Exhibit 10.5

Principal Trust Company

LOGO [g54969im1.jpg]

PLAN NAME:

The Executive Nonqualified Excess Plan of Quantum Fuel Systems

Technologies Worldwide, Inc.

TRUST AGREEMENT

Delaware Charter Guarantee & Trust Company

d/b/a Principal Trust Company

Principal Trust Company

1013 Centre Road

Wilmington, DE 19805

302-995-2131

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Table of Contents

 

Section 1. Trust Fund

   3

1.1

     Establishment of Trust    3

1.2

     Irrevocability of Trust    3

1.3

     Grantor Trust    3

1.4

     Non-Diversion of Funds    3

1.5

     Deposits    3

Section 2. Trustee and Committee

   4

2.1

     Committee    4

2.2

     Trustee’s Reliance    4

Section 3. Investment and Administration

   4

3.1

     General    4

3.2

     Collection of Contributions    4

3.3

     Appointment of Investment Manager    4

3.4

     Investment Decisions    5

3.5

     Investment in Short-Term Obligation    6

3.6

     Trustee’s Administrative Authority    6

3.7

     Substitution of Assets    9

3.8

     Trust Income    9

Section 4. Distributions from Trust

   9

4.1

     General    9

4.2

     Reporting and Withholding Requirements    9

4.3

     Direction by Committee    9

4.4

     Benefits Entitlement    10

4.5

     Payments by Employer    10

4.6

     Special Distributions    10

4.7

     Payments to Employer    10

Section 5. Trustee’s and Committee’s Responsibilities

   10

5.1

     General Standard of Care    10

5.2

     No Liability for Acts of Others    11

5.3

     Legal Counsel    11

5.4

     Liability Under Plan    11

Section 6. Trustee’s Accounts

   11

6.1

     Accounts    11

6.2

     Valuation of Trust    11

6.3

     Reports to Committee    12

6.4

     Right of Judicial Settlement    12

6.5

     Enforcement of Agreement    12

Section 7. Taxes; Compensation of Trustee

   13

7.1

     Taxes    13

7.2

     Compensation of Trustee; Expenses    13

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Section 8. Resignation and Removal of Trustee

   13

8.1

     Resignation or Removal of Trustee    13

8.2

     Appointment of Successor    13

8.3

     Succession    14

8.4

     Successor Bound by Agreement    14

Section 9. Trustee Responsibility Regarding Payments to Trust Beneficiaries When
Employer Is Insolvent

   14

9.1

     Insolvency    14

9.2

     General Creditors    14

9.3

     Amount of Payments After Resumption    15

Section 10 Amendment and Termination

   15

10.1

     Amendment    15

102

     Termination    15

Section 11 Miscellaneous

   15

11.1

     Binding Effect; Assignability    15

11.2

     Governing Law    16

11.3

     Notices    16

11.4

     Severability    16

11.5

     Waiver    16

11.6

     Non-Alienation    16

11.7

     Definitions    17

11.8

     Headings    17

11.9

     Construction of Language    17

11.10

     Counterparts    17

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Principal Trust Company

 

LOGO [g54969im2.jpg]   

Mailing Address:

 

P.O. Box 8963

Wilmington, DE 19899-8963

800-209-9010   Fax: 866-247-1245

   Trust Agreement

 

 

PLAN NAME:

The Executive Nonqualified Excess Plan of Quantum Fuel Systems Technologies

Worldwide, Inc.

TRUST AGREEMENT

THIS TRUST AGREEMENT (“Agreement”), made as of the      day of             ,
        , by and between Quantum Fuel Systems Technologies Worldwide, Inc.
(“Employer”) and Delaware Charter Guarantee & Trust Company, conducting business
as Principal Trust Company (“Trustee”).

