries has good and marketable title to all assets used in the operations of the business of each Loan Party
(excluding all Proprietary Assets), free and clear of all Liens other than Permitted Liens, (b) such assets constitute all of the assets, rights and properties that are used in the operation of the business of each Loan Party or any of its
Subsidiaries as it is now 
  

 - 17 - 

 
conducted or that are used or held by each Loan Party or any of its Subsidiaries for use in the operation of such Loan Party’s business and (c) all
such assets are in good operating condition and repair (reasonable wear and tear excepted) and are suitable for their intended use. 
 Section 3.18 Indebtedness and Existing Liens. Except for the Postpetition Debt and the Permitted Liens, there is no secured Indebtedness of any Loan Party or any of its Subsidiaries. The Borrowers have delivered to the Lender
true and correct copies of all documents related to the Prepetition Bank Lien and the Prepetition VEDA Lien. Schedule 3.18 sets forth all Indebtedness of each Loan Party and any of its Subsidiaries and all existing Liens on the assets of each
Loan Party and any of its Subsidiaries. 
 Section 3.19 Insurance. Each Loan Party has general commercial, product liability,
fire and casualty insurance policies with coverages which are customary for companies similarly situated to such Loan Party in the same or similar businesses. 
 Section 3.20 Priority of Security Interest. The obligations of each Loan Party under this Agreement will at all times rank senior in right of payment to any and all administrative expense claims against
each Borrower of the kind specified in Section 503(b) of the Bankruptcy Code, subject to the Carve-Out Expenses. 
 Section 3.21
Prepetition Obligations. The amount of the Prepetition Obligations as of the Petition Date is at least $18,573,570.76. Such amount constitutes a valid claim against each of the Prepetition Obligors. No Prepetition Obligor has any defenses,
offsets or counterclaims with respect to the Prepetition Obligations, nor any other claim or cause of action of any sort against the Lender or any of its Affiliates. 
 Section 3.22 No Brokers. No Borrower or any Subsidiary, nor any of their respective shareholders or members, is obligated for the payment of fees or expenses of any broker or finder in connection with the
origination, negotiation or execution of this Agreement or the other Postpetition Loan Documents, or in connection with any transaction pursuant to this Agreement or any other Postpetition Document. 
 Section 3.23 Defaults. After giving effect to the transactions contemplated under this Agreement and the Postpetition Loan Documents, there
has not occurred any event which constitutes an Event of Default which is presently continuing. 
 Section 3.24 Real Estate.

 (a) Leased Premises. Section 3.24(a) of the Disclosure Schedule contains a complete and accurate list of all premises
leased by any Loan Party or one of its Subsidiaries (the “Leased Premises”), and of all leases related thereto (collectively, the “Leases”). Each Loan Party has made available to the Lender a true and complete copy
of each of the Leases, and in the case of any oral Lease, a written summary of the material terms of such Lease. The Leases are valid, binding and enforceable in accordance with their terms and are in full force and effect. No event has occurred
which (whether with or without notice, lapse of time or both or the happening or occurrence of any other event) would constitute a default under any Lease on the part of any Loan Party. No Loan Party or any Subsidiary has knowledge of the occurrence
of any event which (whether with or without notice, lapse of time or both, or the happening or occurrence of any other event) would constitute a default under any Lease by any other party. Section 3.24(a) of the Disclosure
Schedule separately identifies all Leases for which consents or waivers must be 

  

 - 18 - 

 
obtained on or prior to the date that the first Loan is made (or which have been obtained) in order for such Leases to continue in effect according to their
terms after the date the first Loan is made. No Loan Party has waived any material rights under any Lease which would be in effect on or after the date of this Agreement. 
 (b) Leased Improvements. The Leased Improvements are operational and available for use in the business of each Loan Party and its Subsidiaries as it is currently conducted. All of the Leased Improvements on the
Leased Premises are located entirely on such Leased Premises. 
 (c) Real Property. Section 3.24(c) of the Disclosure
Schedule contains a complete and accurate list of each parcel of real property owned by any Loan Party or any of its Subsidiaries (the “Owned Properties”). Section 3.24(c) of the Disclosure Schedule contains a complete
and accurate list for each Loan Party and any Subsidiary of all options, rights of first refusal or any other contractual rights to purchase, acquire, sell, assign or dispose of any real property owned or leased by it to which such Loan Party or
Subsidiary, as applicable, is a party or under which it has any obligations. 
 Section 3.25 Full Disclosure. The statements by
each Loan Party contained in this Agreement, the exhibits to this Agreement, the Disclosure Schedule, the certificates and documents delivered by each Loan Party and its Subsidiaries to the Lender under this Agreement and in the information
delivered to the Lender and its Representatives, taken together as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements contained in this Agreement and any other
Postpetition Loan Document not materially misleading in light of the circumstances under which such statements were made. 
 ARTICLE IV — REPRESENTATIONS AND WARRANTIES BY THE LENDER 
 The Lender represents and warrants to, and
covenants with, each Loan Party as follows: 
 Section 4.1 Authority. The Lender is a limited partnership duly formed, validly
existing and in good standing under the Laws of the State of Delaware. The Lender has the requisite legal right and power, as applicable, to enter into, execute, deliver and perform its obligations under this Agreement and the other Postpetition
Loan Documents. Assuming due execution and delivery by the other parties hereto, this Agreement is, and upon their execution, the other Postpetition Loan Documents to which the Lender is a party will be, valid and binding obligations of the Lender,
enforceable in accordance with their terms. 
 Section 4.2 Noncontravention. None of the execution, delivery and performance of
and compliance with this Agreement and the other Postpetition Loan Documents will result in or constitute a material breach, default or violation of (i) the organizational documents of any Lender, as in effect at that time, (ii) any
agreement, contract, lease, license, instrument or commitment (oral or written) to which the Lender is a party or is bound or (iii) any Law, rule, regulation, statute or order applicable to the Lender, or its respective properties. 

 

 - 19 - 

 ARTICLE V — COVENANTS 
 Section 5.1 Access. To the extent permitted by Law and not in contravention of the rights of third parties, each Loan Party shall permit
Representatives of the Lender reasonable access to examine the corporate books and make copies or extracts from such corporate books and to discuss the affairs, finances and accounts of each Loan Party and its Subsidiaries with the principal
officers and employees of such Loan Party upon request, all during regular business hours, as often as the Lender may reasonably request. 
 Section 5.2 Communication with Accountants. Upon receipt of a request from the Lender or the Lender’s Representatives to either Borrower or the Borrowers’ counsel for the Chapter 11 Cases, the Borrowers shall
facilitate discussions between the Borrowers’ accountants and the Lender’s Representatives, and shall authorize those accountants to disclose to the Lender any and all requested financial statements and other supporting financial documents
and schedules (excluding their internal working papers) including copies of any management letter with respect to the business, financial condition and other affairs of each Borrower and any Subsidiary. Any such information provided to the Lender
may additionally be provided to each Borrower’s directors at their request or at such Borrower’s own determination. At or before the date the first Loan is made, each Borrower shall deliver a letter addressed to such accountants and tax
advisors instructing them to comply with the provisions of this Section 5.2. 
 Section 5.3 Security and Pledge
Agreements. Each Loan Party shall grant to the Lender a perfected lien on and security interest, subject only to Permitted Liens, in all of its assets and properties, whether now or hereafter existing, owned or acquired, all in accordance with
the terms of the Postpetition Security Agreement, as applicable, and the Interim Order and the Final Order. Each Loan Party shall assist the Lender with any and all filings necessary or appropriate and reasonably requested by the Lender for the
perfection of the Postpetition Security Interest, granted under and in accordance with the terms of this Agreement. 
 Section 5.4
Market Regulations. DESC shall notify Nasdaq of, and make all necessary filings with federal or state securities regulators in accordance with their requirements in connection with, the transactions pursuant to this Agreement and the other
Postpetition Loan Documents. 
 Section 5.5 Reporting Requirements. DESC will timely make all filings required to be filed with
the SEC or any state securities regulator, including (i) all periodic reports required under the Exchange Act; (ii) definitive proxy statements; (iii) reports on Form 8-K; and (iv) such other reports as DESC may be required to
file from time to time pursuant to applicable securities Laws, taking into account any and all extensions granted or permitted by the applicable securities regulator, and refrain from terminating its status as a reporting issuer. 
 Section 5.6 Information. 
 (a)
The Borrowers shall deliver to the Lender, (i) a weekly statement showing each Borrower’s Net Working Capital and unrestricted cash and cash equivalents for the previous week, in each case calculated in a manner consistent with past
practice and DESC’s audited and unaudited financial statements filed with the SEC in 2007 and (ii) a weekly report comparing, on a line-item basis, actual expenses against expenses as set forth in the Budget, and such other reports,
information or documents reasonably requested by the Lender. 
  

 - 20 - 

 (b) Each Borrower shall furnish to the Lender prompt written notice of the occurrence of any payment
default or Event of Default. Each notice delivered under this Section 5.6 shall be accompanied by a statement of such Borrower’s Chief Financial Officer or other executive officer setting forth the detail of the event or development
requiring such notice and any action taken or proposed to be taken with respect thereto. 
 (c) All material non-public information and data,
in whatever form, obtained by the Lender in respect of any Borrower and the subject matter of this Agreement (the “Confidential Information”) shall be held by the Lender in confidence and shall not be disclosed to any third party;
provided, that such Confidential Information may be disclosed if the disclosure (i) is made with the consent of such Borrower, (ii) is made to an Affiliate (including any general partner, manager, director, officer or employee) of
any Lender or of any Affiliate, and such Affiliate agrees to be subject to such confidentiality provisions, (iii) is requested or required by Law or by a Governmental Entity, including the Bankruptcy Court, (iv) is in respect of
information or data that is in the public domain at the time of the disclosure through no fault of the Lender or any party to which it has disclosed the information, (v) is made to the Lender’s advisors or Representatives, which agree to
maintain the confidentiality of the Confidential Information or (vi) is received from a third party not subject to confidentiality obligations with respect to such information. 
 Section 5.7 Payment of Obligations Each Borrower will pay all of its material obligations arising or coming due after the Petition Date,
including Tax liabilities before the same shall become delinquent or in default, except (a) to the extent such payment is prohibited by the Bankruptcy Code or other applicable Law or (b) where (i) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (ii) such Borrower has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (iii) the failure to make payment pending such contest could not
reasonably be expected to result in a material adverse effect on the business operations of the Borrowers and their respective Subsidiaries, take as a whole. 
 Section 5.8 Insurance. Each Loan Party shall and shall cause each Subsidiary to maintain insurance (i) covering, without limitation, fire, theft, burglary, public liability, property damage, product
liability and workers’ compensation and (ii) on all property and assets material to the operation of the business, all in amounts customary for such Loan Party’s industry. Each Loan Party shall, and shall cause each of its
Subsidiaries to, pay all insurance premiums payable by them. 
 Section 5.9 Properties. Each Loan Party will keep its properties
in good repair, working order and condition, reasonable wear and tear excepted, and from time to time make all necessary repairs, renewals, replacements, additions and improvements thereto. Each Loan Party will at all times comply in all material
respects with each provision of all leases to which it is a party or under which it occupies property. 
 Section 5.10 Fundamental
Changes. 
 (a) Until the Postpetition Debt and the Prepetition Obligations have been paid in full, each Loan Party covenants and agrees
with Lender that it shall not allow, and shall not permit any of its Subsidiaries to engage in any transactions that would result in: 
 (i)
any wind up, liquidation or dissolution of such Loan Party’s affairs, or entry into any transaction of merger or consolidation, sale or other disposition of all or substantially all of such Loan Party’s property or assets, including a sale
pursuant to Section 363 of the Bankruptcy Code, except pursuant to the Sale Procedure Order; 
  

 - 21 - 

 (ii) any Change in Control except pursuant to the Sale Procedure Order; 
 (iii) any recapitalization or reorganization of any Loan Party or any of its Subsidiaries, other than pursuant to a plan of reorganization approved by
the Lender; 
 (iv) the authorization, declaration or payment of any dividends on any class of any Loan Party’s stock; 
 (v) the redemption or repurchase of any shares of capital stock by any Loan Party (other than repurchases of Common Shares from employees upon the
termination of their employment pursuant to the terms of their employment agreements or on other terms approved by such Loan Party’s board of directors or sole stockholder); 
 (vi) any change, amendment or modification, or any application or motion for any change, amendment or modification to the Interim Order, the Final Order
or the Sale Procedure Order without the prior written consent of the Lender; 
 (vii) the existence of any Liens on the Postpetition
Collateral that are senior or pari passu with the Postpetition Security Interest, except for Permitted Liens; 
 (viii) the departure
of any of Bernard H. Cherry, Peter J. Tallian or Rob Friedland from their current positions; or 
 (ix) any material change in the principal
line of business of a Loan Party or its Subsidiaries. 
 Section 5.11 Preservation of Corporate Existence. Each Loan Party shall
preserve and maintain its and each of its Subsidiaries’ corporate existence, rights, franchises and privileges in the jurisdiction of its incorporation, and qualify and remain qualified as a foreign corporation in each jurisdiction in which
such qualification is required, unless the failure to so preserve, maintain or qualify does not and will not have a Material Adverse Effect, and preserve and maintain all of its Proprietary Assets that are material to it and its Subsidiaries’
business. 
 Section 5.12 Compliance with Law. Each Loan Party shall, and shall cause each of its Subsidiaries to, comply with
all Laws, including Environmental Laws and federal and state securities Laws, applicable to any of them, except non-compliance being contested in good faith through appropriate Proceedings so long as such Loan Party shall have set up and funded
sufficient reserves, if any, required under GAAP with respect to such items. 
  

 - 22 - 

 Section 5.13 Termination of Covenants. Other than as provided for by their terms, the
covenants set forth in this Article V shall continue in effect until all Postpetition Debt, including the full principal amount, all accrued but unpaid interest outstanding and any other amounts owed under the Secured Promissory Note are repaid
in full. 
 Section 5.14 Asset Sales. Each Borrower shall comply with the terms of the Sale Procedure Order with respect to any
sale of assets of such Borrower or any of its Affiliates (each, an “Asset Sale”) by any Borrower or any of its Affiliates. Upon the closing (as such term is defined in the applicable sale-purchase agreement) of an Asset Sale by any
Loan Party of a material asset, the net sale proceeds from such Asset Sale shall be used to repay any amounts due and payable under the Prepetition Obligations and the Postpetition Debt; provided that the sales proceeds from a sale of any
assets that form all or part of the Project Facility Prepetition Collateral shall be applied in accordance with the terms of the Consent Agreement. The Lender agrees that upon the sale of either the stock of Proton or any assets of Proton
(collectively, the “Proton Collateral”) pursuant to the Proton Sale Procedure Order or otherwise, the Lender shall release all Liens in its favor on the applicable Proton Collateral effective upon receipt by the Lender of the
proceeds of such sale. 
 ARTICLE VI — EVENTS OF DEFAULT 
 Section 6.1 Events of Default. The occurrence of any of the following shall constitute an “Event of Default”: 
 (a) Failure to Pay. Any Borrower shall fail to pay when due any principal payment on the Secured Promissory Note, or any interest or other payment
required under the terms of the Secured Promissory Note, or any Guarantor shall fail to pay when due any Guaranteed Obligation; 
 (b)
Breaches of Representations and Warranties. Any representation or warranty made by any Loan Party in this Agreement or in any of the other Postpetition Loan Documents shall not have been true when made; 
 (c) Breaches of Other Covenants. Any Loan Party shall fail to observe or to perform any other covenant, obligation, condition or agreement
contained in this Agreement or the other Postpetition Loan Documents, and solely in the case of any non-monetary covenant default, such failure continues for two Business Days after notice of the breach is delivered to the Borrowers; 
 (d) Cross-Default. After the Petition Date, (i) any Loan Party shall default under or otherwise fail to perform any of its obligations under
any Postpetition Loan Document, or (ii) any Loan Party or any of its Subsidiaries shall default under any other agreement, bond, debenture, note or other evidence of Indebtedness for money borrowed, under any guaranty or under any mortgage, or
indenture pursuant to which there shall be issued or by which there shall be secured or evidenced any Indebtedness for money borrowed by any Loan Party or any of its Subsidiaries, whether such Indebtedness now exists or shall hereafter be created,
including but not limited to, default under the obligations secured by any Permitted Lien; 
 (e) Compliance with Budget. The Loan
Parties shall make any expenditure using Cash Collateral or proceeds from this DIP Facility that is in excess of the amounts 

  

 - 23 - 

 
permitted by the Budget for such expenditure or otherwise not in compliance with the Budget, without the prior written consent of the Lender other than an
Allowed Variance subject to the conditions sets forth in Section 2.2(c) hereof; 
 (f) Chapter 11 Cases. Either of the Chapter 11
Cases shall be (i) dismissed (or the Bankruptcy Court shall make a ruling requiring the dismissal of a Chapter 11 Case) pursuant to Section 1112 of the Bankruptcy Code, (ii) converted to a case or cases under chapter 7 of the
Bankruptcy Code; or (iii) a trustee or examiner shall be appointed in either of the Chapter 11 Cases; 
 (g) Sale of Assets. Any
Borrower shall sell all or substantially all of such Borrower’s assets pursuant to Section 363 of the Bankruptcy Code or otherwise, unless (x) such asset sale is consummated pursuant to the Sale Procedure Order or (y) the
Prepetition Obligations and the Postpetition Debt have been paid in full; 
 (h) Compliance with any Order of the Bankruptcy Court.
Any Borrower shall fail timely to comply with any of its obligations under the Interim Order, the Final Order, the Sale Procedure Order, or any other Order entered by the Bankruptcy Court; 
 (i) Plan of Reorganization. Any Borrower or any other person shall propose any plan of reorganization that does not provide for payment in full,
in cash, on the effective date thereof, of all of the outstanding Postpetition Debt, or the Bankruptcy Court enters an order confirming any plan of reorganization (including any liquidating plan) or approving the sale of all or any material portion
of the assets or business of the Borrowers without the Lender’s prior written consent; 
 (j) Third-Party Financing. Any Borrower
shall file any motion seeking postpetition financing or an extension of postpetition credit other than this DIP Facility; and 
 (k) Entry
of Sale Procedure Order. After entry of any Sale Procedure Order by the Bankruptcy Court, (x) such Sale Procedure Order is modified, amended, stayed, vacated, or reversed as a whole or in part without the Lender’s prior written
consent, or (y) any procedure, deadline or provision in the Sale Procedure Order is modified, waived or not enforced by the Borrowers without the Lender’s prior written consent. 
 Section 6.2 Remedies. Upon the occurrence or existence of any Event of Default and at any time thereafter during the continuance of such
Event of Default, (i) the Lender may deliver a notice of default to the Borrowers with a copy to counsel for the Committee, if such Committee has retained counsel, and the Office of the United States Trustee, as applicable, and may declare all
outstanding Postpetition Debt payable by the Borrowers to be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained in this Agreement or in the
other Postpetition Loan Documents to the contrary notwithstanding; (ii) the Borrowers shall no longer be authorized to use Cash Collateral or to borrow funds under this Agreement without the consent of the Lender in its sole discretion, and
(iii) the Lender may terminate its commitment to make, and shall have no further obligation to make, any additional Loans to the Borrowers under this Agreement or any other Postpetition Loan Document. In addition, the Lender shall be entitled
to exercise any other rights and remedies of a secured creditor under applicable laws, this Agreement, the Postpetition Security and Pledge Agreement, the Interim Order or the Final Order. 
  

