Exhibit 10.6

SEPARATION AGREEMENT

THIS SEPARATION AGREEMENT (“Agreement”) is made and entered on July 10, 2007, by
and between Tecstar Automotive Group, Inc. (“Tecstar”), Quantum Fuel Systems
Technologies Worldwide, Inc. (“Quantum”) and Douglass C. Goad (“Goad”).

RECITALS:

A. Tecstar and Goad are parties to a certain Employment Agreement dated June 1,
2006 (“Employment Agreement”).

B. Tecstar and Goad desire to terminate the Employment Agreement and Goad’s
employment thereunder with Tecstar.

NOW, THEREFORE, in consideration of the foregoing and of the following mutually
agreed upon promises and covenants and other good and valuable consideration,
the adequacy, sufficiency and receipt of which are hereby expressly
acknowledged, the parties agree as follows:

1. Termination of Employment. The parties agree that the Employment Agreement
and Goad’s employment with Tecstar shall be terminated effective August 3, 2007
(“Effective Date”). Goad shall receive his base pay and benefits (including
accrued vacation) through the Effective Date.

2. Separation Pay and Benefits. On the Effective Date, Tecstar agrees to pay and
provide Goad with the following:

A. A lump sum cash payment of Four Hundred Thousand ($400,000) Dollars, less
applicable withholding taxes; and

B. Tecstar shall transfer ownership and title to the 2006 Cadillac STS currently
used by Goad in the performance of his employment duties and a 2001 black Chevy
Tahoe.

Goad acknowledges and agrees that the payments and benefits described above are
in full and complete satisfaction of any and all obligations that Tecstar and/or
Quantum may have under the Employment Agreement including, without limitation,
those payments and benefits described in Section 3.2 of the Employment
Agreement. By executing this Agreement, Goad acknowledges and agrees that he is
waiving and releasing Tecstar and Quantum from any rights he may have under the
Employment Agreement.

3. Covenant Not to Compete. Goad covenants and agrees that for a period of one
(1) year following the Effective Date (“Restricted Period”), he shall not within
the United States or Canada (“Restricted Area”), in any manner, directly or
indirectly, through intermediaries or other persons or entities, either as
owner, shareholder, director, officer, agent, consultant, creditor,
representative, investor, partner, employee, or on behalf of any other person or
entity, or

 

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in any other capacity whatsoever (i) obtain employment with Tecstar, without the
prior consent of Quantum which consent will not be unreasonably withheld, (ii)
engage in, assist, provide capital, services, advice or information to, or in
any manner whatsoever become associated with any business or enterprise that
engages in a “Competitive Business” (as defined herein), or (iii) interfere with
or attempt in any manner to interfere or disrupt any relationship or agreement
between Tecstar or Quantum and any of its customers, employees, agents,
representatives or others doing business with Tecstar or Quantum. For this
purpose, a Competitive Business means limited volume production programs for
OEM’s substantially similar in nature to the programs now or previously executed
by Tecstar for General Motors and/or Ford including, without limitation, the
Chevrolet S-10 Xtreme, Chevrolet Tahoe Z71, Chevrolet Colorado Canyon (Skid
Plate), Chevrolet Silverado SS, and the Ford Foose F150.

Goad acknowledges that (i) the provisions of this Section 3 of the Agreement are
essential to Tecstar and Quantum; (ii) neither Tecstar nor Quantum would enter
into this Agreement if it did not include such provisions; (iii) the damages
sustained by Tecstar or Quantum as a result of any breach of such provisions
cannot be adequately remedied by damages; and, (iv) in addition to any other
right or remedy that the Tecstar and/or Quantum may have under this Agreement by
law or otherwise, Tecstar and/or Quantum will be entitled to injunctive and
other equitable relief to prevent or curtail any breach of any such provisions.