W I T N E S S E T H:

WHEREAS, the Employer has adopted the Executive Nonqualified Excess Plan of
Quantum Fuel Systems Technologies Worldwide, Inc. (“Plan”) to provide benefits
for certain employees of the Employer and employees of participating employers
that have adopted the Plan;

WHEREAS, the Employer has incurred or expects to incur liability under the terms
of the Plan with respect to individuals participating in the Plan;

WHEREAS, the Employer wishes to establish a Trust (“Trust”) and to contribute to
the Trust assets that shall be held therein, subject to the claims of the
Employer’s creditors in the event of the Employer’s Insolvency, as herein
defined, until paid to the Plan participants and their beneficiaries in such
manner and as such times as specified in the Plan;

WHEREAS, it is the intention of the parties that the Trust shall constitute an
unfunded arrangement and shall not affect the status of the Plan as an unfunded
plan maintained for the purpose of providing deferred compensation for a select
group of management or highly compensated employees for purposes of Title I of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”); and

WHEREAS, the Employer intends to make contributions to this Trust to provide
itself with a source of funds to assist it in the meeting of its liabilities
under the Plan;

 

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NOW, THEREFORE, the parties do hereby establish the Trust and agree that the
Trust shall be comprised, held and disposed of as follows:

Section 1. Trust Fund:

 

1.1 Establishment of Trust. The Employer hereby establishes with the Trustee a
trust, in which may be deposited such sums of money as shall from time to time
be paid or delivered to the Trustee in accordance with the terms of the Plan and
which shall become the principal of the Trust to be held, administered and
disposed of by the Trustee as provided in this Agreement and in accordance with
any investment policy or guidelines established under the Plan and communicated
in writing to the Trustee. All such deposits, all investments and reinvestments
thereof and all earnings, appreciation and additions allocable thereto, less
losses, depreciation and expenses allocable thereto and any payments made
therefrom as authorized under the Plan or this Agreement shall constitute the
“Trust”.

 

1.2 Irrevocability of Trust. The Trust hereby established shall be irrevocable
and shall terminate only upon the complete distribution of the assets of the
Trust to the participants or their beneficiaries.

 

1.3 Grantor Trust. The Trust is intended to be a grantor trust of which the
Employer is the grantor within the meaning of subpart E, part I, subchapter J,
chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended (“Code”)
and shall be construed accordingly.

 

1.4 Non-Diversion of Funds. The principal of the Trust, and any earnings thereon
shall be held separate and apart from other funds of the Employer and except for
the payment of expenses, fees, indemnities and taxes properly charged to the
Trust under this Agreement; shall be used exclusively for the use and purposes
of Plan participants and general creditors as herein set forth. Plan
participants and their beneficiaries shall have no preferred claim on, or any
beneficial ownership interest in, any assets of the Trust. Any rights created
under the Plan and this Agreement shall be mere unsecured contractual rights of
Plan participants and their beneficiaries against the Employer. Any assets held
by the Trust will be subject to the claims of the Employer’s general creditors
under federal and state law in the event of Insolvency, as defined in
Section 9.1 herein.

 

1.5 Deposits. The Employer in its sole discretion, may at any time, or from time
to time, make additional deposits of cash or other property in trust with the
Trustee to augment the principal to be held, administered and disposed of by the
Trustee as provided in this Agreement. Neither the Trustee nor any Plan
participant or beneficiary shall have the right to compel such deposits.

 

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Section 2. Trustee and Committee:

 

2.1 Committee. The Employer shall certify to the Trustee the names and specimen
signatures of the members of the Committee (“Committee”) appointed by the
Employer to administer the Plan and give directions to the Trustee. Such
certification shall include directions as to the number of signatures required
for any communication or direction to the Trustee. The Employer shall promptly
give notice to the Trustee of changes in the membership of the Committee. The
Committee may also certify to the Trustee the name of any agent, together with a
specimen signature of any such agent who is not a member of the Committee,
authorized to act for the Committee in relation to the Trustee. The Committee
shall promptly give notice to the Trustee of any change in any agent authorized
to act on behalf of the Committee. For all purposes under this Agreement, until
any such notice is received by the Trustee, the Trustee shall be fully protected
in assuming that the membership of the Committee and the authority of any agent
authorized to act on its behalf remain unchanged.

