SEC FORM 4

SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person^*

PERSEUS PARTNERS VII L P

(Last)

(First)

(Middle)

C/O PERSEUS, L.L.C.

2099 PENNSYLVANIA AVE., N.W., 9TH FLOOR

(Street)

WASHINGTON

20006

(City)

(State)

(Zip)

2. Issuer Name and Ticker or Trading Symbol
DISTRIBUTED ENERGY SYSTEMS CORP [ DESC ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

X	Director	X	10% Owner
	Officer (give title below)		Other (specify below)

3. Date of Earliest Transaction (Month/Day/Year)
08/24/2007

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

	Form filed by One Reporting Person
X	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	Amount	(A) or (D)	Price		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock	08/24/2007		A⁽¹⁾		26,746⁽¹⁾	A	$0.00	16,715⁽¹⁾⁽²⁾⁽³⁾⁽⁴⁾	I⁽²⁾⁽³⁾⁽⁴⁾	See Footnote⁽²⁾⁽³⁾⁽⁴⁾

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	8. Price of Derivative Security (Instr. 5)		10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
Non-qualified Stock Option (right to buy)	$0.74	08/24/2007		A⁽⁵⁾		40,000⁽⁵⁾		08/24/2010	08/24/2017	Common Stock	40,000⁽⁵⁾	$0.74	20,000⁽²⁾⁽³⁾⁽⁴⁾⁽⁵⁾	I⁽²⁾⁽³⁾⁽⁴⁾	See Footnote⁽²⁾⁽³⁾⁽⁴⁾
Non-qualified Stock Option (right to buy)	$0.84	10/01/2007		A⁽⁶⁾		700⁽⁶⁾		10/01/2007	10/01/2017	Common Stock	700⁽⁶⁾	$0.84	700⁽²⁾⁽³⁾⁽⁴⁾⁽⁶⁾	I⁽²⁾⁽³⁾⁽⁴⁾	See Footnote⁽²⁾⁽³⁾⁽⁴⁾
Non-qualified Stock Option (right to buy)	$0.4	01/02/2008		A⁽⁷⁾		2,100⁽⁷⁾		01/02/2008	01/02/2018	Common Stock	2,100⁽⁷⁾	$0.4	2,100⁽²⁾⁽³⁾⁽⁴⁾⁽⁷⁾	I⁽²⁾⁽³⁾⁽⁴⁾	See Footnote⁽²⁾⁽³⁾⁽⁴⁾

1. Name and Address of Reporting Person^*

PERSEUS PARTNERS VII L P

(Last)

(First)

(Middle)

C/O PERSEUS, L.L.C.

2099 PENNSYLVANIA AVE., N.W., 9TH FLOOR

(Street)

WASHINGTON

20006

(City)

(State)

(Zip)

Relationship of Reporting Person(s) to Issuer

X	Director	X	10% Owner
	Officer (give title below)		Other (specify below)

1. Name and Address of Reporting Person^*

PEARL FRANK H

(Last)

(First)

(Middle)

C/O PERSEUS, L.L.C.

2099 PENNSYLVANIA AVE., N.W., 9TH FLOOR

(Street)

WASHINGTON

20006

(City)

(State)

(Zip)

Relationship of Reporting Person(s) to Issuer

Director	X	10% Owner
Officer (give title below)		Other (specify below)

Explanation of Responses:

1. As previously reported on a Form 4 filed on September 21, 2007 for each of John C. Fox and Michael L. Miller, on August 24, 2007, the Issuer granted to Mr. Fox and Mr. Miller in their capacity as directors of the Issuer, 13,373 shares of restricted stock related to the Issuer's Board of Directors Compensation program for an aggregate total of 26,746 shares of restricted stock. These shares vest monthly over one year. As reported on a Current Report on Form 8-K filed on November 21, 2007, Mr. Miller resigned as a director of the Issuer effective November 21, 2007. As of the date of his resignation, of the 13,373 shares of restricted stock granted to Mr. Miller, only 3,342 shares vested.