 - 24 - 

 ARTICLE VII — INDEMNIFICATION 
 Section 7.1 Indemnity. Each Loan Party agrees to indemnify and defend and hold harmless the Lender, its Affiliates, successors and assigns
and each of their Representatives (each, a “Indemnified Party,” and collectively, the “Indemnified Parties”) from and against, and agrees to pay or cause to be paid to the Indemnified Parties all amounts equal to
the sum of, any and all claims, demands, costs, expenses, losses and other liabilities of any kind, including all legal costs and expenses associated with any action taken to enforce their rights under this Article VII (“Losses”)
that the Indemnified Parties may incur or suffer (including without limitation all reasonable legal fees and expenses) which arise or result from any breach of any of its representations or warranties, or failure by any Loan Party to fully and
timely perform any of its covenants or agreements, in this Agreement or in any other Postpetition Loan Document or in any certificate or document delivered pursuant to this Agreement or any other Postpetition Loan Document, including but not limited
to any third party claims arising or resulting from such breach or failure, except to the extent such Losses arise out of the gross negligence or willful misconduct of the Lender, its Affiliates, successors and assigns and their respective officers,
directors, members, partners, employees and agents. The rights of the Lender hereunder shall be in addition to, and not in lieu of, any other rights and remedies which may be available to it by Law or under the Certificate of Incorporation and
Bylaws or Certificate of Formation and limited liability company agreement, as applicable, of any Loan Party or the Postpetition Loan Documents. 
 Section 7.2 Procedures. If a third party shall notify an Indemnified Party with respect to any matter that may give rise to a claim for indemnification under the indemnity set forth above in Section 7.1, the
procedures set forth below shall be followed. 
 (a) Notice. The respective Indemnified Party shall give to the Loan Parties
(collectively, the “Indemnifying Party”) written notice of any claim, suit, judgment or matter for which indemnity may be sought (a “Claim”) under Section 7.1 promptly but in any event within 30 days
after the Indemnified Party receives notice thereof, provided, however, that failure by the Indemnified Party to give such notice shall not relieve the Indemnifying Party from any liability it shall otherwise have pursuant to this
Agreement except to the extent that the Indemnifying Party is actually prejudiced by such failure. Such notice shall set forth in reasonable detail (x) the basis for such potential claim and (y) the dollar amount, or an estimated dollar
amount, as applicable, of such claim. The Indemnifying Party shall have a period of 30 days within which to respond thereto. If the Indemnifying Party does not respond within such 30-day period, the Indemnifying Party shall be deemed to have
accepted responsibility for such indemnity. 
 (b) Defense of Claim. With respect to a claim by a third party against an Indemnified
Party for which indemnification may be sought under this Agreement, the Indemnifying Party shall have the right, at its option and subject to the remainder of this Section 7.2, to be represented by counsel of its choice and to assume the
defense or otherwise control the handling of any Claim, which is set forth in the notice sent by the Indemnified Party, by notifying the Indemnified Party in writing to such effect within 30 days of receipt of such notice; provided,
however, that the Indemnified Party shall have the right to employ counsel to 

  

 - 25 - 

 
represent it if, in the Indemnified Party’s reasonable judgment based upon the advice of counsel, it is advisable in light of the separate interests of
the Indemnified Party, to be represented by separate counsel (including, as applicable, local counsel), and in that event the reasonable fees and expenses of one such separate counsel shall be paid by the Indemnifying Party plus appropriate local
counsel, if applicable, for all Indemnified Parties; and, provided further, that the Indemnifying Party shall not have the right to assume the defense of such Claim unless (i) the Indemnifying Party acknowledges fully the rights of the
Indemnified Party (and does not contest, as a whole or in part) the Indemnified Party’s indemnification rights for the Claim, (ii) the counsel selected by the Indemnifying Party is reasonably satisfactory to the Indemnified Party,
(iii) the Indemnified Party is kept informed of all material developments and is furnished copies of all material papers filed or sent to or from the opposing party or parties and (iv) the Indemnifying Party prosecutes the defense of such
Claim with commercially reasonable diligence in a manner which does not materially prejudice the defense of such Claim. If the Indemnifying Party does not give timely notice in accordance with the preceding sentence, the Indemnifying Party shall be
deemed to have given notice that it does not wish to control the handling of such Claim. In the event the Indemnifying Party elects (by notice in writing within such 30-day period) to assume the defense of or otherwise control the handling of any
such Claim for which indemnity is sought, the Indemnifying Party shall indemnify and hold harmless the Indemnified Party from and against any and all reasonable professional fees (including attorneys’ fees, accountants, consultants and
engineering fees) and investigation expenses incurred by the Indemnified Party after it provides notice under clause (a) and prior to such election, notwithstanding the fact that the Indemnifying Party may not have been so liable to the
Indemnified Party had the Indemnifying Party not elected to assume the defense of or to otherwise control the handling of such Claim. In the event that the Indemnifying Party does not assume the defense or otherwise control the handling of such
matter, the Indemnified Party may retain counsel, as an indemnification expense, to defend such Claim. 
 (c) Final Authority. The
Parties shall cooperate in the defense of any such Claim and each shall make available all books and records which are relevant in connection with such claim or litigation. In connection with any Claim with respect to which the Indemnifying Party
has assumed the defense or control, the Indemnifying Party will not consent to the entry of any judgment or enter into any settlement with respect to any matter which does not include a provision whereby the plaintiff or claimant in the matter
releases the Indemnified Party from all liability with respect thereto, without the written consent of the Indemnified Party, which shall not be unreasonably withheld. In connection with any Claim with respect to which the Indemnifying Party has not
assumed the defense or control, the Indemnified Party may not compromise or settle such Claim without the consent of the Indemnifying Party, which shall not be unreasonably withheld or delayed. 
 (d) Claims Between the Indemnifying Party and the Indemnified Party. Any Claim for indemnification under this Agreement which does not result from
the assertion of a Claim by a third party shall be asserted by written notice given by the Indemnified Party to the Indemnifying Party. The Indemnifying Party shall have a period of 30 days within which to respond thereto. 
  

 - 26 - 

 ARTICLE VIII — MISCELLANEOUS 
 Section 8.1 Waivers and Amendments. Unless otherwise provided, any provision of this Agreement may be amended, waived or modified upon the
written consent of the Borrowers and the Lender. 
 Section 8.2 Governing Law. This Agreement and all actions arising out of or
in connection with this Agreement shall be governed by and construed in accordance with the Laws of the United States of America, including but not limited to the Bankruptcy Code, and to the extent those Laws do not have an applicable rule, the Laws
of the State of New York, without regard to the conflict of laws provisions thereof 
 Section 8.3 Exclusive Jurisdiction. In the
event of any action or Proceeding brought by a Party arising out of or in connection with this Agreement or any other Postpetition Loan Document, the Parties consent to the exclusive jurisdiction of the Bankruptcy Court; provided that
(i) the Parties acknowledge that any appeals from the Bankruptcy Court may be heard by a court other than the Bankruptcy Court and (ii) if the Bankruptcy Court declines to exercise jurisdiction, then the Parties agree to the jurisdiction
of the United States District Court for the District of Delaware (the “District Court”); provided further, that nothing in this Agreement shall be deemed or operate to preclude the Lender from bringing suit or taking other
legal action in any other jurisdiction to realize on the Postpetition Collateral or any other security for the Postpetition Debt, or to enforce a judgment or other court order in favor of the Lender. Each of the Parties hereby waives any objection
that such Party may have to jurisdiction of the Bankruptcy Court or, if applicable, the District Court, based upon lack of personal jurisdiction, improper venue or forum non conveniens. Service of process on the Parties in any action arising
out of or relating to this Agreement shall be effective if mailed to the Parties in accordance with Section 8.7 of this Agreement or otherwise served in accordance with the applicable Federal Rules of Bankruptcy Procedure or Federal Rules of
Civil Procedure then in effect. 
 Section 8.4 Jury Waiver. THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT. 
 Section 8.5 Entire Agreement. This Agreement and the other
Postpetition Loan Documents constitute the full and entire understanding and agreement among the Parties with regard to the subjects of this Agreement and the other Postpetition Loan Documents. 
 Section 8.6 Fees and Expenses. Each Borrower jointly and severally agrees to pay, promptly upon receipt of an invoice, all out-of-pocket
expenses and fees and disbursements, including attorneys’, accountants’ and other professionals’ fees, incurred by the Lender and its Representatives in connection with (a) the negotiation, documentation and consummation of the
transactions contemplated in this Agreement, including any due diligence or other review conducted prior to the negotiation of this Agreement, (b) the formulation of the Interim Order and any Final Order and proceedings seeking entry of such
Orders, (c) the enforcement or protection of the Lender’s rights under the Postpetition Loan Documents and (d) the preservation of, or the sale of, collection from or other realization upon any of the Postpetition Collateral, which
amounts shall be (i) payable to the Lender as and when due under the Postpetition Loan Documents (or if a time for payment is not specified in the Postpetition Loan Documents, then upon demand made by the Lender), without offset or deduction,
(ii) deemed to be a part of the Postpetition Debt, and (iii) secured by the same Liens and entitled to the same Superpriority as the other Postpetition Debt (collectively, the “Transaction Expenses”). 
  

 - 27 - 

 Section 8.7 Notices. All notices, requests and other communications hereunder shall be in
writing and shall be deemed to have been duly given at the time of receipt if delivered by hand, or one day later if the sender receives confirmation of the facsimile transaction if transmitted by facsimile, or three days after being mailed,
registered or certified mail, return receipt requested, with postage prepaid, or one Business Day after being mailed via overnight courier service, to the applicable Parties at the address or facsimile number, as applicable, stated below or if any
Party shall have designated a different address or facsimile number by notice to the other Parties given as provided above, then to the last address or facsimile number so designated. 
  

					
	If to the Borrowers:
		
		 	Distributed Energy Systems Corp.
		 	10 Technology Drive
		 	Wallingford, CT 06492
			
		 	Attention:	  	Peter J. Tallian
		 	Facsimile:	  	(203) 678-2000
		
		 	with a copy to:
		
		 	Cooley Godward Kronish LLP
		 	One Freedom Square
		 	Reston Town Center
		 	Reston, VA 20190-5656
			
		 	Attention:	  	Brent Siler
		 	Facsimile:	  	(703) 456-8058
		
		 	Young, Conaway, Stargatt & Taylor LLP
		 	Brandywine Building
		 	1000 West Street
		 	17th Floor
		 	Wilmington, Delaware 19801
			
		 	Attention:	  	Robert S. Brady
		 	Facsimile:	  	(307) 571-1253
	
	If to the Lender:
		
		 	c/o Perseus, L.L.C.
		 	2099 Pennsylvania Ave., N.W.
		 	Suite 900
		 	Washington, DC 20006-1813
			
		 	Attention:	  	Teresa Y. Bernstein, Vice President for Legal Affairs
		 	Facsimile:	  	(202) 463-6215

  

 - 28 - 

					
	with a copy to:
		
		 	Arnold & Porter LLP
		 	1600 Tysons Boulevard, Suite 900
		 	McLean, VA 22102-4865
			
		 	Attention:	  	Robert B. Ott, Esq.
		 	Facsimile:	  	(703) 720-7399

 Section 8.8 Validity. If any provision of this Agreement or any of the Postpetition
Loan Documents shall be judicially determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby. 
 Section 8.9 Counterparts. This Agreement may be executed in any number of counterparts. Signatures on this Agreement may be communicated by
facsimile or electronic transmission and shall be binding upon the parties so transmitting their signatures. Counterparts with original signatures shall be provided to the other parties following the applicable facsimile or electronic transmission,
provided that the failure to provide the original counterpart shall have no effect on the validity or the binding nature of this Agreement. No Party shall raise facsimile or electronic delivery of a signature or the fact that any signature or
agreement or instrument was transmitted or communicated by a facsimile or e-mail as a defense to the formation or enforceability of a contract and each such Party forever waives any such defense. 
 Section 8.10 Publicity. 
 (a)
Neither of the Lender nor any Borrower shall issue any press release or make any public disclosure regarding the transactions contemplated hereby unless such press release or public disclosure is approved by those parties mentioned in such press
release or public disclosure in advance. Notwithstanding the foregoing, each of the Parties may, if required by the SEC, Nasdaq or other regulatory bodies, or pursuant to an order of the Bankruptcy Court or provisions of the Bankruptcy Code or the
Federal Rules of Bankruptcy Procedure, make such public disclosures with respect to the transactions contemplated hereby as each may be advised by counsel is legally necessary or advisable; provided, however, that the disclosing Party
shall give the other Party prior written notice of such requirement and a copy of the proposed public disclosure, in all cases with sufficient time for such other Parties to seek a protective order or other limit on the proposed public disclosure
(unless the disclosing party would suffer penalties or sanctions for failure to immediately disclose such information). 
 (b) The Parties
hereto acknowledge that (i) immediately following the execution of this Agreement, DESC intends to issue a press release announcing the execution of this Agreement and (iii) within four Business Days of the date of this Agreement, DESC
intends to file with the SEC a current report on Form 8-K regarding the transactions contemplated hereby, which report will include certain of the Postpetition Loan Documents attached as exhibits thereto. The Lender hereby agrees that it shall
not seek a protective order or other limit on the proposed public disclosure of the Postpetition Loan Documents, other than the Budget, as exhibits to such report. DESC hereby agrees that it shall provide the Lender with a copy of any such current
report on Form 8-K at least two Business Days prior to the intended date of such filing and shall not file such report unless approved in advance by the Lender, which approval shall not be unreasonably withheld or delayed. 
  

 - 29 - 

 Section 8.11 Succession and Assignment. Except as otherwise expressly provided in this
Agreement and subject to the other Postpetition Loan Documents and applicable Law, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, assigns, permitted transferees, heirs, executors and
administrators of the Parties. This Agreement may not be assigned by any Party without the prior written consent of the other Parties; provided, however, that either of the Lender may assign its rights hereunder to an Affiliate of the
Lender without the prior written consent of the Borrowers, so long as the Lender provides prompt written notice to the Borrowers of such assignment. Such assignee shall have no additional rights of assignment except to other Affiliates of the
Lender. 
 Section 8.12 Termination. The obligations of the Lender to be performed under this Agreement shall terminate on the
date on which (a) the Loans have been indefeasibly repaid in full, (b) all other Postpetition Debt under the Agreement and the other Postpetition Loan Documents have been completely discharged and (c) none of the Borrowers shall have
any further right to borrow any funds under this Agreement, including without limitation upon the occurrence of an Event of Default (the “Termination Date”); provided, that the obligations of the Loan Parties under
Sections 1.1(j) and 8.6 and Article VII, as applicable, and all rights and remedies of the Lender under this Agreement, the other Postpetition Loan Documents, the Interim Order, the Final Order and the Sale Procedure Order, in
each case shall survive the termination of Lender’s obligations to be performed under this Agreement. 
 Section 8.13 Further
Assurances. Each Loan Party shall promptly do, make, execute, deliver, or cause to be done, made, executed or delivered, all such further acts, documents and things as the Lender may require, acting reasonably, from time to time, for the purpose
of giving effect to this Agreement and shall take such steps as may be reasonably within its power to implement the full extent of this Agreement. 
 Section 8.14 No Strict Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement and each other Postpetition Loan Document. In the event an ambiguity or question of intent or
interpretation arises, this Agreement and each other Postpetition Loan Document shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship
of any of the provisions of this Agreement or any other Postpetition Loan Document. 
 [signatures appear on following page] 

  

 - 30 - 

 IN WITNESS WHEREOF, the Parties have executed and delivered this Agreement as of the day and year
first written above. 
  

			
	BORROWERS:
	
	DISTRIBUTED ENERGY SYSTEMS CORP.
		
	By:	 	  

	Name:	 	
	Title:	 	
	
	NORTHERN POWER SYSTEMS, INC.
		
	By:	 	  

	Name:	 	
	Title:	 	
	
	GUARANTORS:
	
	PROTON ENERGY SYSTEMS, INC.
		
	By:	 	  

	Name:	 	
	Title:	 	
	
	TECHNOLOGY DRIVE, LLC
		
	By:	 	  

	Name:	 	
	Title:	 	

  

 SIGNATURE PAGE 1 
 D-I-P LOAN AGREEMENT 

			
	NORTHERN POWER SYSTEMS COMMERCIAL CONDOMINIUM OWNERS ASSOCIATION
		
	By:	 	  

	Name:	 	
	Title:	 	
	
	DESC WTE ENERGY LLC
		
	By:	 	  

	Name:	 	
	Title:	 	
	
	NP CANADA, INC.
		
	By:	 	  

	Name:	 	
	Title:	 	

  

 SIGNATURE PAGE 2 
 D-I-P LOAN AGREEMENT 

			
	LENDER:
	
	PERSEUS PARTNERS VII, L.P.
		