 

2.2 Trustee’s Reliance. The Trustee may rely and act upon any certificate,
notice or direction of the Committee, or of an agent authorized to act on its
behalf, or of the Employer which the Trustee believes to be genuine and to have
been signed by the person or persons duly authorized to sign such certificate,
notice, or direction.

Section 3. Investment and Administration:

 

3.1 General. The Trust shall be held by the Trustee and shall be invested and
reinvested as hereinafter provided in this Section 3, without distinction
between principal and income and without regard to the restrictions of the laws
of any jurisdiction relating to the investment of trusts.

 

3.2 Collection of Contributions. The Trustee shall have no authority over and
shall have no responsibility for the administration of the Plan. The Trustee
shall be under no duty to enforce the payment of any contribution to the Trust
and shall not be responsible for the adequacy of the Trust to satisfy any
obligations for benefits, expenses, and liabilities under the Plan. In addition
to making contributions, the Employer, through the Committee, shall furnish the
Trustee with such information and data relative to the Plan as is necessary for
the proper administration of the Trust.

 

3.3 Appointment of Investment Manager.

 

  (a) The Committee may, in its discretion, appoint an investment manager
(“Investment Manager”) to direct the investment and reinvestment of all or any
portion of the Trust. Any such Investment Manager shall either (i) be registered
as an investment adviser under the Investment Advisers Act of 1940, as amended
(“Investment Advisers Act”); (ii) be a bank, as defined in the Investment
Advisers Act; or (iii) be an insurance company qualified to perform investment
services under the laws of more than one state.

 

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  (b) The Committee shall give written notice to the Trustee of the appointment
of an Investment Manager pursuant to Section 3.3(a). Such notice shall include:
(i) a specification of the portion of the Trust to which the appointment
applies; (ii) a certification by the Committee that the investment Manager
satisfies the requirements of Section 3.3(a)(i), (ii) or (iii); (iii) a copy of
the instruments appointing the Investment Manager and evidencing the Investment
Manager’s acceptance of the appointment; (iv) directions as to the manner in
which the Investment Manager is authorized to give instructions to the Trustee,
including the persons authorized to give instructions and the number of
signatures required for any written instruction; (v) a specimen signature of the
Investment Manager; (vi) an acknowledgment by the Investment Manager that it is
a fiduciary of the Trust; and (vii) if applicable, a certificate evidencing the
Investment Manager’s current registration under the Investment Advisers Act. For
purposes of this Agreement, the appointment of an Investment Manager pursuant to
this Section 3.3 shall become effective as of the effective date specified in
such notice, or, if later, as of the date on which the Trustee receives proper
notice of such appointment.

 

  (c) The Committee shall give written notice to the Trustee of the resignation
or removal of an Investment Manager previously appointed pursuant to this
Section 3.3. From and after the date on which the Trustee receives such notice,
or, if later, the effective date of the resignation or removal specified in such
notice, the Committee shall be responsible, in accordance with Section 3.4, for
the investment and reinvestment of the portion of the Trust previously managed
by such Investment Manager, until such time as a successor Investment Manager
has been duly appointed pursuant to this Section 3.3.

 

  (d) The Trustee may rely and act upon any certificate, notice or direction of
the Investment Manager which the Trustee believes to be genuine and to have been
signed by the Investment Manager.

 

3.4 Investment Decisions.

 

  (a) The Trustee shall invest and reinvest the Trust in accordance with the
directions of the Committee, or, to the extent provided in Section 3.3, in
accordance with the directions of an Investment Manager. The Trustee shall be
under no duty or obligation to review any investment to be acquired, held or
disposed of pursuant to such directions nor to make any recommendation with
respect to the disposition or continued retention of any such investment. The
Trustee shall have no liability or responsibility for its action or inaction
pursuant to the direction of, or its failure to act in the absence of directions
from, the Committee or an Investment Manager, except to the extent provided in
Section 5.2. The Employer hereby agrees to indemnify the Trustee and hold it
harmless from and defend it against any claim or liability which may be asserted
against the Trustee by reason of any action or inaction by it pursuant to a
direction by the Committee or by an Investment Manager or failing to act in the
absence of any such direction.