2. Each of Mr. Fox and Mr. Miller was nominated as a director of the Issuer by Perseus Partners VII, L.P. ("Perseus VII"), pursuant to its rights under a Securities Purchase Agreement, dated May 10, 2007, between Perseus VII and the Issuer. As a result of this director representation, Perseus VII is deemed to be a director of the Issuer by deputization. All securities issued to either of Mr. Fox or Mr. Miller in their capacity as directors of the Issuer are held by them as nominees of Perseus VII. Each of Mr. Fox and Mr. Miller disclaims beneficial ownership of all such securities, except to the extent each may have any pecuniary interest therein.

3. In addition to the restricted stock and non-qualified stock options reported on this Form 4, Perseus VII holds directly for its own account, (a) three senior secured convertible promissory notes in an aggregate amount of $15,668,659.69, which are convertible into 27,488,876 shares of the Issuer's common stock, as reported on a Form 4 filed on August 28, 2007, a Form 4 filed on October 2, 2007 and a Form 4 filed on January 2, 2008 and (b) warrants granting it the right to purchase up to an aggregate amount of 42,944,165 shares of the common stock of the Issuer, as reported on a Form 3 filed on June 11, 2007 and a Form 4 filed on August 28, 2007. Perseus VII is a Delaware limited partnership. Its general partner is Perseus Partners VII GP, L.P., a Delaware limited partnership. Perseus Partners VII GP, L.L.C., a Delaware limited liability company, is the general partner of Perseus Partners VII GP, L.P. ...(continued on the next footnote)

4. (Continue from the last footnote)... The sole member of Perseus Partners VII GP, L.L.C. is Perseus, L.L.C., a Delaware limited liability company. Perseuspur, L.L.C., a Delaware limited liability company, is the managing member of Perseus, L.L.C. Frank H. Pearl, individually, owns 72.7% of Perseuspur, L.L.C. He also is the sole director and sole shareholder of Rappahannock Investment Company, a Delaware corporation, which in turn owns the remaining 27.3% of Perseuspur, L.L.C. By virtue of such control, Mr. Pearl may be deemed to have beneficial ownership of any shares or other securities that may be issued to Perseus VII, Mr. Fox and Mr. Miller.

5. As previously reported on a Form 4 filed on September 21, 2007 for each of Mr. Fox and Mr. Miller, on August 24, 2007, the Issuer granted to Mr. Fox and Mr. Miller in their capacity as directors of the Issuer, 20,000 non-qualified stock options to buy 20,000 shares of the Issuer's common stock for an aggregate total of 40,000 non-qualified stock options with an exercise price of $0.74. These options vest at the end of three years. Due to Mr. Miller's resignation as disclosed in Footnote 1, none of the options granted to him on August 24, 2007 vested.

6. As previously reported on a Form 4 filed on October 2, 2007 for Mr. Fox, on October 1, 2007, the Issuer granted to Mr. Fox in his capacity as a director of the Issuer, 700 non-qualified stock options to buy 700 shares of the Issuer's common stock with an exercise price of $0.84. These options vested at the time of the grant.

7. As previously reported on a Form 4 filed on January 2, 2008, the Issuer granted to Mr. Fox and Mr. Miller in their capacity as directors of the Issuer, 700 non-qualified stock options and 1,400 non-qualified stock options, respectively, for an aggregate total of 2,100 non-qualified stock options to buy 2,100 shares of the Issuer's common stock with an exercise price of $0.40. These options vested at the time of grant.

Remarks:

+ Ms. Bernstein is signing in her capacity as Secretary and Treasurer of Perseus Partners VII GP, L.L.C., which is the general partner of Perseus Partners VII GP, L.P., which is the general partner of Perseus Partners VII, L.P. ("Perseus VII").

	Perseus Partners VII, L.P. /s/ Teresa Y. Bernstein +	01/24/2008
	By: /s/ Teresa Y. Bernstein, Attorney-In-Fact for Frank H. Pearl	01/24/2008
	** Signature of Reporting Person	Date
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