	By:	 	Perseus Partners VII GP, L.P.,
		 	its general partner
		
	By:	 	Perseus Partners VII GP, L.L.C.,
		 	its general partner
		
	By:	 	  

  

 SIGNATURE PAGE 3 
 D-I-P LOAN AGREEMENT 

 SCHEDULE I 
 “Affiliate” means with respect to any Person, any other Person that directly or indirectly Controls, is Controlled by or is under common Control with such Person. 
 “Agreement” has the meaning set forth in the preamble to this Agreement. 
 “Allowed Variance” has the meaning set forth in Section 2.2(c). 
 “Bankruptcy Code” means title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. 
 “Bankruptcy Court” means the United States Bankruptcy Court for the District of Delaware or such other bankruptcy court having
jurisdiction over the Chapter 11 Cases from time to time. 
 “Borrower” has the meaning set forth in the preamble to this
Agreement. 
 “Borrowing Date” has the meaning set forth in Section 1.1(a). 
 “Budget” means the budget for anticipated expenses agreed to by the Borrowers and the Lender as approved by the Bankruptcy Court, in the
form attached as Exhibit E to this Agreement, as the same may be modified from time to time with the prior written consent of the Lender. 
 “Business Day” means any day other than a Saturday, Sunday or other day on which the national or state banks located in the State of New York, the State of Connecticut or the District of Columbia are authorized to be
closed. 
 “Carve-Out Expenses” means (a) allowed and unpaid professional fees and expenses incurred by the Borrowers
and any Committee appointed in the Chapter 11 Cases prior to the occurrence of an Event of Default in an aggregate amount not to exceed $350,000 for the Borrowers’ counsel and $100,000 for any professionals retained by any Committee (and for
any expenses allowed pursuant to Section 503(b)(3)(F) of the Bankruptcy Code), in each case less (x) any amounts paid to such professional for services performed on or after the Petition Date and (y) any retainers held by any such
professionals as of the Petition Date or paid thereafter; (b) up to $500,000 in employee wage, vacation and severance claims that the Borrowers owe but are not otherwise able to pay, provided, however, that such carve-out shall
not apply if (i) (A) Proton is sold as a going concern to a third-party buyer or the Lender makes a credit bid for Proton (regardless of whether the Borrowers accept such credit bid); and (B) Northern is sold as a going concern to a
third-party buyer or the Lender makes a credit bid for Northern (regardless of whether the Borrowers accept such credit bid), or (ii) an Event of Default has occurred under this Agreement; and (c) the payment of all fees required to be
paid pursuant to 28 U.S.C. § 1930(a)(6) and all unpaid fees payable to the Clerk of the Bankruptcy Court or the United States Trustee; provided, however, that at no time shall the Carve-Out Expenses or any Prepetition Collateral
(including, without limitation, Cash Collateral) be available for, or be used for payment of, any professional or other fees or expenses incurred by any Party in connection with (i) the assertion or prosecution of any claims or causes of action
against the Lender or any other Person affiliated with the Lender, (ii) any challenge to the amount or validity of the Prepetition Obligations, as acknowledged by the Borrowers in Section 3.21; or (iii) any 

  

 Schedule I-1 

 
challenge or other dispute regarding the extent, validity, characterization, amount, allowance, payment, perfection or priority of any claim, Lien, security
interest, or right granted to the Lender pursuant to the Interim Order, this Agreement, the other Postpetition Loan Documents or the Prepetition Loan Documents, or otherwise asserted by the Lender; in each case including, without limitation, formal
discovery proceedings in anticipation thereof, provided, that such funds may be used for the purposes of investigation of any such claim referenced in this sub-clause (iii). 
 “Cash Collateral” means the cash or cash equivalent proceeds of the Lender’s non-cash Prepetition Collateral. 
 “CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601, et seq.), as
amended, and all rules, regulations and standards issued thereunder. 
 “Change in Control” means any of the following:

 (a) any merger, consolidation, reorganization, recapitalization, or other business combination involving any Loan Party, in which the
shareholders of DESC immediately prior thereto do not own, directly or indirectly, outstanding voting securities representing more than 50% of the combined outstanding voting power of the surviving entity in such merger, consolidation,
reorganization, recapitalization or other business combination, other than a transaction expressly contemplated and permitted under this Agreement; 
 (b) the sale of all, or substantially all, of the assets of any Loan Party to a third party not wholly owned, directly or indirectly, by the DESC, other than a transaction expressly contemplated and permitted under this Agreement; or

 the sale of voting securities of any Loan Party in a transaction or a series of related transactions to any Person (or group of Persons
acting in concert), other than any Affiliates of the Lender or any Person who is or has been a Lender, that results in such Person (or group of Persons) (together with their Affiliates) owning more than 50% of the outstanding voting securities of
any Loan Party. 
 “Claim” has the meaning set forth in Section 7.2(a). 
 “Collateral” means all assets and properties of the Borrowers, whether currently owned or hereafter acquired, whether real or personal,
tangible or intangible, wherever located including all proceeds, products, rents and profits thereof, as set forth in more detail in either the SPA Security Documents with regard to Prepetition Collateral and the Postpetition Security Agreement with
regard to Postpetition Collateral, and including but not limited to any shares of stock, membership interests or other equity interests held by any Borrower in any other Person. 
 “Committee” means an official committee of unsecured creditors appointed in the Chapter 11 Cases pursuant to Section 1102 of the
Bankruptcy Code. 
 “Common Shares” means the shares of common stock of any Loan Party. 
  

 Schedule I-2 

 “Condition” means any condition that results in or otherwise relates to an Environmental
Liability. 
 “Consent Agreement” means that certain Consent and Priority Agreement among the Lender, DESC, Northern,
Merchants Bank and VEDA, dated as of May 31, 2007. 
 “Control”, “Controls” or
“Controlled” means the possession by one Person of the power to direct or cause the direction of the management or policies of another Person through the direct or indirect ownership of equity interests therein or by any other
arrangement. 
 “DESC” has the meaning set forth in the preamble to this Agreement. 
 “DESC WTE” has the meaning set forth in the preamble to this Agreement. 
 “DIP Facility” has the meaning set forth in the recitals to this Agreement. 
 “Disclosure Schedule” has the meaning set forth in the introductory paragraph to Article III of this Agreement. 
 “District Court” has the meaning set forth in Section 8.3. 
 “Effective Date” means the date that this Agreement is executed by the Parties. 
 “Environmental Laws” means all current and future Laws which address, are related to, or are otherwise concerned with environmental,
health or safety issues (including occupational safety and health). 
 “Environmental Liabilities” means any obligations or
liabilities (whether asserted or unasserted, known or unknown, including any notices, claims, complaints, suits or other assertions of obligation or liability) that are (a) related to any environmental, health or safety issues, and
(b) based upon or related to any provision of Environmental Law. The term “Environmental Liabilities” includes (without limitation) (i) fines, penalties, judgments, awards, settlements, Losses, damages (including foreseeable and
unforeseeable consequential damages), costs, fees (including attorneys’ and consultants’ fees), expenses and disbursements; (ii) defense and other response to an administrative or judicial action (including notices, claims,
complaints, Orders, suits and other assertions of liability); and (iii) financial responsibility for (x) cleanup costs and injunctive relief, including any Removal, Remedial or Response actions, and natural resource damages, and
(y) any other compliance or remedial measures. 
 “Environmental Permit” means any Permit that is authorized pursuant
to an Environmental Law. 
 “Event of Default” has the meaning set forth in Section 6.1. 
 “Exchange Act” has the meaning set forth in Section 3.7. 
 “Final Order” means a final order of the Bankruptcy Court, in form and substance acceptable to the Lender, entered after proper notice,
(a) authorizing the Borrowers to use Cash Collateral in accordance with the Budget, (b) granting the Lender adequate protection, (c) authorizing the Borrower to borrow funds under the DIP Facility and pursuant to this Agreement and
the Postpetition Loan Documents, (d) granting to the Lender the Liens and priorities provided for herein, and (e) affording related relief. 
  

 Schedule I-3 

 “GAAP” has the meaning set forth in Section 3.7. 
 “Governmental Entity” means any U.S. or non-U.S. federal, state, provincial, regional, local or municipal legislative, executive or
judicial department, commission, board, bureau, agency, office, tribunal, court or other instrumentality, governmental or quasi-governmental, public international organization and any applicable stock exchange or securities regulatory authority,
including without limitation, the SEC. 
 “Guaranteed Obligations” has the meaning set forth in Section 1.1(j).

 “Guarantor” and “Guarantors” has the meaning set forth in the preamble. 
 “Guaranty” has the meaning set forth in Section 1.1(j). 
 “Indebtedness” means (a) all obligations for borrowed money (including all notes payable and drafts accepted representing
extensions of credit and all obligations evidenced by bonds, debentures, notes or other similar instruments on which interest charges are customarily paid, (b) all obligations, contingent or otherwise, relative to the face amount of all letters
of credit, whether or not drawn, and banker’s acceptance issued for the account of any Loan Party, any Subsidiary or any Owned Entity, (c) all capitalized lease obligations, (d) all purchase money indebtedness, (e) all
obligations to pay the deferred purchase price of property or services (excluding trade accounts payable arising in the ordinary course of business) and Indebtedness secured by a Lien on property owned or being purchased (including Indebtedness
arising under conditional sales or other title retention agreements), whether or not such Indebtedness shall have been assumed by any Loan Party, any Subsidiary or any Owned Entity or is limited in recourse and (f) all obligations in respect
of, and obligations (continent or otherwise) to purchase or otherwise acquire, or otherwise assure a creditor against loss in respect of, Indebtedness of another Person of the type described in clauses (a), (b), (c), (d) or (e) above.

 “Indemnified Party” and “Indemnified Parties” have the meanings set forth in Section 7.1.

 “Indemnifying Party” has the meaning set forth in Section 7.2. 
 “Interim Order” means an interim order of the Bankruptcy Court, in form and substance acceptable to the Lender, entered after proper
notice (a) authorizing the Borrowers to use Cash Collateral in accordance with the Budget, (b) granting the Lender adequate protection, (c) authorizing the Borrower to borrow funds under the DIP Facility and pursuant to this Agreement
and the Postpetition Loan Documents, (d) granting to the Lender the Liens and priorities provided for herein, and (e) affording related relief, which Interim Order shall be substantially in the form attached hereto as Exhibit D
hereto, with only such modifications as to which the Lender may specifically consent. 
 “Law” means all United States and
non-U.S. federal, state and local laws, statutes, rules, regulations, standards, requirements, rules and principles of common law, ordinances and codes, now or hereafter in effect, including any judicial and administrative interpretations thereof,
and all Orders. 
  

 Schedule I-4 

 “Leased Improvements” means all leasehold improvements and fixtures located on the
Leased Premises. 
 “Leased Premises” has the meaning set forth in Section 3.24(a). 
 “Lender” has the meaning set forth in the preamble to this Agreement. 
 “Lien” means any security interest, pledge, bailment, mortgage, hypothecation, deed of trust, conditional sales and title retention
agreement (including any lease in the nature thereof), charge, encumbrance or other similar arrangement or interest in real or personal property, whether now or hereafter owned, operated or leased, and includes conditional sales contracts, title
retention agreements, capital trusts and capital leases. 
 “Loan” has the meaning set forth in Section 1.1(a).

 “Loan Party” and “Loan Parties” have the meaning set forth in the preamble to this Agreement.

 “Losses” has the meaning set forth in Section 7.1. 
 “Manage” and “Management” mean generation, production, handling, distribution, processing, use, storage, treatment,
operation, transportation, recycling, reuse and/or disposal, as those terms are defined, construed or otherwise used in Environmental Laws. 
 “March 31, 2008 Financial Statements” has the meaning set forth in Section 3.7. 
 “Material Adverse
Effect” means an effect on the business, financial condition, results of operations, prospects, properties or other assets of the Loan Parties or the ability of any Loan Party to perform its material obligations under this Agreement or any
Postpetition Loan Document, which effect, either individually or in the aggregate with other such effects is adverse and material. 
 “Material Contracts” means (i) all of each Borrower’s and its Subsidiaries’ contracts, agreements, leases or other instruments to which any Borrower or any of its Subsidiaries is a party or by which the
Borrowers, its Subsidiaries or its properties are bound, which involve prospective fixed and/or contingent payments or expenditures by or to any Borrower or its Subsidiaries of more than $25,000, singly or $50,000 in the aggregate, or in excess of
the normal ordinary and usual requirements of its business, (ii) all of each Borrower’s and its Subsidiaries’ loans or advances to any Person, and all loan agreements, bank lines of credit agreements, indentures, mortgages, deeds of
trust, pledge and security agreements, factoring agreements, conditional sales contracts, letters of credit or other debt instruments to which any Borrower or any of its Subsidiaries is a party, (iii) any guarantees by any Borrower or any of
its Subsidiaries, other than the Guaranties under the SPA, (iv) all operating or capital leases for equipment in an amount greater than $50,000 to which any Borrower or any of its Subsidiaries is a party, (v) all non-competition and
similar agreements to which any Borrower is a party, (vi) all contracts for the employment of any officer or employee, (vii) all distributor and sales agency agreements, (viii) any collective bargaining or union agreements, contracts
or commitments and (ix) any of (i) through (viii) for any Owned Entity, if such contract would be material to any Borrower, its Subsidiaries and its Owned Entities, taken together as a whole. 
  

 Schedule I-5 

 “Maturity Date” means August 1, 2008, as the same may be accelerated in accordance
with the terms of this Agreement and the Secured Promissory Note. 
 “Nasdaq” means the Nasdaq Global Market. 
 “Net Working Capital” shall mean (A) accounts receivable less allowances for doubtful accounts plus costs for unbilled work in
progress less (B) accounts payable plus (C) unrestricted cash and cash equivalents, in each case as such items appear in each Borrower’s accounting records prepared consistent with past practice and in accordance with
GAAP and calculated in the same manner used to derive the applicable balance sheet items reported in DESC’s audited and unaudited financial statements filed with the SEC in 2007. 
 “Northern” has the meaning set forth in the preamble to this Agreement. 
 “Northern Sale Procedure Order” means an order establishing procedures for the sale of all or substantially all of the assets of
Northern and its estate, including any motion for an order and notice of motion for an order, in form and substance satisfactory to the Lender in its sole and absolute discretion. 
 “Notice of Borrowing” has the meaning set forth in Section 1.1(b)(i). 
 “NP Canada” has the meaning set forth in the preamble to this Agreement. 
 “NPSCCOA” has the meaning set forth in the preamble to this Agreement. 
 “Order” means any order, injunction, judgment, decree, ruling, writ, arbitration decision or award, Permit, license or assessment of a
Governmental Entity, including any order of the Bankruptcy Court. 
 “Other Property” means any property, other than the
Property, which property was, at or prior to the Effective Date, (a) owned, operated or leased by (i) any Borrower, (ii) any Affiliate or Subsidiary of any Borrower, or (iii) any predecessor or successor organization of those
identified in (i) or (ii); or (b) engaged in any contract manufacturing or processing, or other similar activities for, with, or on behalf of any Borrower or any of its Subsidiaries. 
 “Owned Entity” means any corporation, partnership or other similar entity that any Borrower owns an interest of more than 25% but not
more than 50% of the voting securities or voting interests therein. 
 “Party” and “Parties” have the
meanings set forth in the preamble to this Agreement. 
 “Permit” means any permit, license, review, certification,
approval, registration, consent or other authorization issued pursuant to any Law. 
 “Permitted Liens” means the Perseus
Prepetition Liens, the Prepetition Bank Lien and the Prepetition VEDA Lien. 
 “Perseus Prepetition Liens” means the
Lender’s security interests in and liens on the Prepetition Collateral. 
  

 Schedule I-6 

 “Person” means any individual, sole proprietorship, partnership, corporation, limited
liability company, joint venture, unincorporated society or association, trust or other legal entity or any Governmental Entity. 
 “Petition Date” has the meaning set forth in the recitals to this Agreement. 
 “Pollutant”
includes any substance, material, article or product that is defined or otherwise regulated under any Environmental Law as a “toxic” or “hazardous” substance, material or waste, a “pollutant,” or a
“contaminant,” and including without limitation any petroleum product or byproduct, solvent, flammable or explosive material, radioactive material, asbestos, polychlorinated biphenyls (“PCBs”), dioxins, dibenzofurans,
heavy metals, radon gas, mold, mold spores and mycotoxins. 
 “Postpetition Collateral” means the Collateral securing the
Postpetition Security Interest granted under this Agreement and the Postpetition Loan Documents. 
 “Postpetition Debt”
means all principal and interest, and all fees, costs and expenses and other amounts payable under the Secured Promissory Note under this Agreement or any other Postpetition Loan Document. 
 “Postpetition Loan Documents” means this Agreement, the Secured Promissory Note, the DIP Security and Pledge Agreement and any other
instrument or agreement at any time delivered in connection with the foregoing or to secure the Prepetition Obligations, in each case as the same may be amended or restated from time to time. 
 “Postpetition Security Agreement” means that certain security and pledge agreement entered into by and among the Lender and the Loan
Parties, substantially in the form of Exhibit C hereof. 
 “Postpetition Security Interest” has the meaning set forth
in the recitals of this Agreement. 
 “Prepetition Bank Lien” means the first priority mortgage Lien held by Waring on the
Project Facility Prepetition Collateral. 
 “Prepetition Collateral” means the Collateral of the Borrowers securing the
Liens granted under the Prepetition Loan Documents. 
 “Prepetition Loan Documents” means the SPA, the Promissory Notes, the
Warrants, the DESC Security Agreement, the Subsidiary Security and Pledge Agreement, the Prepetition Guaranty, the Consent Agreement and other agreements, documents and instruments as set forth in the definition of “Transaction Documents”
in the SPA, in each case as the same may be amended or restated from time to time, including but not limited to the First Amendment. 
 “Prepetition Obligations” has the meaning set forth in the recitals of this Agreement. 
 “Prepetition
Obligor” means each of DESC, Northern, Proton and Tech LLC. 
 “Prepetition VEDA Lien” means the second priority
mortgage lien on the Project Facility Prepetition Collateral held by VEDA and subordinate only to the Prepetition Bank Lien. 
  

 Schedule I-7 

 “Proceeding” means any action, suit, proceeding, claim, arbitration, mediation or
investigation before any Governmental Entity or before any arbitrator or mediator or similar party, or any investigation or review by any Governmental Entity or similar party. 
 “Project Facility Prepetition Collateral” means certain land and buildings located at 29 Pitman Road, Barre, Vermont 05641 and the
equipment, furniture and fixtures located therein, and with respect to the Prepetition Bank Lien only the account held at Merchants Bank. 
 “Promissory Notes” means those senior secured convertible promissory notes issued in connection with the Prepetition Loans Documents and listed on Schedule II of this Agreement. 
 “Property” means the Wallingford Property; the former Bombardier Mass Transit Corporation site in Barre, VT; 182 Mad River Park and 185
Mad River Canoe Road facilities in Waitsfield, VT; leased space in Anaheim and San Leandro, CA; leased space in Houston, Texas; and any other owned or leased space. 
 “Proprietary Assets” means: (A) any patent, patent application, trademark (whether registered or unregistered), trademark application, trade name, fictitious business name, logo, service mark
(whether registered or unregistered), service mark application, copyright (whether registered or unregistered), copyright application, maskwork, maskwork application, trade secret, know-how, customer list, database, data compilation and collection,
technical data, franchise, system, computer software, computer program, source code, executable code, domain name, web address and site, invention (whether or not patentable), discovery, improvement, design, blueprint, engineering drawing,
proprietary product, technology, proprietary right or other intellectual property right; and (B) any right to use or exploit any of the foregoing. 
 “Proton” has the meaning set forth in the preamble to this Agreement. 
 “Proton
Collateral” has the meaning set forth in Section 5.14. 
 “Proton Sale Procedure Order” means an order
establishing procedures for the sale of either the stock of Proton, or all or substantially all of the assets of Proton and its estate, including any motion for an order and notice of motion for an order, in form and substance satisfactory to the
Lender in its sole and absolute discretion. 
 “RCRA” means the Resource Conservation and Recovery Act (42 U.S.C.
§ 6901 et seq.), as amended, and all rules, regulations and standards issued thereunder. 
 “Release”
means any releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, placing, discarding, abandonment, or disposing into the environment (including the placing, discarding or abandonment
of any barrel, container or other receptacle containing any Pollutant or other material). 
 “Removal,”
“Remedial” and Response” actions include the types of activities covered by CERCLA, RCRA, and other comparable Environmental Laws, and whether the activities are (a) those that might be taken by a Governmental
Entity or (b) those that a Governmental Entity or any other Person might seek to be taken by a third party who is or has been engaged in the Management of Pollutants. 
  