 

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  (b) The Committee or an Investment Manager appointed pursuant to Section 3.3
may, at any time and from time to time, issue orders for the purchase or sale of
securities directly to a broker; and in order to facilitate such transaction,
the Trustee upon request shall execute and deliver appropriate trading
authorizations. Written notification of the issuance of each such order shall be
given promptly to the Trustee by the Committee or the Investment Manager, and
the execution of each such order shall be confirmed by written advice to the
Trustee by the broker. Such notification shall be authority for the Trustee to
pay for securities purchased against receipt thereof and to deliver securities
sold against payment therefor, as the case may be.

 

  (c) To the extent that neither the Committee nor an Investment Manager
furnishes directions as to the investment of the Trust, the Trustee shall invest
and reinvest the Trust in any stable-value investment currently available to the
Trust. If no stable-value investment is currently available to the Trust, the
Trustee shall invest and reinvest the portion of the Trust subject to this
section 3.4(c) in an investment generally recognized as having the lowest
investment risk of all investments available to the Trust.

 

3.5 Investment in Short-Term Obligation. Notwithstanding any provisions of this
Section 3 to the contrary, the Trustee or its designee, upon the direction of
the Committee, may retain uninvested cash or cash balances, in whatever portion
of the Trust that it may deem advisable, without being required to pay interest
thereon. Pending investment, and if directed to do so by the Committee, the
Trustee may temporarily invest any funds held or received by it for investment
in an investment fund established to invest funds held thereunder in commercial
paper or in obligations of, or guaranteed by, the United States government or
any of its agencies.

 

3.6 Trustee’s Administrative Authority.

 

  (a) The Trustee or its designee is authorized and empowered to perform only
those duties and functions expressly set out in this Agreement. The Trustee will
not be under any duty to take any action other than those actions specified in
this Agreement unless it expressly agrees in writing to do so. The Trustee or
its designee is authorized and empowered:

 

  (i)

to invest and reinvest part or all of the Trust in accordance with investment
policies which may be established by the Committee from time to time in such
assets as the Committee or Investment Manager may direct (including common and
preferred stocks of the Employer), bonds, debentures, mutual fund shares, notes,
commercial paper, treasury bills, options, partnership interests, venture
capital investments, any common, commingled, or pooled investment funds
(including such funds for which the Trustee serves as investment manager),
contracts and policies issued by an insurance company (including affiliates of
the

 

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Trustee), any interest bearing deposits held by any bank or similar financial
institution (including affiliates of the Trustee), and any other real or
personal property;

 

  (ii) in accordance with directions from the Committee, to apply for, pay
premiums on and maintain in force on the lives of Plan participants, individual
ordinary or individual or group term or universal life insurance policies,
variable universal life insurance policies, survivorship life insurance policies
or annuity policies (“policies”) (including any policies issued by an affiliate
of the Trustee) and to have with respect to such policies all of the rights,
powers, options, privileges and benefits usually comprised in the term
“incidents of ownership” and normally vested in an owner of such policies,
except the Trustee shall have no power to name a beneficiary of the policy other
than the Trust; to assign the policy (as distinct from conversion of the policy
to a different form) other than to a successor trustee; or to loan to any person
the proceeds of any borrowing against such policy;

 

  (iii) to sell, exchange, convey, transfer or dispose of and also to grant
options with respect to any property, whether real or personal, at any time held
by it, and any sale may be made by private contract or by public auction, and
for cash or upon credit, or partly for cash and partly upon credit, and no
person dealing with the Trustee shall be bound to see to the application of the
purchase money or to inquire into the validity, expediency or propriety of any
such sale or other disposition;

 

  (iv) to retain, manage, operate, repair and rehabilitate and to mortgage or
lease for any period any real estate held by it and, in its discretion, cause to
be formed any corporation or trust to hold title to any such real property;

 

  (v) to borrow or raise monies for the purposes of the Trust from any lender,
except the Trustee, in its individual capacity, and for any sum so borrowed to
issue its promissory note as Trustee and to secure the repayment thereof by
pledging all or any part of the Trust, and no person lending money to the
Trustee shall be bound to see to the application of the money loaned or to
inquire into the validity, expediency of propriety of any such borrowing;