4. Mutual Release and Indemnification.

a. In consideration for and as a condition to the payments and benefits provided
by Tecstar to Goad under Section 2 of this Agreement, Goad hereby agrees to
execute a Release Certificate in the form attached hereto as Exhibit A. Goad
agrees to indemnify, defend and the Released Parties (as defined in the Release
Certificate) harmless from any and all claims arising from Goad’s breach of this
Agreement or the Release Certificate.

b. In consideration for Goad’s execution of this Agreement and the Release
Certificate, Tecstar and Quantum, for themselves and each of their affiliates,
agree to release Goad from any and all claims of any kind, known and unknown,
which they may now have or have ever had against Goad or arising out of Goad’s
employment relationship with them. Notwithstanding the foregoing, Goad
acknowledges and agrees that the foregoing release of any claim shall not apply
and shall have no effect to the extent the claim is based on any fraudulent act
or omission of Goad. Tecstar/Quantum agree to indemnify, defend and hold Goad
harmless from any and all claims (i) asserted by Tecstar/Quantum against Goad
with respect to a released claim and (ii) asserted by Goad against
Tecstar/Quantum arising from Tecstar/Quantum’s breach of this Agreement.

c. Tecstar and Quantum further agree to indemnify Goad for any obligations that
Goad may have under any personal guarantees executed by Goad during the course
of his employment with Tecstar, provided that, such guarantees (i) were given in
support of a legal obligation of Tecstar, (ii) were executed by Goad in
connection with his employment or status as an owner of Tecstar, and (iii) were
executed by Goad in good faith and in furtherance of the best interests of
Tecstar.

 

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5. Binding Effect. This Agreement shall be binding upon and inure to the benefit
of the heirs, successors, administrators, legal representatives, and assigns of
the parties.

6. Applicable Law/Cumulative Remedies. This Agreement is made under and shall be
governed by the laws of the State of Michigan. Each and every right and remedy
of any party under this Agreement shall be cumulative and non-exclusive of any
other right or remedy of any party under this Agreement, applicable law, or in
equity.

7. Partial Invalidity. If any provision of this Agreement is held by a court of
competent jurisdiction to be invalid, void, or unenforceable in any manner, the
remaining provisions of this Agreement shall nonetheless continue in full force
and effect without being impaired or invalidated in any way. In addition, if any
provision of this Agreement may be modified by a court of competent jurisdiction
such that it may be enforced, then that provision shall be so modified and as
modified shall be enforced.

8. Entire Agreement/Modification. This Agreement contains the entire
understanding of the parties and supersedes and forever terminates all prior and
contemporaneous representations, promises, agreements, understandings, and
negotiations of the parties, whether oral or written, with respect to the
subject matter hereof. There are no agreements or understandings of the parties
not expressly set forth herein. No parol evidence of any prior or
contemporaneous agreements, understandings, or negotiations shall govern or be
used to construe or modify this Agreement. This Agreement may only be amended,
modified, or supplemented by a duly executed writing signed by both parties.

9. Waiver. The failure of any party to complain of any act or omission on the
part of another party (no matter how long the same may continue) shall not be
deemed to be a waiver by such party of any of its rights under this Agreement.
No consent or waiver by any party at any time of any provision of this Agreement
shall be deemed a consent to any other action or waiver of any breach of any
other provision of this Agreement or a consent to any future action or later
breach of the same or any other provision of this Agreement.

10. Assistance of Counsel/Ambiguities. Each of the parties acknowledge that
either they and/or their counsel have reviewed this Agreement and the exhibits
and have suggested changes to its language and, therefore, any rule of
construction that any ambiguity shall be construed against the drafter of this
Agreement and the exhibits shall not apply in interpreting its provisions.

11. Execution in Counterparts. This Agreement may be executed in counterparts
and each executed counterpart, when taken together with the other executed
counterpart, shall constitute the complete Agreement.

 

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The undersigned have caused this Separation Agreement to be executed as of the
day and year first above written.