 Schedule I-8 

 “Representative” means the respective officers, directors, members, partners, employees
and agents, including without limitation, attorneys, accountants, consultants and other representatives designated by the Lender. 
 “Sale Procedure Order” means collectively the Northern Sale Procedure Order, the Proton Sale Procedure Order, and any other order establishing procedures for the sale of the stock, or all or substantially all, of the assets
of any Borrower and its estate, including a motion for an order and a notice of motion for an order, in form and substance satisfactory to the Lender in its sole and absolute discretion. 
 “SEC” means the United States Securities and Exchange Commission. 
 “Secured Promissory Note” has the meaning set forth in Section 1.1(b)(ii). 
 “Securities Act” has the meaning set forth in Section 3.7. 
 “SPA” has the meaning set forth in the recitals. 
 “SPA Security Documents” means the Security and Pledge Agreement, the Subsidiary Security and Pledge Agreement, the Guaranty, any UCC-1 financing statements, mortgages, deposit control agreements and
such other documents necessary or appropriate for the perfection of the security interests granted by the SPA or any other Prepetition Loan Document entered into in connection with the SPA. 
 “Subsidiary” means any entity in which any Loan Party, directly or indirectly, owns greater than 50% of the voting securities or
interests, and any Loan Party’s subsidiaries, when referred to together, are referred to in this Agreement as “Subsidiaries.” 
 “Subsidiary Security and Pledge Agreement” means that certain security and pledge agreement entered into among each of Northern, Proton and Tech LLC and the Lender, dated June 1, 2008. 
 “Superpriority” means priority in accordance with the provisions of § 364(c)(1) of the Bankruptcy Code over any and all
administrative expenses of any kind whatsoever including, without limitation, the kind specified in §§ 105, 326, 328, 330, 331, 503(b), 507(a), 507(b), 546(c) or 726 of the Bankruptcy Code. 
 “Tax” and “Taxes” mean any federal, state, local or foreign income, alternative or add-on minimum tax, gross income,
gross receipts, sales, use, ad valorem, value-added (or similar), transfer, franchise, profits, license, withholding, payroll, employment, unemployment, social security, disability, estimated, excise, severance, stamp, occupation, premium,
property, environmental or windfall profit tax, custom, duty or other tax of any kind whatsoever (including any interest, penalty, or addition thereto. 
 “Tax Return” means any return, declaration, report or information return or statement required to be filed with any Governmental Entity in connection with Taxes, including any schedule of
attachment thereto and any amendment thereof. 
 “Tech LLC” has the meaning set forth in the Preamble. 
  

 Schedule I-9 

 “Termination Date” has the meaning set forth in Section 8.12. 
 “Transaction Expenses” has the meaning set forth in Section 8.6. 
 “VEDA” means the Vermont Economic Development Authority. 
 “Waring” means Waring Investments, Inc., assignee of Merchants Bank. 
 “Warrants” means the Initial Investment Warrant, the Subsequent Investment Warrant, the Additional Investment Warrant and any other warrant issued and delivered to the Lender under the terms of and as defined in the SPA
Agreement. 
 “UST” means an underground storage tank, including as that term is defined, construed and otherwise used in
RCRA and in rules, regulations and standards issued pursuant to RCRA and comparable state and local Laws. 
  

 Schedule I-10 

 SCHEDULE II 
 List of Promissory Notes 
  

				
	 Date Issued
	  	Principal Amount
	August 24, 2007	  	$	15,000,000.00
	October 1, 2007	  	$	190,068.49
	January 1, 2008	  	$	478,591.20
	March 13, 2008	  	$	1,500,000.00
	April 1, 2008	  	$	488,304.12
	April 1, 2008	  	$	9,246.58

  

 Schedule II-1 

 Schedule 1.1(b) 
 Borrowers’ Wiring Instructions 
  

 Schedule II-1 

 Schedule 1.1(e) 
  

 Schedule II-I 

 Schedule 3.18 
 Existing Indebtedness and Liens 
  

 Schedule II-I 

 EXHIBIT A 
 Form of Notice of Borrowing 
  

 Exhibit A-1 

 EXHIBIT B 
 Form of Secured Promissory Note 
  

 Exhibit B-1 

 EXHIBIT C 
 Form of Postpetition Security and Pledge Agreement 
  

 Exhibit C-1 

 EXHIBIT D 
 Form of Interim Order 
  

 Exhibit D-1 

 EXHIBIT E 
 Form of Budget 
  

 Exhibit F-1Stock Purchase Agreement

 EXHIBIT 10.2 
 EXECUTION COPY 
 STOCK PURCHASE AGREEMENT 
 THIS STOCK PURCHASE AGREEMENT (the “Agreement”) is made as of the 4th day of June, 2008, by and between Distributed Energy Systems
Corp., a Delaware corporation and about to be a debtor-in-possession, having a principal business address of 10 Technology Drive, Wallingford, Connecticut 06492 (the “Seller”), and Baker Companies, Inc., a New York corporation, having a
principal business address of 485 Washington Avenue, Pleasantville, New York 10570 (the “Purchaser”). 
 RECITALS 

 WHEREAS, Proton Energy Systems, Inc. (“Proton”) is a wholly owned subsidiary of Seller; and 
 WHEREAS, Proton develops and sells on-site hydrogen gas delivery systems, hydrogen generation systems and regenerative fuel cell products (the
“Business”); 
 WHEREAS, on or about June 4, 2008, Seller will commence a case, Case No.
                     (the “Bankruptcy Case”), under Chapter 11 of Title 11 of the Bankruptcy Code (the “Bankruptcy Code”),
in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”); and 
 WHEREAS, Proton operates its
business at its Wallingford Property (as defined below), which it owns through its wholly owned subsidiary Technology Drive, LLC; and 
 WHEREAS, on the terms and conditions contained in this Agreement, and subject to the approval of the Bankruptcy Court and the receipt of higher or better offers in accordance with bidding procedures to be approved by the Bankruptcy Court,
Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, all of the outstanding capital stock of Proton (the “Shares”). 
 NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties agree as follows: 
 ARTICLE I 
 Definitions And
References 
 Section 1.1. For purposes of this Agreement, the following terms have the meanings specified or referred to in this
Article I. 

 “Affiliate” means a Person which controls, is in common control with or is controlled
by, another Person. A Person will be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other Person, whether through the ownership of
voting securities, by contract or otherwise. 
 “Applicable Law” means, with respect to any Person, all provisions of common
or statutory laws, statutes, ordinances, rules, regulations, permits, certificates, judgments or orders of any Governmental Authority applicable to such Person. 
 “Approval Order” means the order of the Bankruptcy Court approving this Agreement and the sale by the Seller to Purchaser of the Shares substantially in the form attached hereto as Exhibit A.

 “Auction” has the meaning set forth in Section 5.2(a). 
 “Balance Sheet” has the meaning set forth in Section 4.2(h). 
 “Bankruptcy Case” has the meaning set forth in the Recitals. 
 “Bankruptcy Code” has the meaning set forth in the Recitals. 
 “Bankruptcy Court” has the meaning set forth in the Recitals. 
 “Break-Up Fee” has the meaning set forth in Section 5.3. 
 “Business” has the meaning set forth in the Recitals. 
 “Business Day” means any day that is not a Saturday, Sunday or a day on which the commercial banks in New York, New York are required or permitted to be closed. 
 “Claims” has the meaning set forth in Section 2.1. 
 “Closing” means the consummation of the sale of the Shares to Purchaser pursuant to Section 3.2 hereof. 
 “Closing Date” means the date upon which a Closing occurs as set forth in Section 3.2 of this Agreement. 
 “Closing Working Capital” has the meaning set forth in Section 3.7(a). 
 “Competing Offer” has the meaning set forth in Section 5.2(a). 
 “Connecticut Transfer Act”
means The Connecticut Transfer Act, C.G.S. Section 22a-134 et seq. 
  

 2 

 “Contracts” means any written or unwritten agreements, documents, contracts, contract
rights, grants, leases, subleases, indentures, license agreements, franchise rights and agreements, policies, purchase and sales orders, quotations and executory commitments, instruments, guaranties, indemnifications, arrangements, obligations,
commitments or similar understandings. 
 “Encumbrances” shall mean any mortgage, pledge, lien (statutory or otherwise),
security interest, easement, right of way, covenant, claim, restriction, right, option, conditional sale or other title retention agreement, charge or encumbrance of any kind or nature. 
 “Environmental and Safety Requirements” means all current or future civil and criminal Applicable Laws, Orders and obligations
concerning public health and safety, worker health and safety, and pollution, protection and restoration of the environment and natural resources, including, without limitation, all those relating to the presence, use, production, generation,
handling, transportation, treatment, storage, disposal, distribution, labeling, testing, processing, discharge, Release, threatened Release, control or cleanup of any Hazardous Substances. 
 “Expense Reimbursement Fee” has the meaning set forth in Section 5.3. 
 “Final Working Capital” has the meaning set forth in Section 3.7(e). 
 “GAAP” means generally accepted United States accounting principles, applied on a basis consistent with the basis on which the Balance
Sheet and the other financial statements referred to in Article 4.2(h) were prepared. 
 “Governmental Authority” means any
domestic or foreign government or political subdivision thereof, whether on a Federal, state or local level and whether quasi-state, statutorily-created investment fund, executive, legislative or judicial in nature, including any agency, authority,
board, bureau, commission, court, department or other instrumentality thereof. 
 “Hazardous Substances” means all
materials, wastes, chemicals or substances defined by, or regulated under, any Applicable Law as a hazardous waste, hazardous material, hazardous substance, hazardous constituents, extremely hazardous waste, restricted hazardous waste, contaminant,
pollutant, toxic waste, toxic substance or words of similar meaning and regulatory effect under any applicable Environmental and Safety Requirements, including, without limitation, asbestos, lead paint, toxic mold, radon, polychlorinated biphenyls,
infectious waste, pesticides, petroleum products or byproducts or radiation 
 “Indebtedness” means with respect to any
Person, without duplication (i) all obligations for borrowed money, including, without limitation, all obligations evidenced 

  

 3 

 
by notes or similar instruments, (ii) all obligations issued or assumed as the deferred purchase price of property or services, (iii) all capital
lease obligations, (iv) all obligations secured by an Encumbrances, (v) all obligations to pay a specified purchase price for goods and services, whether or not delivered or accepted, (vi) all obligations in respect to swap or hedge
agreements or similar agreements, (vii) the principal component of all obligations, contingent or otherwise, in respect of letters of credit and bankers’ acceptances, (viii) all Contracts with any Governmental Authority containing
obligations to repay funds or grants, and (ix) all guarantees of Indebtedness described in clauses (i) to (viii) above; provided, that Indebtedness will not include (a) trade payables, accrued expenses and intercompany
liabilities arising in accordance with customary practices and in the ordinary course of business, and (b) prepaid or deferred revenue arising in accordance with customary practices and in the ordinary course of business. 
 “Intellectual Property Rights” means all industrial and intellectual property rights recognized under any Applicable Laws or
international conventions or agreements, and in any country or jurisdiction in the world, including, without limitation, patents, patent applications, and patent rights, trademarks, trademark applications and registrations, service marks, service
mark applications and registrations, domain names, domain name applications and registrations, trade dress, logos and designs, trade names, brands, product configurations, and the goodwill connected with the foregoing, copyrights and copyright
rights, copyrightable subject matter, copyright applications and registrations throughout the world for the full term thereof, including all renewals, mask works, know-how, business methods, franchises, licenses, trade secrets, confidential
information, proprietary processes and technology, data bases, licenses, computer software (other than commercially available off-the-shelf third party software), source codes, inventions, discoveries, technical advances, and any manual, formulae
and/or documentation constituting, describing or related to the foregoing. 
 “Intercompany Debt” means Indebtedness owed by
either Proton or TD to the Seller, or by the Seller to either Proton or TD. 
 “Investment Bank” means Allen &
Company. 
 “IPO Litigation” has the meaning set forth in Section 4.2(y)(v)(3). 
 “Knowledge” of Seller, Proton or TD means the actual knowledge (as of the date(s) of the relevant representation) of Bernard H. Cherry,
Interim Chief Executive Officer of Seller, Peter J. Tallian, Chief Financial Officer of the Seller and Robert Friedland, President and Chief Operating Officer of Proton. 
 “Lease” means each of the leases for the occupancy of the Wallingford Property, together with all of Proton’s right, title and interest of whatever type or nature thereunder, including without
limitation, all occupancy and possessory rights, and all rights to 

  

 4 

 
leasehold improvements, guarantees, insurance proceeds (exclusive of deductibles or self-insured retention amounts) credits, prepaid expenses, security
deposits, subrent, refunds, escrow accounts, condemnation rights and awards and all proceeds therefrom, reciprocal easement agreements, nondisturbance agreements, development and other ancillary agreements relating to such leases, and all other
interests of Proton thereunder. 
 “Liability” means any and all direct or indirect Indebtedness, losses, claims or
responsibilities, whether known or unknown, accrued or fixed, absolute or contingent, matured or unmatured, secured or unsecured or determined or determinable, whether or not of a kind required by GAAP to be set forth on a financial statement,
including (but not limited to) those arising under any Applicable Law and those arising under any Contract or otherwise, including, without limitation, (a) trade payables, accrued expenses and intercompany liabilities arising in accordance with
customary practices and in the ordinary course of business, and (b) prepaid or deferred revenue arising in accordance with customary practices and in the ordinary course of business. 
 “Material Adverse Effect” means with respect to Proton, any change, development or event that has or could reasonably be expected to
have, individually or in the aggregate, a material adverse effect on the operations, business, prospects, properties or condition (financial or otherwise) of Proton other than any change, development or event resulting from, arising out of or
relating to (i) any act or omission of Proton taken with the prior written consent of the Purchaser, (ii) changes affecting Proton’s industry generally that do not materially and disproportionately adversely affect the Business as
compared to other companies providing similar products to those of Proton, (iii) changes in the United States economy that do not materially and disproportionately adversely affect the Business as compared to other companies providing similar
products to those of Proton, or (iv) any action approved by the Bankruptcy Court. 
 “Material Contracts” has the
meaning set forth in Section 4.2(n). 
 “Net Working Capital” has the meaning set forth in Section 3.7(a).

 “Permitted Encumbrances” means: (i) Encumbrances for Taxes and other governmental charges and assessments that are
not yet due and payable; (ii) Encumbrances of landlords and encumbrances of carriers and warehousemen and other similar Encumbrances arising in the ordinary course of business; (iii) all written leases, subleases, licenses and occupancy
and/or use agreements affecting any real property (or any portion thereof); (iv) any state of facts as shown on the Surveys, in form and substance reasonably acceptable to the Purchaser, provided the same does not render title unmarketable;
(v) Encumbrances, easements, rights-of-way, covenants, conditions, restrictions and other matters affecting title to real property which do not materially detract from the value of such real property or materially restrict (or otherwise
materially interfere with) the use of such real property, in each case, based on the current use of 

  

 5 

 
such property and, and in each case, which does not secure any obligations to make payment and (vi) those matters shown as exceptions on any existing
title policy for the Wallingford Property, a copy of which has been provided to the Purchaser, and any title commitment for the Wallingford Property obtained by Purchaser, which are reasonably acceptable to the Purchaser. 
 “Permits” means all licenses, certifications, approvals, registrations, consents, authorizations, franchises, qualifications, variances,
exemptions, certificates of occupancy and other permits, consents, notices and approvals required by any Governmental Authority (including any pending applications for such licenses, certifications, approvals, registrations, consents,
authorizations, franchises, qualifications, variances, exemptions, certificates of occupancy and other permits, consents, notices and approvals). 
 “Perseus” shall mean Perseus Partners VII, L.P. 
 “Person” means any individual, partnership,
joint venture, firm, corporation, limited liability company, association, trust or other enterprise, or any Governmental Authority or other government or political subdivision or any agency, department or instrumentality thereof. 
 “Proceeding” means any civil, criminal or administrative action, suit, lawsuit, customer claim, warranty claim, insurance claim,
counterclaim, hearing, investigation, cease and desist letter, notice of breach, notice of violation or other proceeding at law, or in equity, or by or before any Governmental Authority. 
 “Proton Intellectual Property” has the meaning set forth in Section 4.2(w). 
 “Reference Statement” has the meaning set forth in Section 3.7(a). 
 “Reimbursable Expenses” means the legal, accounting, consulting and other out-of-pocket fees and expenses, including financing
commitment fees and expenses, incurred by the Purchaser or on its behalf by its Affiliates or Representatives (including fees and expenses or legal counsel and other advisors) in connection with the due diligence, preparation, negotiation, execution
and consummation of the transactions contemplated by this Agreement. 
 “Release” means any release, spill, emission,
discharge, leaking, pumping, pouring, dumping, injection, deposit, disposal, dispersal, leaching or migration of Hazardous Substances on, above, under, onto, in or into a facility or the environment (including, ambient air, surface water,
groundwater and surface or subsurface strata). 
  

 6 

 “Representatives” means, with respect to any Person, such Person’s directors,
managers, officers, employees, Affiliates, consultants, accountants, attorneys, investment bankers, agents and advisors. 
 “Sale
Procedures” means the procedures for the submission of competing bids for the acquisition of the Shares. 
 “Sale Procedures
Motion” means the motion to be filed in the Bankruptcy Court on behalf of the Seller for, among other things, approval of the Sale Procedures, Break-Up Fee and Expense Reimbursement Fee and entry of the Approval Order. 
 “Sale Procedures Order” means the order to be entered by the Bankruptcy Court substantially in the form attached hereto as Exhibit B.

 “Seller’s Ancillary Documents” has the meaning set forth in Section 4.2(b). 
 “Shares” has the meaning set forth in the Recitals. 
 “Subsidiary” means, with respect to any Person (the “Owner”), any corporation or other Person of which securities or other interests having the power to elect a majority of that
corporation’s or other Person’s board of directors or similar governing body, or otherwise having the power to direct the business and policies of that corporation or other Person (other than securities or other interests having such power
only upon the happening of a contingency that has not occurred) are held by the Owner or one or more of its Subsidiaries; when used without reference to a particular Person, “Subsidiary” means a Subsidiary of Proton. 
 “Taxes” means (i) any and all federal, state, local, foreign or other taxes of any kind imposed by any Tax authority, including,
taxes, fees, duties, levies, customs, tariffs, imposts, assessments, obligations or other similar charges of any kind on or with respect to income, franchises, premiums, windfall or other profits, gross receipts, property, sales, use, transfer,
capital stock, payroll, employment, social security, workers’ compensation, unemployment compensation or net worth, and taxes or other similar charges of any kind in the nature of excise, withholding, ad valorem or value added; (ii) all
interest, penalties, fines, additions to tax or additional amounts imposed by any Tax authority in connection with any item described in clause (i); and (iii) any Liability in respect of any items described in clauses (i) or
(ii) payable by reason of Contract, assumption, transferee liability, operation of Law or Treasury Regulation Section 1.1502-6 (or any predecessor or successor provisions thereof and any similar provision of state, local or foreign Law).

 “TD” means Technology Drive, LLC, a Connecticut limited liability company. 
 “Wallingford Property” means that certain parcel of land and improvements thereon located at 10 Technology Drive, Wallingford,
Connecticut. 
  