 

  (vi) to make distributions in cash upon the direction of the Employer through
the Committee;

 

  (vii) to vote in person or by proxy on any stocks, bonds, or other securities
held by it, including any shares of mutual funds held by it, to exercise any
options appurtenant to any stocks, bonds or other securities for the conversion
thereof into other stocks, bonds or securities, or to exercise any rights to
subscribe for additional stocks, bonds or other securities and to make any and
all necessary payment therefor and to enter into any voting trust;

 

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  (viii) with respect to any investment, to join in, dissent from, or oppose any
action or inaction of any corporation, or of the directors, officers or
stockholders of any corporation, including, without limitation, any
reorganization, recapitalization, consolidation, liquidation, sale or merger;

 

  (ix) to settle, adjust, compromise, or submit to arbitration any claims, debts
or damages due or owing to or from the Trust;

 

  (x) to deposit any property with any protective, reorganization or similar
committee, to delegate power thereto and to pay and agree to pay part of its
expenses and compensation and any assessments levied with respect to any
property so deposited; and

 

  (xi) to delegate administrative duties to a designee.

 

  (b) In addition to and not by way of limitation of any other powers conferred
upon the Trustee by law or other provisions of this Agreement, but subject to
Section 1.4 and this Section 3, the Trustee is authorized and empowered, in its
discretion:

 

  (i) to commence or defend suits or legal proceedings, and to represent the
Trust in all suits or legal proceedings in any court or before any other body or
tribunal;

 

  (ii) to register securities in its name or in the name of any nominee or
nominees with or without indication of the capacity in which the securities
shall be held, or to hold securities in bearer form;

 

  (iii) to employ such agents, brokers, counsel, accountants, actuaries or other
professionals, as the Trustee shall deem advisable and to be reimbursed by the
Employer for their reasonable expenses and compensation;

 

  (iv) to make, execute, acknowledge, and deliver any and all deeds, leases,
assignments and instruments; and

 

  (v) generally to do all acts which the Trustee may deem necessary or desirable
for the administration and protection of the Trust.

 

  (c) Notwithstanding any powers granted to the Trustee pursuant to this
Agreement or by applicable law, the Trustee shall not have any power that could
give the Trust the objective of carrying on a business and dividing the gains
therefrom, within the meaning of Section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Code.

 

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3.7 Substitution of Assets. The Employer shall have the right at any time, and
from time to time, in its sole discretion, to substitute assets of equal fair
market value for any asset held by the Trust. This right is exercisable by the
Employer in a non fiduciary capacity Without the approval or consent of any
person in a fiduciary capacity.

 

3.8 Trust Income. During the term of this Trust, all income received by the
Trust, net of expenses and taxes, shall be accumulated and reinvested.

Section 4. Distributions from Trust:

 

4.1 General. The Employer shall deliver to the Trustee a schedule (“Payment
Schedule”) that indicates the amounts payable in respect of each Plan
participant (and his or her beneficiaries), that provides a formula or other
instructions acceptable to the Trustee for determining the amounts so payable,
the form in which such amount is to be paid (as provided for or available under
the Plan), and the time of commencement for payment of such amounts. Except as
otherwise provided herein, the Trustee shall make payments to the Plan
participants and their beneficiaries in accordance with such Payment Schedule.

 

4.2 Reporting and Withholding Requirements. The Employer shall provide for the
reporting and withholding of any federal, state or local taxes that may be
required to be withheld with respect to the payment of benefits pursuant to the
terms of the Plan and shall pay amounts withheld to the appropriate taxing
authorities. Upon the occurrence of a distribution pursuant to the Plan, the
Committee shall direct the Trustee to send the Employer an amount, as determined
by the Employer, sufficient for the Employer to discharge its withholding
obligations with respect to the distribution.