 

TECSTAR AUTOMOTIVE GROUP, INC. By:   /s/ Jeffrey P. Beitzel Its:   President

 

QUANTUM FUEL SYSTEMS TECHNOLOGIES WORLDWIDE, INC. By:   /s/ Kenneth R. Lombardo
Its:  

General Counsel

 

DOUGLASS C. GOAD /s/ Douglass C. Goad

 

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FORM OF RELEASE CERTIFICATE

(“You”) and Tecstar Automotive Group, Inc. (the “Company”) have agreed to enter
into this Release Certificate on the following terms:

On the Effective Date (as defined in that certain Separation Agreement between
you and the Company dated July 11, 2007), you will receive the payments and
benefits in accordance with the terms thereof.

In return for the consideration described in the Separation Agreement, you and
your representatives completely release Tecstar, Quantum, and their affiliated,
related, parent or subsidiary corporations, and their present and former
directors, officers and employees (the “Released Parties”) from all claims of
any kind, known and unknown, which you may now have or have ever had against any
of them, or arising out of (i) your status as a shareholder, (ii) your
employment or (iii) your relationship, with any of them, including all claims
arising from the termination of your employment, with the exception of the
obligations under Section 2 and 4 of the Separation Agreement, whether based on
contract, tort, statute, local ordinance, regulation or any comparable law in
any jurisdiction (“Released Claims”). By way of example and not in limitation,
the Released Claims shall include any claims arising under Title VII of the
Civil Rights Act of 1964, the Americans with Disabilities Act, the Worker
Adjustment and Retraining Notification Act, the Age Discrimination in Employment
Act, and the California Fair Employment and Housing Act, and any other
comparable state or local law, as well as any claims asserting wrongful
termination, breach of contract, breach of the covenant of good faith and fair
dealing, negligent or intentional misrepresentation, defamation and any claims
for attorneys’ fees. You also agree not to initiate or cause to be initiated
against any of the Released Parties any lawsuit, compliance review,
administrative claim, investigation or proceedings of any kind which pertain in
any manner to the Released Claims.

You acknowledge that the release of claims under the Age Discrimination in
Employment Act (“ADEA”) is subject to special waiver protection. Therefore, you
acknowledge the following: (a) you have had twenty-one (21) days to consider
this Release Certificate (but may sign it at any time beforehand, if you so
desire); (b) you can consult an attorney in doing so; (c) you can revoke this
Release Certificate within seven (7) days of signing it, by sending a certified
letter to that effect to the Company’s General Counsel; and that (d)
notwithstanding the foregoing, the portion of this Release Certificate that
pertains to the release of claims under ADEA shall not become effective or
enforceable and no funds shall be exchanged until the seven (7)-day revocation
period has expired, but that all other provisions of this Release Certificate
shall become effective upon its execution by the parties.

The parties agree that this Release Certificate and the Separation Agreement
contain all of our agreements and understandings with respect to their subject
matter, and may not be contradicted by evidence of any prior or contemporaneous
agreement, except to the extent that the provisions of any such agreement have
been expressly referred to in this Release Certificate or the Separation
Agreement as having continued effect. It is agreed that this Release Certificate
shall be governed by the laws of the State of Michigan. If any provision of this
Release Certificate or its application to any

 

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person, place or circumstance is held by a court of competent jurisdiction to be
invalid, unenforceable or void, then the remainder of this Release Certificate
and such provision as applied to other person, places and circumstances shall
remain in full force and effect.

Notwithstanding anything contained in this Release Certificate to the contrary,
the Released Parties acknowledge and agree that Goad is not releasing the
Released Parties from any claims (i) arising from or related to the
Tecstar/Quantum’s breach of this Agreement and (ii) for the costs of defense and
indemnification that Goad may have against the Tecstar and/or Quantum arising
from or related to Goad’s status as an officer or employee of Tecstar/Quantum,
whether such rights to indemnification arise from the Articles of Incorporation,
Bylaws or by statute, contract or otherwise.

 

      Date:     Douglass C. Goad      

 

TECSTAR AUTOMOTIVE GROUP, INC.     By:         Date:     Name:           Title:
         

 

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