 7 

 Section 1.2. Accounting terms not defined in subsection 1.01 and accounting terms partly defined in
subsection 1.01, to the extent not defined, shall have the respective meanings given to them under GAAP. 
 ARTICLE II 
 Purchase and Sale of Shares 
 Section 2.1. Agreement to Purchase and Sell. On the terms and subject to the conditions contained in this Agreement, Purchaser agrees to purchase from Seller, and Seller agrees to sell to Purchaser, all of Seller’s right,
title and interest in and to the Shares. The Shares shall be sold to Purchaser free and clear of any and all liens, claims (as claim is defined in Section 101(5) of the Bankruptcy Code) and Encumbrances of whatever kind or nature, including but
not limited to security interests, mortgages, pledges, charges, suits, licenses, options, rights of recovery, judgments, rights of first refusal, orders and decrees of any court or foreign or domestic governmental entity, interest, tax, covenants,
restrictions, indentures, instruments, leases, options, contracts, agreements, claims for reimbursement, contribution, indemnity or exoneration, successor, product, environmental, taxes, labor, alter ego and other liabilities (collectively,
“Claims”). 
 ARTICLE III 
 Purchase Price; Manner of Payment and Closing 
 Section 3.1. Consideration. Subject to
adjustment in accordance with Sections 4.3 and 3.7 hereof, the purchase price (the “Purchase Price”) for the Shares shall be Nine Million Two Hundred Thousand Dollars ($9,200,000.00), which Purchaser agrees to pay on the Closing Date. The
Purchaser agrees to pay the Purchase Price in the manner described in Section 3.3 below. 
 Section 3.2. Time and Place of the
Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at 10:00 a.m., Eastern Standard Time, at the offices of Cole, Schotz, Meisel, Forman & Leonard, P.A., Court Plaza North,
25 Main Street, Hackensack, New Jersey, two (2) Business Days after all of the conditions set forth in Section 6 have been satisfied or waived (or such longer period after such conditions have been satisfied as may be required by the
Approval Order under the provisions of the Federal Rules of Bankruptcy Procedure 6004(g) or 6006(d)). The date on which the Closing occurs in accordance with the foregoing and effective upon payment of the Purchase Price is referred to in this
Agreement as the “Closing Date.” 
 Section 3.3. Manner of Payment of the Consideration. Contemporaneous with the
execution of this Agreement, Purchaser shall deliver to Seller’s counsel, Cole, 

  

 8 

 
Schotz, Meisel, Forman & Leonard, P.A. (“Cole Schotz”), a good faith deposit in the amount of Nine Hundred Twenty Thousand Dollars
($920,000.00) which amount represents ten percent (10%) of the Purchase Price (the “Deposit”), to be held by Cole Schotz in escrow in an interest-interest bearing account subject to the terms hereof. At the Closing, Purchaser shall
authorize the release of the Deposit to Seller and pay the balance of the Purchase Price by wire transfer of Eight Million Two Hundred Eighty Thousand ($8,280,000.00) Dollars, as that amount may need to be adjusted as a result of the adjustment to
the Purchase Price pursuant to Section 3.7(a), reduced by the amount of all interest earned on the Deposit, in immediately available funds to an account designated by Seller, which Seller shall designate by written notice delivered to Purchaser
not later than two (2) days prior to the Closing Date. 
 Section 3.4. Closing Deliveries. At the Closing: 
 (a) Seller shall execute and deliver to Purchaser a stock power duly endorsed in blank and the original stock certificate for the Shares, and such other
assignments and other instruments of transfer and conveyance, in form and substance reasonably satisfactory to Purchaser’s counsel, as shall be effective, together with the Approval Order, to vest in Purchaser as of the Closing Date good title,
free and clear, in accordance with the terms of the Approval Order, of any Claims and Encumbrances to the Shares as provided herein and in the Approval Order; 
 (b) In addition to the foregoing, there shall be executed and delivered at the Closing the following: 
 (i)
by Seller to Purchaser, a certificate, dated the Closing Date and signed by Seller’s President, Chief Executive Officer, Chief Operating Officer or Chief Financial Officer, certifying that the representations and warranties of Seller contained
in Section 4.2 are accurate and complete both when made and at and as of the Closing Date with the same effect as though made at and as of such time and that all covenants required by the terms hereof to be performed by Seller on or before the
Closing Date, to the extent not waived by Purchaser in writing, have been so performed in all material respects (or, if any such covenant has not been so performed, indicating that such covenant has not been performed); 
 (ii) by Seller to Purchaser, a certificate, dated the Closing Date and signed by Seller’s President, Chief Executive Officer, Chief Operating
Officer or Chief Financial Officer attaching (A) a certified copy of the resolutions of the Board of Directors of Seller authorizing the execution, delivery and performance of this Agreement and all documents associated herewith; and (B) a
certified copy of the organizational documents of Seller and all amendments thereto; 
  

 9 

 (iii) by Purchaser to Seller, a certificate, dated the Closing Date and signed by Purchaser’s
President or Chief Executive Officer, certifying that the representations and warranties of Purchaser contained in Section 4.1 are accurate and complete both when made and at and as of the Closing Date with the same effect as though made at and
as of such time and that all covenants required by the terms hereof to be performed by Purchaser on or before the Closing Date, to the extent not waived by Seller in writing, have been so performed in all material respects (or, if any such covenant
has not been so performed, indicating that such covenant has not been performed); 
 (iv) by Purchaser to Seller, a certificate, dated the
Closing Date and signed by Purchaser’s President or Chief Executive Officer, attaching (A) a certified copy of the resolutions of the Board of Directors of Purchaser authorizing the execution, delivery and performance of this Agreement and
all documents associated herewith; and (B) a certified copy of the organizational documents of Purchaser and all amendments thereto; 
 (v) by Purchaser to Seller, a Form III or IV as defined in the Connecticut Transfer Act executed by the Purchaser as the “certifying party” (as defined in the Connecticut Transfer Act), unless Seller covenants and represents
that the Connecticut Transfer Act does not apply to the transactions contemplated by this Agreement, or the Seller is able to file a Form I or II (as defined in the Connecticut Transfer Act); 
 (vi) by Seller to Purchaser, a certificate, dated the Closing Date and signed by Seller’s President, Chief Executive Officer, Chief Operating
Officer or Chief Financial Officer, certifying that Connecticut Innovations, Inc. (“CII”), acting on behalf of the Connecticut Clean Energy Fund (“CCEF”), or CCEF itself, has (A) consented to the transactions contemplated by
this Agreement and agreed to waive any rights that it may have under the Financial Assistance Agreement, any Program Participation Agreement or any other agreement between Proton and CII or CCEF with respect to acceleration, default or termination
solely by reason of this Agreement and the Closing of the transactions contemplated by this Agreement; and (B) executed a modification to each Financial Assistance Agreement, any Program Participation Agreement or any other agreement between
Proton and CII or CCEF containing in substance the provisions set forth on Schedule 3.4(vi) in such form as Purchaser shall, in its reasonable discretion, require; and 
 (vii) Seller shall have assigned to Proton any and all agreements entered into in connection with or as part of any “Small Business Innovative Research Grants,” a list of which is attached hereto as Schedule
3.4(vii). 
  

 10 

 Section 3.5. Transfer Taxes. The transfer of the Shares is a transfer pursuant to
Section 1146 of the Bankruptcy Code, and, therefore, the making, delivery, filing and recording of various instruments of transfer to be recorded in connection with the sale by Seller of the Shares to Purchaser shall not be taxed under any law
imposing a recording tax, stamp tax, transfer tax or similar tax. To the extent that such a tax is assessed, however, notwithstanding any other provision of this Agreement, all transfer, registration, stamp, documentary, sales, use and similar taxes
(including, but not limited to, all applicable real estate transfer or gains taxes), any penalties, interest and additions to tax, and court, registration and filing fees incurred in connection with this Agreement shall be the responsibility of and
be timely paid by Purchaser. Seller and Purchaser shall cooperate in the timely making of all filings, returns, reports and forms as may be required in connection therewith. 
 Section 3.6. Prorations. Rent, current taxes, prepaid advertising and other items of expense (including, without limitation, any prepaid
insurance) shall be prorated between Seller and Purchaser as of the Closing Date with respect to the Wallingford Property. All obligations due in respect of periods prior to the Closing Date shall be paid in full or otherwise satisfied by Seller
(including but not limited to costs relating to curing breaches of contracts where the breach occurred prior to the Closing Date), and all obligations due in respect of periods after from and after the Closing Date with respect to the Wallingford
Property shall be paid in full or otherwise satisfied by Purchaser. Rent shall be prorated on the basis of a thirty (30) day month. Purchaser shall pay to Seller in cash on the Closing Date the amount of any security or similar deposits with
respect to the Wallingford Property. 
  

 11 

 Section 3.7. Purchase Price Adjustment. 
 (a) No later than the third (3rd) Business Day prior to the Closing Date, Seller shall deliver to Purchaser an Estimated Closing Statement (the “Seller Closing Statement”), setting forth
Seller’s estimated calculation of Proton’s Net Working Capital as of the end of business on the Closing Date (“Closing Working Capital”). “Net Working Capital” means, as shown on the unaudited combined balance sheet of
Proton and TD as at any date, the difference between (i) Total Current Assets (excluding cash and cash equivalents and any intercompany accounts receivable) and (b) Total Current Liabilities (excluding any intercompany accounts payable).
The preparation of the Seller Closing Statement shall be for the sole purpose of determining changes in Proton’s Net Working Capital from March 31, 2008 (the “Reference Date”) to the Closing Date. Attached hereto as
Schedule 3.7(a)(i) is a schedule showing Net Working Capital as of the Reference Date (“Reference Statement”). The Reference Statement has been prepared by Seller from the Interim Balance Sheet. If the Estimated Closing
Statement indicates that the Net Working Capital as of the Reference Date exceeds the Closing Working Capital, the amount of the Purchase Price to be paid at the Closing shall be reduced by the amount of such excess. From the amount of the Purchase
Price paid at the Closing as adjusted pursuant to the provisions of this Section 3.7(a), the Seller shall escrow with the Seller’s counsel $200,000 (the “Escrowed Proceeds”) to be held for the payment of additional amounts, if
any, that may be payable by Seller to Purchaser upon determination of the Final Working Capital. Either the Seller or the Purchaser shall have the right to apply to the Bankruptcy Court to increase or decrease the amount of the Escrowed Proceeds.

 (b) As promptly as practicable, but no later than thirty (30) days after the Closing Date, Purchaser shall cause to be prepared and
delivered to Seller its calculation of the Closing Working Capital (the “Purchaser Closing Statement”). If Seller disagrees with Purchaser’s calculation of Closing Working Capital shown on the Purchaser Closing Statement, Seller may,
within ten (10) Business Days after delivery of the Purchaser Closing Statement, deliver a notice to Purchaser disagreeing with such calculation and setting forth Seller’s calculation of such amount. Any such notice of disagreement shall
specify those items or amounts as to which Seller disagrees, and Seller shall be deemed to have agreed with all other items and amounts contained in the Purchaser Closing Statement and the Purchaser’s calculation of Closing Working Capital
shown in the Purchaser Closing Statement. 
 (c) If a notice of disagreement shall be duly delivered pursuant to Section 3.7(b), Seller
and Purchaser shall, during the ten (10) business days following such delivery, use their commercially reasonable efforts to reach agreement on the disputed items or amounts in order to determine, as may be required, the amount of 

  

 12 

 
Closing Working Capital. If during such period, Seller and Purchaser are unable to reach such agreement, they shall promptly thereafter cause a mutually
agreeable nationally recognized accounting firm (or, if the Purchaser and the Seller are not able to identify such a mutually agreeable nationally recognized accounting firm, a firm selected by the Bankruptcy Court (such firm being herein called the
“Accounting Referee”) to review this Agreement and the disputed items or amounts for the purpose of calculating Closing Working Capital (it being understood that in making such calculation, the Accounting Referee shall be functioning as an
expert and not as an arbitrator). In making such calculation, the Accounting Referee shall consider only those items or amounts in the Purchaser Closing Statement as to which Seller has disagreed. The Accounting Referee shall deliver to Seller and
Purchaser, as promptly as practicable (but in any case no later than ten (10) days from the date of engagement of the Accounting Referee), a report setting forth such calculation. Such report shall be final and binding upon Seller and
Purchaser. The cost of such review and report shall be borne equally by Seller, on the one hand, and Purchaser, on the other hand. 
 (d)
Seller and Purchaser shall, and shall cause their respective representatives to, cooperate and assist in the calculation of Closing Working Capital and in the conduct of the review referred to in Section 3.7(c), including, without limitation,
the making available to the extent necessary of books, records, work papers and personnel. 
 (e) If Final Working Capital exceeds Net
Working Capital as of the Reference Date, Purchaser shall pay to Seller, in the manner and with interest as provided in Section 3.7(f), the amount of such excess, plus the amount, if any, by which the amount of the Purchase Price paid at
Closing may have been reduced pursuant to Section 3.7(a) and the Escrowed Proceeds shall be released to the Seller. If Net Working Capital as of the Reference Date exceeds Final Working Capital, Seller shall pay to Purchaser, as an adjustment
to the Purchase Price, the amount of such excess, less the amount by which the amount of the Purchase Price paid at Closing may have been reduced pursuant to Section 3.7(a), in the manner and with interest as provided in Section 3.7(f).
The funds for the payment of any such amount by Seller to Purchaser, shall be paid to the extent thereof from the Escrowed Proceeds with any amount payable in excess thereof to be payable from the Seller’s funds. If the amount of such payment
due to the Purchaser is less than the amount of the Escrowed Proceeds, the remaining amount of the Escrowed Proceeds shall be released to the Seller. “Final Working Capital” means Closing Working Capital (i) as shown on the Purchaser
Closing Statement, if no notice of disagreement with respect thereto is duly delivered pursuant to Section 3.7(b); or (ii) if such a notice of disagreement is delivered, (A) as agreed by Seller and Purchaser pursuant to
Section 3.7(c), or (B) in the absence of such agreement, as shown in the Accounting Referee’s calculation delivered pursuant to Section 3.7(c); provided, however, that in no event shall Final Working Capital be less
than the Purchaser’s calculation of Closing Working Capital delivered pursuant to Section 3.7(b) or more than the Seller ‘s calculation of Closing Working Capital delivered pursuant to Section 3.7(a). 
  

 13 

 (f) Any payment pursuant to Section 3.7(e) shall be made at a mutually convenient time and place
within five (5) days after Final Working Capital has been determined by wire transfer by Purchaser or Seller, as the case may be, of immediately available funds to the account of such other party as may be designated in writing by such other
party. The amount of any payment to be made pursuant to this Section 3.7(e) shall bear interest from and including the Closing Date to but excluding the date of payment at a rate per annum equal to the rate of interest published from time to
time by The Wall Street Journal as the “prime rate” at large U.S. money center banks during the period from the Closing Date to the date of payment. Such interest shall be payable at the same time as the payment to which it relates
and shall be calculated daily on the basis of a year of three hundred sixty five (365) days and the actual number of days elapsed. 
 ARTICLE IV 
 Representations and Warranties 
 Section 4.1. Purchaser’s Representations and Warranties. Purchaser represents and warrants to Seller that: 
 (a) Organization. Purchaser is a New York corporation validly existing and in good standing under the laws of the jurisdiction of its organization.
Purchaser is duly qualified and in good standing in each jurisdiction in which the nature of its business requires it to be so qualified. 
 (b) Power and Authority. Purchaser has full power and authority to enter into and perform this Agreement and all documents and instruments to be executed by Purchaser pursuant to this Agreement. The execution and delivery of this
Agreement by Purchaser, and the performance by Purchaser of all of its obligations hereunder, have been duly authorized and approved prior to the date hereof by all necessary corporate action. This Agreement has been duly executed and delivered by
Purchaser and constitutes its legal, valid and binding agreement, enforceable against it in accordance with its terms. 
 (c)
Consents. Except for the Court’s entry of the Approval Order, no consent, authorization, order or approval of, or filing or registration with, any governmental authority or other person is required for the execution and delivery by
Purchaser of this Agreement and the consummation by Purchaser of the transactions contemplated by this Agreement. 
  

 14 

 (d) Conflicts. Neither the execution and delivery of this Agreement by Purchaser, nor the
consummation by Purchaser of the transactions contemplated hereby, will conflict with or result in a breach of any of the terms, conditions or provisions of the certificate of incorporation or by laws of Purchaser, or of any agreement or instrument
to which Purchaser is a party or any of its properties is subject or bound or any statute or administrative regulation, or of any order, writ, injunction, judgment or decree of any court or governmental authority or of any arbitration award that is
binding upon Purchaser. 
 (e) Brokers. Except for the Investment Bank, whose fees will be paid by Seller in accordance with
Bankruptcy Court orders, Purchaser has not dealt with any person or entity who is or may be entitled to a broker’s commission, finder’s fee, investment banker’s fee or similar payment from Seller for arranging the transactions
contemplated hereby or introducing the parties to each other. 
 (f) Funding. Purchaser has sufficient capital to fund the Purchase
Price. As of the Closing, Purchaser shall have sufficient cash on hand to pay the Purchase Price and to make all other necessary payments of fees and expenses in connection with the transactions contemplated by this Agreement. 
 (g) Independent Investigation. Neither the Seller nor any of its Affiliates nor any other Person has made any representation or warranty, express
or implied, as to the accuracy or completeness of any information regarding Proton, the Business, the Wallingford Property, or the transactions contemplated by this Agreement not expressly set forth in this Agreement or in any of the Seller’s
Ancillary Documents, and neither the Seller, any of its Affiliates nor any other Person will have or be subject to any liability to Purchaser or any other Person resulting from the distribution to Purchaser or its representatives or the use by
Purchaser or any of its Affiliates of, any such information, including any confidential memoranda distributed on behalf of Seller relating to Proton, the Business, the Wallingford Property or other publications or data room information provided to
Purchaser or its representatives, or any other document or information in any form provided to Purchaser or its representatives in connection with the sale of the Shares and the transactions contemplated hereby. Purchaser acknowledges that it, along
with its representatives, has conducted or, as of the Closing Date, will have conducted, to its satisfaction, its own independent investigation of Proton, the Business, the Wallingford Property, including, without limitation, the physical and
environmental condition of the Wallingford Property, and in making the determination to proceed with the transactions contemplated by this Agreement, Purchaser has, or will have, relied on the results of its own independent investigation.