 

4.3 Direction by Committee.

 

  (a) A direction by the Committee to make a distribution from the Trust shall:

 

  (i) be made in writing;

 

  (ii) specify the amount of the payment to be distributed (net of the amount
sufficient for the Employer to discharge its withholding obligation), the date
such payment is to be made, the person to whom payment is to be made, and the
address to which the payment is to be sent;

 

  (iii) specify the amount determined by the Employer to be sufficient for the
Employer to discharge its withholding obligation; and

 

  (iv) be deemed to certify to the Trustee that such direction and any payment
pursuant thereto are authorized under the terms of the Plan.

 

  (b)

The Trustee shall be entitled to rely conclusively on the Committee’s
certification of its authority to direct a payment without independent

 

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investigation. The Trustee shall have no liability to any person with respect to
payments made in accordance with the provisions of this Section 4.

 

4.4 Benefits Entitlement. The entitlement of a Plan participant or his or her
beneficiaries to benefits under the Plan shall be determined by the Employer or
such party as it shall designate under the Plan, and any claim for such benefits
shall be considered and reviewed under the procedures set out in the Plan.

 

4.5 Payments by Employer. The Employer may make payment of benefits directly to
Plan participants or their beneficiaries as they become due under the terms of
the Plan. The Employer shall notify the Trustee of its decision to make payment
of benefits directly prior to the time amounts are payable to participants or
their beneficiaries. In addition, if the principal of the Trust, and any
earnings thereon, are not sufficient to make payments of benefits in accordance
with the terms of the Plan, the Employer shall make the balance of each such
payment as it falls due. The Trustee shall notify the Employer where principal
and earnings are not sufficient.

 

4.6 Special Distributions. Notwithstanding any other provision of this Trust
Agreement to the contrary, if at any time (i) the Trust is finally determined by
the Internal Revenue Service (“IRS”) not to be a “grantor trust,” with the
result that the income of the Trust is not treated as income of the Employer
pursuant to Sections 671 through 679 of the Code, (ii) a federal tax is finally
determined by the IRS to be payable by the Trust beneficiaries, or (iii) the
Trustee receives an opinion of counsel satisfactory to it to the effect that it
is likely that the IRS will determine that a tax will be payable by the Trust
beneficiaries as described in (ii) and it is likely that such determination will
be upheld, then the Trust shall immediately terminate and the assets paid as
soon as practicable by the Trustee to the Trust beneficiary as directed by the
Committee in accordance with Section 4.2.

 

4.7 Payments to Employer. Except as expressly provided in this Section 4, the
Employer shall have no right or power to direct the Trustee to return to the
Employer or to divert to others any of the Trust assets before all payments of
benefits have been made to Plan participants and their beneficiaries pursuant to
the terms of the Plan.

Section 5. Trustee’s and Committee’s Responsibilities:

 

5.1

General Standard of Care. The Trustee, the members of the Committee and any
Investment Manager shall at all times discharge their duties with respect to the
Trust solely in the interest of the Plan participants and their beneficiaries
and with the care, skill, prudence, and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of a like character and with
like aims, provided, however, that the Trustee shall incur no liability to any
person for any

 

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action taken pursuant to a direction, request or approval given by the Employer
which is contemplated by, and in conformity with, the terms of the Plan or this
Trust and is given in writing by the Employer. In the event of a dispute between
the Employer and a party, the Trustee may apply to a court of competent
jurisdiction to resolve the dispute.

 

5.2 No Liability for Acts of Others. No fiduciary under this Agreement shall be
liable for an act or omission of another person in carrying out any fiduciary
responsibility where such fiduciary responsibility is allocated to such other
person by this Agreement or pursuant to a procedure established in this
Agreement.

 

5.3 Legal Counsel. The Trustee may consult with legal counsel (who may be
counsel to the Employer) and may charge the expense to the Employer, concerning
any questions which may arise under this Agreement, and the opinions of such
counsel shall be full and complete protection with respect to any action taken,
or omitted, by the Trustee hereunder in good faith in accordance with the
opinion of such counsel.