 (h) “AS IS” SALE. PURCHASER HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN SECTION 4.2
BELOW (AND ON THE SCHEDULES ATTACHED 

  

 15 

 
HERETO) AND THE SELLER’S ANCILLARY DOCUMENTS, SELLER MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY MATTER
RELATING TO PROTON, THE WALLINGFORD PROPERTY, INCLUDING, WITHOUT LIMITATION, INCOME TO BE DERIVED OR EXPENSES TO BE INCURRED IN CONNECTION WITH THE BUSINESS OR THE WALLINGFORD PROPERTY (OR ANY PORTION THEREOF), THE VALUE OF PROTON, THE WALLINGFORD
PROPERTY (OR ANY PORTION THEREOF), THE TRANSFERABILITY OF THE SHARES, TITLE TO THE SHARES OR THE WALLINGFORD PROPERTY (OR ANY PORTION THEREOF), OR ANY OTHER MATTER OR THING RELATING TO THE BUSINESS OR THE WALLINGFORD PROPERTY (OR ANY PORTION
THEREOF), INCLUDING, WITHOUT LIMITATION, THE PERMITTED USE, THE STRUCTURAL CONDITION OR THE ENVIRONMENTAL CONDITION OF THE WALLINGFORD PROPERTY. WITHOUT IN ANY WAY LIMITING THE FOREGOING, SELLER HEREBY DISCLAIMS ANY WARRANTY, EXPRESS OR IMPLIED, OF
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE AS TO ANY PORTION OF THE ASSETS OF PROTON AND THE WALLINGFORD PROPERTY. PURCHASER FURTHER ACKNOWLEDGES THAT PURCHASER HAS CONDUCTED AN INDEPENDENT INSPECTION AND INVESTIGATION OF THE PHYSICAL AND
ENVIRONMENTAL CONDITION OF THE ASSETS OF PROTON AND THE WALLINGFORD PROPERTY, AND ALL SUCH OTHER MATTERS RELATING TO OR AFFECTING THE ASSETS OF PROTON AND THE WALLINGFORD PROPERTY AS PURCHASER DEEMED NECESSARY OR APPROPRIATE AND THAT IN PROCEEDING
WITH ITS ACQUISITION OF THE SHARES AND THE CLOSING CONTEMPLATED UNDER THIS AGREEMENT, EXCEPT FOR ANY REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN SECTION 4.2 (AND ON THE SCHEDULES ATTACHED HERETO) AND THE SELLER’S ANCILLARY DOCUMENTS,
PURCHASER IS DOING SO BASED SOLELY UPON SUCH INDEPENDENT INSPECTIONS AND INVESTIGATIONS. ACCORDINGLY, EXCEPT FOR ANY REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN SECTION 4.2 (AND ON THE SCHEDULES ATTACHED HERETO) AND THE SELLER’S
ANCILLARY DOCUMENTS, PURCHASER WILL ACQUIRE PROTON, AND ITS ASSETS, INCLUDING THE WALLINGFORD PROPERTY, AT THE CLOSING “AS IS,” “WHERE IS,” AND “WITH ALL FAULTS.” 
 Section 4.2. Seller’s Representations and Warranties. Seller represents and warrants to Purchaser that: 
 (a) Organization. 
 (i) Seller is a
Delaware corporation, validly existing and in good standing under the laws of the State of Delaware. Proton is duly qualified and in 

  

 16 

 
good standing in each jurisdiction in which the nature of its business requires it to be so qualified, except where the failure to be so qualified could not
reasonably be expected to have a Material Adverse Effect. Schedule 4.2(a) contains a true and complete list of each jurisdiction where Proton is qualified to do business. Proton has all requisite corporate power and authority to own, lease
and operate the Business, to carry on the Business as presently conducted. 
 (ii) TD is a Connecticut limited liability company, validly
existing and in good standing under the laws of the State of Connecticut. TD is not required to be qualified to do business in any jurisdiction except the State of Connecticut. TD has all requisite limited liability company power and authority to
own, lease and operate its business, to carry on its business as presently conducted. 
 (b) Power and Authority. Subject to the
Court’s entry of the Approval Order, Seller has full power and authority to enter into and perform this Agreement and all documents, agreements and instruments to be executed by Seller pursuant to or in connection with this Agreement
(collectively, the “Seller’s Ancillary Documents”). The execution and delivery by Seller of this Agreement and Seller’s Ancillary Documents, and the performance by Seller of all of its obligations hereunder and thereunder, have
been duly authorized and approved prior to the date hereof by all necessary corporate action. This Agreement has been, and Seller’s Ancillary Documents will be, duly executed and delivered by duly authorized officers of Seller. Subject to the
Court’s entry of the Approval Order, this Agreement constitutes, and each of the Seller’s Ancillary Documents upon execution thereof, will constitute, a valid and binding obligation of the Seller, enforceable against the Seller in
accordance with its terms, except as such enforcement may be limited by (i) the effect of bankruptcy, insolvency, reorganization, receivership, conservatorship, arrangement, moratorium or other laws affecting or relating to the rights of
creditors generally, or (ii) the rules governing the availability of specific performance, injunctive relief or other equitable remedies and general principles of equity, regardless of whether considered in a proceeding in equity or at law.

 (c) Capitalization. 
 (i) Proton’s authorized capital stock consists of 100,000,000 shares of common stock, par value $.01 per share (the “Common Stock”) and 5,000,000 shares of Preferred Stock, $.01 par value (the “Preferred Stock”). As
of the date hereof, 1,000 shares of the Common Stock are issued and outstanding, all of which are owned of record and beneficially by the Seller. No shares of Preferred Stock are outstanding. The Shares have been validly issued and are fully paid
and non-assessable, and, except as set forth on Schedule 4.2(c)(i), are owned by the Seller free and clear of all Encumbrances. 
  

 17 

 (ii) Except as set forth Schedule 4.2(c)(ii), the Shares are not subject to any other Contract
restricting or otherwise relating to the voting, dividend rights or disposition of such Shares. The Shares are not subject to, or issued in violation of, any purchase option, call option, right of first refusal, preemptive right, subscription right
or any similar right under any Applicable Law, organizational document or Contract to which the Seller is a party to or otherwise bound. Except as set forth on Schedule 4.2(c)(ii), there are no options, warrants, rights, convertible or
exchangeable securities, appreciation rights, “phantom” securities rights, Contracts or undertakings of any kind to which Proton is a party to or by which Proton is bound that: (i) obligate Proton to issue, deliver or sell, or cause
to be issued, delivered or sold, any securities; (ii) obligate Proton to issue, grant, extend or enter into, as applicable, any such option, warrant call, security, commitment or Contract; or (iii) give any Person the right to receive any
economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of such securities. There are no outstanding obligations arising under any Contract of Proton to repurchase, redeem or otherwise acquire any
securities of Proton. 
 (iii) Proton is the sole member of TD, and is the record and beneficial owner of the entire equity interest of TD
(the “TD Equity Interest”) free and clear of all Encumbrances. The TD Equity Interest owned by Proton is not subject to any other Contract restricting or otherwise relating to the voting, dividend rights or disposition of the TD Equity
Interest. The TD Equity Interest is not subject to, or issued in violation of, any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any Applicable Law, organizational document or
Contract to which the Seller or Proton is a party to or otherwise bound. Except as set forth on Schedule 4.2(c)(iii), there are no options, warrants, rights, convertible or exchangeable securities, appreciation rights, “phantom”
securities rights, Contracts or undertakings of any kind to which TD is a party to or by which TD is bound that: (i) obligate TD to issue, deliver or sell, or cause to be issued, delivered or sold, any securities; (ii) obligate TD to
issue, grant, extend or enter into, as applicable, any such option, warrant call, security, commitment or Contract; or (iii) give any Person the right to receive any economic benefit or right similar to or derived from the economic benefits and
rights occurring to holders of such securities. There are no outstanding obligations arising under any Contract of TD to repurchase, redeem or otherwise acquire any securities of TD. 
 (d) Subsidiaries. Except for TD, Proton does not own any Subsidiary and Proton does not otherwise own or control, directly or indirectly, any
equity or voting interest in, or other securities of, any Person, nor has Proton made any commitment or subscribed for the purchase of any such equity or voting interest or other securities. 
 (e) Consents; Conflicts. Except for the Court’s entry of the Approval Order and the consents set forth on Schedule 4.2(e) attached
hereto which shall 

  

 18 

 
be obtained by Seller prior to the Closing, no consent, authorization, order or approval of, or filing or registration with, any governmental authority or
other person or entity not furnished at or prior to Closing is required for the execution and delivery of this Agreement and Seller’s Ancillary Documents and the consummation by Seller of the transaction contemplated by this Agreement and
Seller’s Ancillary Documents. Except as noted above, neither the execution and delivery by Seller of this Agreement and Seller’s Ancillary Documents, nor the consummation by Seller of the transactions contemplated hereby and thereby, will
conflict with or result in a breach of any of the terms, conditions or provisions of any agreement or instrument to which Seller, Proton or TD is a party or of any order, writ, injunction, judgment or decree of any court or any governmental
authority or of any arbitration award, in each case to which Seller, Proton or TD is subject or by which Seller, Proton or TD is bound. 
 (f) Litigation. Except as set forth on Schedule 4.2(f) attached hereto, there is no litigation or proceeding, in law or in equity or by any Governmental Authority, pending against Seller, Proton or TD or, to Seller’s or
Proton’s Knowledge, threatened against Seller, Proton or TD. 
 (g) Brokers. Except for the Investment Bank, whose fees will be
paid by Seller, Seller has not dealt with any person or entity who is or may be entitled to a broker’s commission, finder’s fee, investment banker’s fee or similar payment from Purchaser for arranging the transaction contemplated
hereby or introducing the parties to each other. 
 (h) Financial Statements. Seller has delivered to Purchaser: (a) unaudited
combined balance sheets of Proton and TD as at December 31 for each of the years 2005 through 2007 (the combined balance sheet of Proton and TD as at December 31, 2007 being herein called the “Balance Sheet”) , and the related
unaudited combined statement of income, and (b) an unaudited combined balance sheet of Proton and TD as at March 31, 2008 (the “Interim Balance Sheet”) and the related unaudited combined statement of income. Such financial
statements fairly present the financial condition and results of operations of Proton and TD as at their respective dates of and for the periods referred to in such financial statements, all in accordance with GAAP, subject, in the case of the
interim financial statements, to normal recurring yearend adjustments (the effect of which will not, individually or in the aggregate, be materially adverse) and the absence of notes. The financial statements referred to in this Section 4.2(h)
reflect the consistent application of such accounting principles throughout the periods involved. No financial statements of any Person other than Proton and TD are required by GAAP to be included in the combined financial statements of Proton and
TD. 
 (i) No Undisclosed Liabilities; Conduct of Business. Except as set forth in Schedule 4.2(i) or as otherwise disclosed pursuant
to any other Schedule of Seller attached to the this Agreement, neither Proton nor TD has any liability or 

  

 19 

 
obligation of any nature, including any liability or obligation arising pursuant to any Material Contract (whether known or unknown and whether absolute,
accrued, contingent, or otherwise) except for liabilities or obligations reflected or reserved against in the Balance Sheet or the Interim Balance Sheet and current liabilities incurred in the Ordinary Course of Business since the respective dates
thereof. Since March 31, 2008, Proton has conducted the Business in the ordinary course of business consistent with past practice and there has not been any event, occurrence, development or state of circumstances or facts which, individually
or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect. 
 (j) Inventory. All inventory of
Proton, whether or not reflected in the Balance Sheet or the Interim Balance Sheet, consists of a quality and quantity usable and salable in the ordinary course of business, except for obsolete items and items of below-standard quality, all of which
have been written off or written down to net realizable value in the Balance Sheet or the Interim Balance Sheet on the accounting records of Proton as of the Closing Date, as the case may be. All inventories not written off have been priced at the
lower of cost or net realizable value on a first in, first out basis. 
 (k) Accounts Receivable. Except with respect to any accounts
receivable that constitute Intercompany Debt of Seller, all accounts receivable of Proton that are reflected on the Balance Sheet or the Interim Balance Sheet or on the accounting records of Proton as of the Closing Date (collectively, the
“Accounts Receivable”) represent or will represent valid obligations arising from sales actually made or services actually performed in the Ordinary Course of Business. Except with respect to any accounts receivable that constitute
Intercompany Debt of Seller, unless paid prior to the Closing Date, Seller has no reason to believe that the Accounts Receivable will not be as of the Closing Date collectible net of the respective reserves shown on the Balance Sheet or the Interim
Balance Sheet or on the accounting records of Proton as of the Closing Date (which reserves are adequate and calculated consistent with past practice). There is no contest, claim, or right of set-off, other than returns in the Ordinary Course of
Business, under any Contract with any obligor of an Accounts Receivable relating to the amount or validity of such Accounts Receivable. Schedule 4.2(k) contains a complete and accurate list of all Accounts Receivable as of the date of the Interim
Balance Sheet, which list sets forth the aging of such Accounts Receivable. 
 (l) Compliance with Law. Except as set forth on
Schedule 4.2(l), Proton and TD have complied in all respects with, the Wallingford Property is in compliance with, and neither Proton nor TD is currently in violation or default in any material respect of, any Applicable Law relating to the
Business, or as currently proposed to be conducted. Neither Proton nor TD has been charged with or received notice of, and neither is aware of, any material violation of or material non-compliance with any Applicable Law. 
  

 20 

 (m) Permits. Schedule 4.2(m) sets forth a true and complete list of all Permits maintained
by Proton and TD for the conduct of the Business. Except for the Permits listed on Schedule 4.2(m), no Permit is required by Proton or TD for the conduct of the Business as presently conducted, except where the failure to have such Permit would not
have a Material Adverse Effect. Except as set forth on Schedule 4.2(m), Proton and TD have been and each of them is in compliance in all material respects with each such Permit, and all of such Permits are in full force and effect and no
Proceeding is pending, or to the Knowledge of Seller or Proton, threatened, (i) to terminate, revoke or suspend any permit, except where such revocation or suspension would not have a Material Adverse Effect, or (ii) alleging any failure
to have all Permits required to operate the Business. Neither the execution of this Agreement nor the consummation by the Seller of the transactions contemplated hereby or thereby will result in the termination, suspension or revocation of any
Permit where such termination suspension or revocation would have a Material Adverse Effect. 
 (n) Material Contracts. Except as set
forth on Schedule 4.2(n), neither Proton nor TD is a party to or bound by any: 
 (i) Contract that requires future payments by Proton
or TD of more than $250,000 in the aggregate for both of them in any twelve (12) month period; 
 (ii) loan agreement, letter of
credit, mortgage, note, guarantee of Indebtedness or other instrument evidencing Indebtedness of Proton or TD; 
 (iii) real property lease,
sublease or license of Proton or TD (a “Real Property Lease”) 
 (iv) Contract that limits or purports to limit the ability of
Proton, TD or any of their respective Affiliates to compete in any way in any line of business, with any particular Person or in any jurisdiction; 
 (v) Contract entered into which purports to limit the ability of Proton, TD or any of their respective Affiliates to hire or solicit Persons for employment; 
 (vi) Contract that grants any form of Encumbrance over an asset of Proton or TD (other than those granted in the ordinary course of business consistent with past practice); 
 (vii) Employment agreement, severance agreement or agreement that requires payments upon a “change in control” or similar payments or Contract
covering any employee or former employee of Proton or TD that, individually or collectively, could give rise to the payment of any amount that would not be deductible by Proton or TD by reason of, or constitute an “excess parachute
payment” under, Section 280G of the Code; 
  

 21 

 (viii) Severance, separation, termination or employment agreement which would require Purchaser to
assume any obligation to make payments to any current or former employee following termination of employment; 
 (ix) Employment agreement,
independent contractor agreement, agreement with any employment agency, leasing agency or professional employment organization that would limit Purchaser’s ability to terminate the employment or services of any individual at will; 

(x) collective bargaining agreement or other agreement or arrangement with a labor union, labor organization, workers council or other similar body;

 (xi) Contract that provides for the services of any distributor, dealer, sales representative or similar arrangement; 
 (xii) Contract for the future purchase of supplies, materials or equipment, including, without limitation, any concession agreement, that is in an
amount in excess of $500,000; 
 (xiii) Contract under which Proton or TD has guaranteed the Liabilities of, or indemnified, any Person;

 (xiv) Contract that relates in whole or in part to Proton’s or TD’s Intellectual Property Rights; 
 (xv) partnership, joint venture or other similar agreements or arrangements; 
 (xvi) any other Contract for amounts in excess of $250,000 entered into other than in the ordinary course of business (the Contracts described in
clauses (i)-(xiv), together with all amendments, exhibits and schedules to such Contracts, being the “Material Contracts”). 
 Each of the Material Contracts is in full force and effect and is the legal, valid and binding obligation of Proton, and, to the Knowledge of the Seller and Proton, of the other parties thereto, enforceable against each of them in
accordance with its terms. Except with respect to any defaults of Proton or Seller under the securities purchase agreement and the related loan and other documents of Seller and Proton with Perseus, neither Proton nor TD is in default under any
Material Contract, nor, to the Knowledge of the Seller and Proton, is any other party to any Material Contract in breach of or default thereunder. 
  

 22 

 (o) Title to Properties; Encumbrances. Schedule 4.2(o) contains a complete and accurate list of
all real property, leaseholds, or other interests therein owned by Proton or TD. Seller has delivered or made available to Purchaser copies of the deeds and other instruments (as recorded) by which Proton or TD, as the case may be, acquired such
real property and interests, and copies of all title insurance policies, opinions, abstracts, and surveys in the possession of Seller, Proton or TD and relating to such property or interests. Except for such Encumbrances set forth on Schedule 4.2(o)
and any Permitted Encumbrances, Proton and TD own all of their respective properties and assets free and clear of all Encumbrances. Except as set forth on Schedule 4.2(o), other than the Seller and Proton, no Person will be leasing, using or
occupying any portion of the Wallingford Property as of the Closing Date. 
 (p) Sufficiency of Assets. The building, plants,
structures, and equipment of Proton and TD are sufficient for the continued conduct of the Business after the Closing in substantially the same manner as conducted prior to the Closing. 
 (q) Condemnation. With respect to the Wallingford Property, (i) except as set forth on Schedule 4.2(q), no portion thereof is subject
to any pending or, to the Knowledge of Seller or Proton, threatened Proceedings or proceeding by any Governmental Authority or any quasi-public authority for the condemnation or taking of any portion of the Wallingford Property. 
 (r) Casualty. No portion of the Wallingford Property has suffered any material damage by fire or other casualty which has not heretofore been
repaired. 
 (s) Union Contracts. Neither Proton nor TD is a party to any collective bargaining agreements and there are no labor
unions or other organizations representing any employee of Proton or TD. 
 (t) Benefit Plans. Each written, unwritten, formal or
informal plan, program, agreement or arrangement maintained, sponsored or contributed to (or required to be maintained, sponsored or contributed to) by Proton, TD or Seller that provides direct or indirect compensation (including deferred
compensation) or benefits to any employee, former employee, independent contractor, director or manager of Proton or TD, or with respect to which Proton or TD has or may in the future have any present or future liability (including controlled group
liability), and specifically including any employment agreement, “qualified” or “nonqualified” deferred compensation plan or 

  

 23 

 
arrangement, stock option, restricted stock or other equity-based arrangement, and incentive or performance pay plan (any such arrangement, a “Proton
Plan”), has been operated in all materials respects in accordance with its terms and Applicable Law. Schedule 4.2(t) sets forth a true and complete list of each Proton Plan and each other “employee benefit plan” (within the
meaning of Section 3(3) of ERISA) currently maintained by any entity which, with Proton, is aggregated under Sections 414(b), (c), or (m) of the Code. Such commonly controlled entities’ plans are referred to herein collectively as
“Affiliate Plans” and individually as an “Affiliate Plan”. 
 (u) ERISA. (i) Except as disclosed on
Schedule 4.2(u), with respect to each Proton Plan and each Affiliate Plan that is subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code: (i) there does not exist any accumulated funding deficiency
within the meaning of Section 412 of the Code or Section 302 of ERISA, whether or not waived; (ii) the fair market value of the assets of such Proton Plan equals or exceeds the actuarial present value of all accrued benefits under
such Proton Plan (whether or not vested); (iii) no reportable event within the meaning of the Section 4043(c) of ERISA for which the 30-day notice requirement has not been waived has occurred, and the consummation of the transactions
contemplated by this Agreement will not result in the occurrence of any such reportable event; (iv) all premiums to the PBGC have been timely paid in full; (v) no Liability (other than for premiums to the PBGC) under Title IV of ERISA has
been or is expected to be incurred by Proton or any of its Subsidiaries; and (vi) the PBGC has not made inquiries with respect to any Proton Plan or instituted Proceedings to terminate any Proton Plan and, except as disclosed on Schedule
4.2(u) and to the Knowledge of Seller or Proton, no condition exists that presents a risk that such Proceedings will be instituted or that would constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Proton Plan. 
 (ii) All contributions required to be made to any Proton Plan or Affiliate Plan by Applicable Law
or regulation or by any plan document or other contractual undertaking, and all premiums due or payable with respect to insurance policies funding any Proton Plan or Affiliate Plan, for any period through the date hereof have been timely made or
paid in full or, to the extent not required to be made or paid on or before the date hereof, have been fully reflected on the Financial Statements. Each Proton Plan or Affiliate Plan that is an employee welfare benefit plan under Section 3(1)
of ERISA either (i) is funded through an insurance company contract and is not a “welfare benefit fund” within the meaning of Section 419 of the Code or (ii) is unfunded. 
 (iii) Except as set forth on Schedule 4.2(u), there are no pending or threatened Proceedings (other than routine claims for benefits) by, on
behalf of or against any of the Proton Plans or Affiliate Plans or any fiduciary thereof with respect thereto. Neither Proton, TD nor any other Person, including any fiduciary, has engaged in any “prohibited transaction” (as defined in
Section 4975 of the Code or 

  

 24 

 
Section 406 of ERISA) that would subject any Proton Plan or Affiliate Plan, its related trust, Proton, TD or any person Proton or Seller has an
obligation to indemnify, to any material tax or penalty imposed under Code Section 4975 or Section 502 of ERISA. 
 (v)
Environmental Matters. (i) Except as set forth on Schedule 4.2(v), Proton and TD have complied and each is in compliance in all material respects with all applicable Environmental and Safety Requirements. Proton and TD each
possesses all material Environmental Permits required under any Environmental and Safety Requirements for the conduct of the business, is in compliance in all material respects with the terms and conditions thereof, and has timely filed all renewal
applications relating thereto. Schedule 4.2(v) sets forth a complete list of such Environmental Permits. 
 (ii) Except as set forth
on Schedule 4.2(v), there are no Proceedings under any Environmental and Safety Requirements pending, or, to the Knowledge of Seller or Proton, threatened against Proton or TD, or affecting Proton, TD, the Wallingford Property or the
Businesses. 
 (iii) Except as disclosed on Schedule 4.2(v) and except under Permits or in the ordinary course of business, neither
Proton nor TD has expressly assumed or undertaken any Liability of any other Person under any Environmental and Safety Requirements. 
 (iv)
Except as set forth on Schedule 4.2(v), neither Proton nor TD has treated, stored, disposed of, arranged for or permitted the disposal of, transported, handled or Released any Hazardous Substance, or owned or operated any real property, in a
manner that has given rise, or could reasonably be expected to give rise, to Liabilities pursuant to the Comprehensive Environmental Response, Compensation and Liability Act or any other Environmental and Safety Requirement, including any Liability
for response costs, corrective action costs, personal injury, property damage, natural resources damage or attorney fees, or any investigative, corrective or remedial obligations. To the Knowledge of Seller or Proton, and except as disclosed on
Schedule 4.2(v), no Hazardous Substances are present at, on, under, or migrating from any real property owned or leased by Proton in quantities or concentrations that could reasonably be expected to give rise to Liabilities of Proton or TD
pursuant to Environmental and Safety Requirements. 
 (w) Intellectual Property. (i) Schedule 4.2(w) includes a true and
complete list of all Intellectual Property Rights that are used or owned by or licensed to Proton or TD (the “Proton Intellectual Property”). Proton or TD is the exclusive owner of, and enjoys all rights of ownership with respect to,
Proton Intellectual Property, free and clear of any Encumbrance (except for Permitted Encumbrances), and no royalties, honoraria or fees are payable by Proton or TD to other Persons by reason of the 

  

 25 

 
ownership or use of the Proton Intellectual Property. Except as disclosed on Schedule 4.2(w), neither Proton nor TD has asserted any claims:
(A) based upon, challenging, or seeking to deny or restrict the use or registration by any third party of any of the Proton Intellectual Property; (B) alleging that any third party is infringing, misappropriating or otherwise violating the
Proton Intellectual Property; or (C) alleging that any third party is using the Proton Intellectual Property in conflict with the terms of any Material Contract. 
 (ii) To the Knowledge of Seller and Proton, Proton’s continued operation of its Business as presently conducted will not give rise to any claims that allege that the operations of the Business as presently
conducted, including, without limitation the manufacture, use or sale of any product or service or the use of any process now used or offered by Proton or TD, infringes, violates, misappropriates or conflicts with any Intellectual Property Rights of
any third party, or constitutes unfair competition with any third party, and no royalty or other payment will accrue or be due following the Closing based on the continued operation of the Business as presently conducted. 
 (iii) To the Knowledge of Seller and Proton, the Proton Intellectual Property does not infringe, misappropriate or otherwise violate the rights of any
third party in such third party’s Intellectual Property Rights. Except as disclosed in Schedule 4.2(w), no Proceedings have been asserted or are pending or, to the Knowledge of Seller or Proton, threatened against Proton
(i) based upon, challenging, or seeking to deny or restrict the use by Proton of any of the Proton Intellectual Property, (ii) alleging that any of the Proton Intellectual Property infringes, misappropriates or otherwise violates the
Intellectual Property Rights of any third party, or (iii) alleging that any of the Proton Intellectual Property is being used by Proton in conflict with the terms of any material agreement concerning Intellectual Property Rights, except for
Proceedings which individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect. 
 (iv) Proton and TD
have taken adequate steps to protect the trade secret portions of the Proton Intellectual Property from improper use and/or disclosure by others, including but not limited to restricting access to trade secret information only to those employees of
Proton or TD with a need to know the information, and requiring all employees with such access to sign an appropriate confidentiality and nondisclosure or similar agreement (an “NDA”). All current or past employees of Proton or TD who have
had access to Proton’s trade secret information have signed an NDA substantially in the form attached hereto as Schedule 4.2(w)(iv). 
 (v) Except as set forth on Schedule 4.2(w)(v), neither Proton nor TD are parties to any agreements licensing the use of any Intellectual Property either to or from any third party. 
  

 26 

 (x) Taxes. (i) The Seller, Proton and TD have each timely filed all Tax returns,
declarations of estimated Tax, Tax reports, information returns and statements (collectively, the “Tax Returns”) required to be filed by it prior to the Closing Date. As of the time of filing, the Tax Returns were true and complete in all
respects. 
 (ii) Proton and TD have each timely paid all Taxes payable for any period that ended on or before the Closing Date and, for any
period that began on or before the Closing Date and ends after such Closing Date, Schedule 4.2(x) sets forth the Taxes that are reasonably anticipated to become due and payable. 
 (iii) There is no pending or to the Knowledge of Seller or Proton, threatened audit or assessment, suit, proposed adjustment, deficiency, dispute,
administrative or judicial proceeding or similar claim with respect to Taxes or Tax Returns of the Seller, Proton or TD. 
 (iv) No
Encumbrance with respect to Taxes has been filed and no deficiency or addition to Taxes, interest or penalties for any Taxes with respect to any income, properties or operations of Proton has been proposed, asserted or assessed against Seller,
Proton or TD. 
 (v) No Contract or understanding waiving or extending the statute of limitations or the period of assessment for collection
of any Taxes payable by the Seller, Proton or TD has been filed or entered into with any Tax authority by the Seller, Proton or TD. 
 (vi)
Neither Proton nor TD is a party to any Contract to provide for the allocation, sharing or indemnification of Taxes. 
 (y)
Insurance. 
 (i) Seller has delivered to Purchaser: 
 (1) true and complete copies of all policies of insurance to which Proton or TD is a party or under which Proton and TD, or any director of Proton or TD, is or has been covered at any time within the years preceding
the date of this Agreement; and 
 (2) true and complete copies of all pending applications for policies of insurance. 
 (ii) Schedule 4.2(y) describes: 
 (1) (i)
any self-insurance arrangement by or affecting Proton or TD, including any reserves established thereunder; and 
  

 27 

 (2) all obligations of Proton or TD to third parties with respect to insurance (including such
obligations under leases and service agreements) and identifies the policy under which such coverage is provided. 
 (iii) Except as set
forth on Schedule 4.2(y): 
 (1) Within the last two (2) years, neither Proton nor TD has received (A) any refusal of coverage or
any notice that a defense will be afforded with reservation of rights, or (B) any notice of cancellation or any other indication that any insurance policy is no longer in full force or effect or will not be renewed or that the issuer of any
policy is not willing or able to perform its obligations thereunder. 
 (2) Proton and TD have paid all premiums due, and have otherwise
performed all of their respective obligations, under each policy to which Proton or TD is a party or that provides coverage to Proton or TD or director thereof. 
 (3) Proton and TD have given notice to the insurer of all claims that may be insured thereby. 
 (iv)
Schedule 4.2(y) list all “reservation of right” letters (any similar letter or notice) provided to Proton or the Seller by any insurance company in connection with the IPO Litigation and any other case to which Proton is a party and which
is described on Schedule 4.2(f). 
 (v) With respect to Proton’s directors and officers insurance policies, all premiums were paid in
full and on a timely basis for: 
 (1) Directors, Officers and Corporate Liability Insurance Policy No. 473-50-79, for the
September 28, 2000 through September 28, 2002 policy period with a stated $10 million limit of liability, sold to Proton Energy Systems, Inc. by National Union Fire Insurance Company (“National Union Policy”); 
 (2) Directors’ and Officers’ Liability and Company Indemnification Policy No. FG-103264, for the September 28, 2000 through
September 28, 2002 policy period with a stated $5 million limit of liability, sold to Proton Energy Systems, Inc. by Northfield Insurance Company (“Northfield Policy”). 
 (vi) With respect to the IPO Litigation: 
 (1) The only litigation or other claims threatened or asserted against Seller for which Seller has provided notice and/or sought coverage under the National Union Policy and/or the Northfield Policy is the securities litigation referenced
in the Seller’s most recent Form 10-Q at page 11, Item 9, “Commitments and Contingencies — Legal Proceedings” (hereinafter “the IPO Litigation”). 
  

 28 

 (2) The Seller has provided proper and timely notice of the IPO Litigation against the Seller under the
National Union Policy and the Northfield Policy, requested any and all available coverage for the IPO Litigation in accordance with such policies, and taken all reasonable and businesslike steps to preserve any and all claims and rights against the
carriers that sold such policies in connection with the IPO Litigation. The Seller is not aware of any contrary suggestion or statement by the carriers that issued those policies. 
 (3) The Seller has provided proper and timely notice of the IPO Litigation against the Seller to the underwriters who handled the September 28,
2000 initial public offering of the Seller’s common stock and has taken all reasonable and businesslike steps to preserve any and all claims and rights against such underwriters in connection with the IPO Litigation. The Seller is not aware of
any contrary suggestion or statement by the underwriters. 
 (4) As of May 28, 2008, the only amount(s) known by the Seller to have
even potentially reduced the above-referenced limits, and/or any arguably applicable retention amount for the National Union Policy and/or Northfield Policy, is the $204,158.89 billed by the Wilmer Hale firm or its predecessor counsel in the defense
of the Seller in the IPO Litigation. 
 (z) No Cross Defaults. Except as set forth on Schedule 4.2(z) or on Schedule 4.2(e), Proton
is not a party to any Contract that contains default, termination or acceleration clauses, covenants or agreements that would be triggered upon the execution of this Agreement or its Closing or completion of any aspect of the transactions
contemplated hereby, with or without notice, or with the giving of notice or lapse of time or both, and whether or not curable. 
 (aa)
Disclosure. No representation or warranty of Seller in this Agreement or in any Schedule contains any misstatement of a material fact, or omits to state a material fact necessary to make the statements herein or therein, in light of the
circumstances in which they were made, not misleading. 
 ARTICLE V 
 Conduct Prior to the Closing 
 Section 5.1. Access and Information.
From and after the execution and delivery of this Agreement, Seller shall afford to Purchaser and to Purchaser’s financial advisors, legal counsel, accountants, consultants, financing sources, and other authorized representatives, during normal
business hours upon prior reasonable notice, access to its books, records, properties, plants and personnel relating to the Business and, during such period, shall furnish as promptly as practicable to Purchaser, at Purchaser’s expense, copies
of such books and records as Purchaser shall reasonably request. 
  

 29 

 Section 5.2. Bankruptcy Action. 
 (a) This Agreement shall be subject to the consideration of higher or better offers submitted at an auction (the “Auction”) to be conducted in
accordance with the Sale Procedures set forth in the Sale Procedures Motion, which Seller shall promptly after the execution and delivery of this Agreement by Seller and Purchaser, submit to the Bankruptcy Court for its approval. Any competing offer
(a “Competing Offer”) must be submitted to Seller, in writing, in accordance with the Sale Procedures; 
 (b) Seller shall use
reasonable efforts to obtain entry of the Approval Order on or before July 14, 2008; 
 (c) Other than with respect to the Sales
Procedures Motion, Seller will provide Purchaser with copies of all motions, applications, and supporting papers prepared by Seller (including forms of orders and notices to interested parties) relating in any way to Purchaser or the transactions
contemplated by this Agreement not less than three (3) Business Days prior to the filing thereof or as soon as practicable after execution of this Agreement; and 
 (d) Seller shall give appropriate notice, and provide appropriate opportunity for hearing, to all parties entitled thereto, of all motions, orders, hearings or other proceedings relating to this Agreement or the
transactions contemplated thereby. 
 Section 5.3. Break-Up Fee; Expense Reimbursement Fee. In the event that, at the Auction, a
Person presents a Competing Offer which constitutes a higher or better offer in accordance with the Sale Procedures Order and, as a result, the Purchaser is not the successful bidder for the Shares, Purchaser shall be entitled to (i) a break-up
fee of $200,000 (the “Break-Up Fee”), payable upon the closing of such transaction with the successful bidder; and (b) an expense reimbursement fee (the “Expense Reimbursement Fee”) in an amount not to exceed $135,000 as may
be permitted by and to be paid in accordance with the Sale Procedures Order. The Break-Up Fee and the Expense Reimbursement Fee shall be paid in cash from the proceeds of and concurrent with the closing of any Competing Offer. 
 Section 5.4. Prohibitions. Prior to Closing, without the prior written consent of Purchaser, Seller shall not, other than in the ordinary
course of business: 
 (a) sell, transfer or otherwise dispose of the Shares or any assets of Proton; 
 (b) waive any material rights of Proton; or 
  

 30 

 (c) take any action that would materially adversely affect the Business. 
 Section 5.5. Conduct of Business. From the date hereof until the Closing, except as expressly contemplated or permitted by this Agreement or
as otherwise consented to by Purchaser in writing, Seller shall, to the extent consistent with the Bankruptcy Code and subject to any orders from time to time of the Bankruptcy Court binding upon Seller: 
 (a) carry on the Business only in the ordinary course in substantially the same manner in which it previously has been conducted; 
 (b) maintain the properties of the Business in good working repair, order and condition, in accordance with their standard maintenance policies
(ordinary wear and tear excepted); 
 (c) not merge with or into, consolidate with, or acquire all or substantially all of the stock or
other ownership interests or assets of any Person; 
 (d) neither (i) sell the Shares or any assets of Proton except the sale of
inventory in the ordinary course of business; (ii) make any change in their accounting methods or practices relating to the Business; nor (iii) do or omit to do any act which may cause a material breach of or default under any commitment
or a material breach of any representation, warranty, covenant or agreement made herein by Seller; 
 (e) maintain its books of account and
records relating to the Business in their usual, regular and ordinary manner; and 
 (f) co-operate in good faith with the Purchaser to
facilitate an orderly transition of ownership and operation of the Business, and comply with any and all reasonable requests made by the Purchaser in connection therewith. 
 Section 5.6. Patent and Patent Application Matters. On or before the Closing Date, the Seller shall cause the patents and published patent
applications set forth below (collectively the “Third-Party Patents and Applications”) to be assigned to Proton, with the result that Proton shall be the record and beneficial owner of each such Third Party Patent and Application, free and
clear of all Encumbrances (except for any Encumbrance which is removed on or before the Closing Date): 
 Patents 
  

					
	 U.S. Patent No.
	 	Issue Date	  	 Title

	6,783,885	 	08/31/2004	  	 Low Gravity Electrochemical Cell

  

 31 

					
	6,916,443	 	07/12/2005	  	 High Differential Pressure Electrochemical Cell

	7,241,522	 	07/10/2007	  	 Regenerative Electrochemical Cell System and Method for Use Thereof

	7,270,908	 	09/18/2007	  	 Proton Exchange Membrane Electrochemical Cell System

	7,314,509	 	01/01/2008	  	 Gas Liquid Phase Separator with Improved Pressure Control

	6,383,361	 	05/07/2002	  	 Fluids Management System for Water Electrolysis

	6,585,869	 	07/01/2003	  	 Means of Maintaining Compression of the Active Area in an Electrochemical Cell

	6,653,011	 	11/25/2003	  	 Electrochemical Cell Frame Having Integral Protector Portion

	6,524,454	 	02/25/2003	  	 Integrated Membrane and Electrode Support Screen and Protector Ring for an Electrochemical Cell

 Published Patent Applications 
  

					
	 U.S. Serial No.
	 	Filing Date	  	 Title

	 10/941,613
	 	09/15/2004	  	 Electrochemical Cell System Output Control Method and Apparatus

	 10/983,526
	 	11/08/2004	  	 Apparatus and Method for Maintaining Compression of the Active Area in an Electrochemical Cell

	 11/461,070
	 	07/31/2006	  	 Methods for Dispensing Hydrogen Gas

	 11/461,597
	 	08/01/2006	  	 Electrolysis Cell System with Cascade Section

	 11/461,602
	 	08/01/2006	  	 Cascade System

	 11/461,613
	 	08/01/2006	  	 Method for Storing and Dispensing Hydrogen Gas

	 11/419,057
	 	05/18/2006	  	 Compression Devices and Electrochemical Cell Stack Design

	 11/419,053
	 	05/18/2006	  	 Electrochemical Cell Stack Design

	 11/419,049
	 	05/18/2006	  	 Electrochemical Cell Stacks and Use Thereof

	 11/856,804
	 	9/18/2007	  	 Apparatus and Method for Maintaining Compression of the Active Area in an Electrochemical Cell

	 11,548,415
	 	10/11/2006	  	 Electrochemical Cell with Dynamic Endplate

  

 32 

 ARTICLE VI 
 Conditions to Closing 
 Section 6.1. Conditions to Seller’s Obligations. The
obligation of Seller to consummate the transactions contemplated hereby is subject to the satisfaction at or prior to the Closing Date of the following conditions: 
 (a) The representations and warranties made by Purchaser in Section 4.1 shall have been true and correct in all material respects when made and shall be true and correct in all material respects as if originally
made on and as of the Closing Date; 
 (b) All obligations of Purchaser to be performed hereunder on or prior to the Closing Date shall have
been duly performed in all material respects; 
 (c) No action or proceeding before any court, government body or other tribunal shall have
been commenced or threatened (by a party other than Seller, or an Affiliate of Seller) wherein an unfavorable judgment, decree or order would (i) prevent the carrying out of this Agreement or any of the transactions contemplated hereby,
(ii) declare unlawful any of the transactions contemplated by this Agreement or (iii) cause any of such transactions to be rescinded; 
 (d) The Approval Order shall have been entered by the Bankruptcy Court and the effectiveness of the Approval Order shall not have been modified, reversed, vacated, stayed, restrained or enjoined on the Closing Date; 
 (e) To the extent not addressed or covered by the Approval Order, Seller shall have received the consent of all third parties, including without
limitation , Perseus, holding liens, claims or interests against the Shares or any of Proton’s or TD’s assets to the release of all such liens, claims and interests in the Shares or any of Proton’s or TD’s assets, together with
termination statements on form UCC-3 or such other appropriate form which shall have been prepared and signed by such parties for filing on the Closing Date; 
 (f) Seller’s receipt of Purchaser’s closing deliveries pursuant to Section 3.4; 
 (g) The
agreement of Proton and Seller to the release and forgiveness of any Intercompany Debt owed by either party to the other; 
 (h) If Seller
determines that, pursuant to the Connecticut Transfer Act, it will be unable to provide Purchaser with a Form I or Form II filing, Purchaser shall have delivered a Form III or Form IV which Purchaser shall execute as the “certifying
party,” as that term is defined in the Connecticut Transfer Act; and 
  

 33 

 (i) Seller’s receipt of the Deposit and the balance of the Purchase Price pursuant to
Section 3.3. 
 Each of the foregoing conditions is for the benefit of Seller, which may waive any of such conditions with the consent
of the Agents at, or prior to, the Closing. 
 Section 6.2. Conditions to Purchaser’s Obligations. The obligation of
Purchaser to consummate the transaction contemplated hereby is subject to the satisfaction at or prior to the Closing Date of the following conditions: 
 (a) The representations and warranties made by Seller in Section 4.2 shall have been true and correct in all respects (in the case of any representation or warranty containing any materiality qualification) or in
all material respects (in the case of any representation or warranty without any materiality qualification) when made, and shall be true and correct in all respects (in the case of any representation or warranty containing any materiality
qualification) or in all material respects (in the case of any representation or warranty without any materiality qualification) as if originally made on and as of the Closing Date; 
 (b) All obligations of Seller to be performed hereunder on or prior to the Closing Date shall have been duly performed in all material respects;

 (c) No action or proceeding before any court, government body or other tribunal shall have been commenced or threatened (other than by an
Affiliate of Purchaser) which seeks to (i) nullify, restrict or modify the rights and protections afforded Purchaser in this Agreement and the Approval Order, (ii) prevent the carrying out of this Agreement or any of the transactions
contemplated hereby, (iii) declare unlawful the transactions contemplated by this Agreement, (iv) cause such transactions to be rescinded or (v) materially affect the right of Purchaser to own, operate or control the Shares following
the Closing; 
 (d) The Sale Procedures Order and the Approval Order shall have been entered by the Bankruptcy Court and the effectiveness
of the Approval Order shall not have been modified, reversed, vacated, stayed, restrained or enjoined on the Closing Date; 
 (e) To the
extent not addressed or covered by the Approval Order, Seller shall have received (i) the consent of all third parties, including without limitation , Perseus, holding an Encumbrance on or against any of the Shares or any of Proton’s or
TD’s assets, to the release of any and all such Encumbrances in on or against Shares or any of Proton’s or TD’s assets, together with termination statements on form 

  

 34 

 
UCC-3 or such other appropriate form which shall have been prepared and signed by such parties for filing on the Closing Date, and (ii) the consent of
all third parties who or which are a beneficiary of any guaranty or surety agreement by or on behalf of Proton or TD to the unconditional release of such guaranty or surety agreement; 
 (f) The agreement of Proton and Seller to the release and forgiveness of any Intercompany Debt owed by either party to the other; 
 (g) If Seller has represented and covenanted in writing that the Connecticut Transfer Act does not apply to the transaction contemplated by this
Agreement, Seller shall have provided Purchaser a completed Form I or Form II, as defined in the Connecticut Transfer Act; 
 (h) All Third
Party Patents and Applications shall have been assigned to Proton, with the result that Proton shall be the record and beneficial owner of each such Third Party Patent and Application, free and clear of all Encumbrances; 
 (i) Purchaser shall have received Seller’s closing deliveries pursuant to Section 3.4; and 
 (j) Seller shall have removed all its property and personnel from the Wallingford Property. 
 Each of the foregoing conditions is for the benefit of Purchaser, which may waive any of such conditions at, or prior to, the Closing. 
 ARTICLE VII 
 Other Agreements 

 Section 7.1. Further Assurances. The parties shall execute such further documents, and perform such further acts, as may be
reasonably necessary to transfer and convey the Shares to Purchaser, on the terms herein contained, and to otherwise comply with the terms of this Agreement and consummate the transaction contemplated hereby. 
 Section 7.2. Efforts and Actions to Cause Closings to Occur. Upon the terms and subject to the conditions of this Agreement, each of Seller
and Purchaser shall use their respective commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done and cooperate with each other in order to do, all things necessary, proper or advisable (subject to
any applicable laws) to consummate the Closing as promptly as practicable, including, but not limited to, the preparation and filing of all motions, forms, registrations and notices required to be filed to consummate the Closing and the taking of
such actions as are reasonably necessary to obtain any requisite approvals, authorizations, consents, orders, licenses, permits, exemptions or 

  

 35 

 
waivers by any third party or governmental entity. In addition, no party hereto shall take any action after the date hereof that could reasonably be expected
to materially delay the obtaining of, or result in not obtaining, any permission, approval or consent from any governmental entity or other Person required to be obtained prior to Closing. 
 Section 7.3. Computer Sciences Corporation. Purchaser and Seller agree that any deposits or similar amounts and termination payments payable
pursuant to the Sublease dated as of May 26, 2005 between the Seller and Computer Sciences Corporation is property of and shall be payable to the Seller . 
 Section 7.4. Sales and Use Tax Payment Cash Account. Prior to the Closing, Seller cause the letter of credit issued to secure certain obligations of the Seller with respect to the payment of any sales and
use tax payments to the State of Connecticut to be reissued or amended in the name of Proton as the account party and to cause the restricted cash account that secures the full amount of the account party’s reimbursement obligations under such
letter of credit to be transferred into the name of Proton. 
 Section 7.5. Employee Retention Payments. Purchaser acknowledges
that it shall be responsible for the payment after Closing of certain retention payment to employees of Proton pursuant to the retention letter agreements referred to on Schedule 4.2(n). 
 Section 7.6. Tax Returns. 
 (a)
After the Closing, at Purchaser’s cost and expense, the Seller shall afford, during normal business hours upon prior reasonable notice, the Purchaser and Purchaser’s financial advisors, accountants and authorized representatives access to
the Seller’s books and records with respect to its consolidated Tax Returns filed with respect to all periods prior to the Closing Date. Purchaser and Seller shall cooperate fully, as and to the extent reasonably requested by the other party,
in connection with the filing of Tax Returns pursuant to this Section and any audit, litigation or other proceeding with respect to Taxes. Such cooperation shall include the retention and (upon the other party’s request) the provision of
records and information reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder.
Purchaser and Seller agree (A) to retain all books and records with respect to Tax matters pertinent to Proton relating to any taxable period beginning before the Closing Date until the expiration of the statute of limitations (and, to the
extent notified by Purchaser or Seller, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any taxing authority, and (B) to give the other party reasonable written notice
prior to transferring, destroying or discarding any such books and records and, if the other party so requests, Purchaser or Seller, as the case may be, shall allow the other party to take possession of such books and records 
  

 36 

 (b) Seller shall timely prepare or cause to be prepared and file or cause to be filed all Tax Returns
for the Seller for all periods for which a Tax Return is required to be filed or a Tax is required to be paid (each, a “Tax Period”) ending on or prior to the Closing Date which are filed after the Closing Date and Seller shall pay all
Taxes reflected on such Tax Returns. Copies of all such Tax Returns shall be made available to Purchaser at least fifteen (15) Business Days prior to the date on which they are to be filed to enable Purchaser to review, comment upon and approve
such Tax Returns (which approval shall not be unreasonably withheld or delayed, it being understood by the Purchaser that the only basis upon which it can withhold its consent to any Tax Return is to require modifications thereto, consistent with
the Internal Revenue Code of 1986, as amended, and United States Treasury Regulations, to protect the availability of Proton’s net operating losses to the Purchaser). Purchaser shall cause Proton to furnish information to Seller as reasonably
requested by Seller to allow Seller to satisfy its obligations under this Section 7.6 The Seller and Purchaser shall consult and cooperate with each other as to any elections to be made on returns of the Seller for the Tax Periods ending on or
before the Closing Date. With respect to the short tax year for Proton ending on the Closing Date, Purchaser and Seller agree to determine Proton’s tax attributes, taxable income and financial information for such period based on an interim
closing of the books as of the close of business on the Closing Date. 
 (c) Seller shall control all Tax audits and proceedings with
respect to Proton that relate to a Tax Period ending on or prior to the Closing Date, provided that Seller will not settle such audit or proceeding without the consent of Purchaser, which consent shall not be unreasonably withheld or delayed. At
Purchaser’s cost and expense, Purchaser shall be permitted to participate in any such Tax audit or proceeding. 
 (d) Purchaser shall
control all Tax audits and proceedings with respect to Proton that related to a Tax Period ending after the Closing Date. 
 Section 7.7. Certain Seller Contracts and Purchase Orders. 
 (a) Prior to Closing, Seller shall have used its
reasonable efforts to cause the Contracts and purchase orders set forth on Schedule 7.7 to have been assigned and transferred to the Purchaser. 
 (b) To the extent that the assignment by Seller of any such Contract or purchase order is not permitted without (i) the consent of the other party or parties to the Contract or purchase order, or (ii) prior notice to such other
party or parties, then at the option of Purchaser, this Agreement shall not be deemed to constitute an 

  

 37 

 
assignment or an attempted assignment of the same, if such assignment or attempted assignment would constitute a breach thereof. Seller shall use all
reasonable efforts to obtain any and all such consents and approvals, and shall give all required notices after the date hereof. 
 (c) If
any necessary consent or approval is not obtained with respect to the assignment of any such Contract or purchase order, Seller shall cooperate with Purchaser in any reasonable arrangement designed to provide Purchaser with all of the benefits and
obligations under such Contract or purchase order, as if such consent or approval had been obtained so as to permit the Purchaser to complete and fulfill any such Contract or purchase order. 
 (d) Whether or not any consent or approval is obtained in connection with any such Contract or purchase order, Purchaser shall make all payments and
perform all obligations under such Contracts or purchase orders directly to the counterparty or as provided for under such Contracts or purchase orders. Purchaser agrees that no representation, warranty or covenant made herein by Seller shall be
breached or deemed breached as a result of Seller’s failure to obtain any third party consent or approval with respect to the assignment of any of such Contracts or purchase orders. 
 Section 7.8. Survival. The representations, warranties, covenants and agreements of the parties hereto contained in this Agreement or any
agreement delivered in connection herewith shall not survive the Closing Date. 
 ARTICLE VIII 
 Termination 
 Section 8.1.
Termination by Mutual Consent. This Agreement may be terminated at any time prior to the Closing Date by mutual written agreement of Seller and Purchaser. 
 Section 8.2. Termination by Seller. Seller may terminate this Agreement at any time prior to the Closing Date if: 
 (a) there has been a material breach by Purchaser of any of its representations or warranties contained in this Agreement; 
 (b) there has been a material breach of any of the covenants or agreements set forth in this Agreement on the part of Purchaser, which breach is not curable or, if curable, is not cured within ten (10) days after
written notice of such breach is given by Seller to Purchaser; 
  

 38 

 (c) the conditions to the obligations of Seller set forth in Section 6.1 shall not have been waived
or satisfied on or before the date specified therefor, including, without limitation, an overbid by a third party that results in an Approval Order for the transactions contemplated hereby not being entered by the Bankruptcy Court; or 
 (d) the Closing Date shall not have occurred on or prior to July 25, 2008; provided, however, that the right to terminate shall not
be available under this Section 8.2(d) if the Closing shall not have occurred by such date as a result of the failure of Seller to fulfill any of their obligations under this Agreement. 
 Section 8.3. Termination by Purchaser. Purchaser may terminate this Agreement at any time prior to the Closing Date if: 
 (a) any representation or warranty of the Seller shall not have been true and correct in all respects (in the case of any representation or warranty
containing any materiality qualification) or in all material respects (in the case of any representation or warranty without any materiality qualification) as of the date when made; 
 (b) there has been a material breach of any of the covenants or agreements set forth in this Agreement on the part of Seller, which breach is not
curable or, if curable, is not cured within ten (10) days after written notice of such breach is given by Purchaser to Seller; 
 (c)
the conditions to the obligations of Purchaser set forth in Section 6.2 shall not have been waived or satisfied on or before the Closing Date or such earlier date as may be specified therefor; or 
 (d) the Closing Date shall not have occurred on or prior to July 25, 2008; provided, however, that the right to terminate shall not
be available under this Section 8.3(d) if the Closing shall not have occurred by such date as a result of the failure of Purchaser to fulfill any of its obligations under this Agreement. 
 Section 8.4. Effect of Termination and Abandonment. In the event of termination of the Agreement pursuant to this Article 8, written notice
thereof shall as promptly as practicable be given to the other party to this Agreement and this Agreement shall terminate and the transactions contemplated hereby shall be abandoned, without further action by any of the parties hereto, and the
Deposit (together with all interest earned thereon) shall be returned to Purchaser without the requirement of Seller’s delivery of a written instruction or authorization to Cole Schotz concerning the same, which instruction and authorization is
hereby granted. If this Agreement is terminated as provided herein all obligations of the parties, including, without limitation, the obligation to pay the Expense Reimbursement Fee in certain events, shall terminate. 
  

 39 

 ARTICLE IX 
 Miscellaneous 
 Section 9.1. Publicity. Except as otherwise required by law or in
connection with Seller’s bankruptcy filings with the Bankruptcy Court and the publication of requisite notices of sale in national and regional publications in connection with the sale of the Shares in the bankruptcy proceedings, press releases
concerning this transaction shall be made only with the prior approval of Seller and Purchaser, which approval shall not be unreasonably withheld. 
 Section 9.2. Notices. All notices required or permitted to be given hereunder shall be in writing and may be delivered by hand, by facsimile (with transmission confirmation) or by nationally recognized overnight courier. Notices
delivered by hand, by facsimile or by nationally recognized overnight carrier shall be deemed given on the first business day following receipt; provided, however, that a notice delivered by facsimile shall only be effective if such
notice is also delivered by hand, or deposited in the United States mail, postage prepaid, certified mail, return receipt requested, on or before two (2) Business Days after its delivery by facsimile. All notices shall be addressed as follows:

  

			
	if to Purchaser:	  	 Baker Companies, Inc.
 485 Washington Avenue

Pleasantville, New York 10570
 Telecopier: (914) 747-9275
 Attention: Marcus Baker

		
	with a copy to Purchaser’s counsel:	  	 McCarter & English
 4 Gateway Plaza
 Newark, New Jersey 07102
 Telecopier: (973) 624-7070
 Attention: Joseph Lubertazzi, Esq. and Todd Poland, Esq.

		
	if to Seller to:	  	 Distributed Energy Systems Corp.
 10 Technology Drive

 Wallingford, Connecticut 06492
 Telecopier: (203)
949-8017
 Attention: Peter Tallian, Chief Financial Officer

  

 40 

			
		
	with a copy to Seller’s counsel	  	 Cole, Schotz, Meisel, Forman & Leonard, P.A.
 Court Plaza North
 25 Main Street
 Hackensack, New
Jersey 07602
 Telecopier: (201) 678-6271
 Attention: Marc P.
Press, Esq.

 or, in each case, at such other address as may be specified in writing to the other parties. 
 Section 9.3. Expenses. Other than as set forth in this Agreement, each of Seller and Purchaser will bear their respective costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby. 
 Section 9.4.
Entire Agreement. This Agreement and the instruments to be delivered by the parties pursuant to the provisions hereof constitute the entire agreement between the parties. Each Exhibit and Schedule attached hereto shall be considered
incorporated into this Agreement. 
 Section 9.5. Applicable Law. This Agreement shall be governed and controlled as to validity,
enforcement, interpretation, construction, effect and in all other respects by the internal laws of the State of Delaware applicable to contracts made therein, without regard to rules of conflicts of law, except to the extent susperseded by the
Bankruptcy Code. 
 Section 9.6. Binding Effect; No Third Party Beneficiaries. This Agreement shall inure to the benefit of and
be binding upon the parties hereto, and their successors and permitted assigns. Nothing in this Agreement, express or implied, is intended to confer on any person other than the parties hereto, and their respective successors and permitted assigns,
any rights, remedies, obligations or liabilities under or by reason of this Agreement. 
 Section 9.7. Assignability. This
Agreement shall not be assignable by either party without the prior written consent of the other party, except that at or prior to the Closing, Purchaser may assign its rights and delegate its duties under this Agreement to one or more Affiliates;
provided that such assignment shall not discharge the obligations and liabilities of Purchaser hereunder. 
 Section 9.8.
Amendments. This Agreement shall not be modified or amended except pursuant to an instrument in writing executed and delivered on behalf of each of the parties hereto. 
  

 41 

 Section 9.9. Headings. The headings contained in this Agreement are for convenience of
reference only and shall not affect the meaning or interpretation of this Agreement. 
 Section 9.10. Post Closing Access to Books
and Records. For a period of six (6) years after the Closing Date, Purchaser shall make available to Seller all books and records of Seller which Purchaser acquired pursuant to this Agreement during normal business hours for copy (at
Seller’s expense), examination and review for any tax related, regulatory or litigation purposes; provided, however, that Seller shall pay Purchaser for any costs incurred by Purchaser in connection therewith, and that such examination shall
not unduly interfere with the operation of Purchaser’s business; and further provided, that all such books and records shall be used only for the purpose set forth above. 
 Section 9.11. Counterparts. This Agreement may be executed in counterparts, each of which shall constitute an original and all of which taken
together shall constitute one and the same Agreement. Delivery of an electronic counterpart shall be effective as delivery of a manually executed counterpart. 
 Section 9.12. Exclusive Jurisdiction. Purchaser and Seller agree that all disputes arising hereunder shall, prior to the issuance of a final decree from the Bankruptcy Court closing the Bankruptcy Case, be
resolved by the Bankruptcy Court which shall have exclusive jurisdiction over all disputes and other matters relating to the interpretation and enforcement of this Agreement or any ancillary document executed pursuant hereto, and Purchaser expressly
consents to and agrees not to contest such exclusive jurisdiction. If the Bankruptcy Court does not have or abstains from exercising such jurisdiction, Purchaser expressly consents to and agrees not to contest the non-exclusive jurisdiction of the
courts of the State of Delaware and, to the extent permitted by applicable law, of any Federal Court, in each case located in the state of Delaware. 
 [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK] 
  

 42 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

  

			
	DISTRIBUTED ENERGY SYSTEMS CORP.
		
	By:	 	 /s/ Peter Tallian

	Name:	 	Peter Tallian
	Title:	 	Chief Financial Officer
	
	BAKER COMPANIES, INC.:
		
	By:	 	 /s/ Marcus D. Baker

	Name:	 	Marcus D. Baker
	Title:	 	President

  

 43

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00143-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00143-of-00352.parquet"}]]