 

5.4 Liability Under Plan. The duties and Obligations of the Trustee shall be
limited to those expressly set forth in this Agreement, notwithstanding any
reference herein to the Plan. Notwithstanding any other provision of this Trust
Agreement, the Trustee and its officers, directors and agents hereunder shall be
indemnified and held harmless by the Employer and the Trust to the fullest
extent permitted by law against any and all costs, damages, expenses and
liabilities including, but not limited to, attorneys’ fees and disbursements
reasonably incurred by or imposed upon it in connection with any claim made
against it or in which it may be involved by reason of it being, or having been,
a Trustee hereunder, to the extent such amounts are not satisfied by fiduciary
liability insurance that may or may not be maintained by the Employer. If the
Employer does not pay such costs, expenses and liabilities in a reasonably
timely manner, the Trustee may obtain payment from the Trust.

Section 6. Trustee’s Accounts:

 

6.1 Accounts. The Trustee shall keep accurate and detailed accounts of all
investments, reinvestments, receipts, disbursements, and all other transactions
hereunder, and all such accounts and the books and records relating thereto
shall be open to inspection at all reasonable times by the Employer or the
Committee or persons designated by them.

 

6.2 Valuation of Trust. The Trustee or its designee shall value or cause to be
valued the Trust as of the last business day of each calendar quarter
(“Valuation Date”), and shall report to the Committee the value of the Trust as
of such date, within a reasonable time after the first day of the month next
following each Valuation Date.

 

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6.3 Reports to Committee.

 

  (a) Within sixty (60) days following the close of each calendar year, and
Within sixty (60) days following the effective date of the resignation or
removal of the Trustee as provided in Section 8.1, the Trustee shall render to
the Committee a written account of its administration of the Trust during such
year or during the period from the close of the last preceding year to the date
of such removal or resignation, setting forth all investments, receipts,
disbursements and other transactions effected by it, including a description of
all securities and investments purchased and sold with the cost or net proceeds
of such purchases or sales (accrued interest paid or receivable being shown
separately) and showing all cash, securities and other property held in the
Trust as of the date of such removal or resignation, as the case may be.

 

  (b) The Committee shall notify the Trustee in writing of any objection or
exception to an account so rendered not later than sixty (60) days following the
date on which the Account was mailed to the Committee, whereupon the Committee
and the Trustee shall cooperate in resolving such objection or exception.

 

  (c) If the Committee has not communicated in writing to the Trustee within
sixty (60) days following the mailing of the account to the Committee any
exception or objection to the account, the account shall become an account
stated at the end of such sixty (60) day period. If the Committee does
communicate such an exception or objection, as to which it later becomes
satisfied, the Committee shall thereupon indicate in writing its approval of the
account, or of the account as amended, and the account shall thereupon become an
account stated.

 

  (d) Whenever an account shall have become an account stated as aforesaid, such
account shall be deemed to be finally settled and shall be conclusive upon the
Trustee, the Employer and all persons having or claiming to have any interest in
the Trust or under the Plan, and the Trustee shall be fully and completely
discharged and released to the same extent as if the account had been settled
and allowed by a judgment or decree of a court of competent jurisdiction in an
action or proceeding in which the Trustee, the Employer, and all persons having
or claiming to have any interest in the Trust or under the Plan were parties.

 

6.4 Right of Judicial Settlement. Notwithstanding the provisions of Section 6.3
the Trustee, the Committee, and the Employer, or any of them, shall have the
right to apply at any time to a court of competent jurisdiction for the judicial
settlement of the Trustee’s account. In any such case, it shall be necessary to
join as parties thereto only the Trustee, the Committee and the Employer; and
any judgment or decree which may be entered therein shall be conclusive upon all
persons having or claiming to have any interest in the Trust or under the Plan.

 

6.5

Enforcement of Agreement. To protect the Trust from expenses which might
otherwise be incurred, the Employer and the Committee shall have authority,

 

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either jointly or severally, to enforce this Agreement on behalf of all persons
claiming any interest in the Trust or under the Plan, and no other person may
institute or maintain any action or proceeding against the Trustee or the Trust
in the absence of written authority from the Employer, the Committee or a
judgment of a Court of competent jurisdiction that in refusing authority the
Committee acted fraudulently or in bad faith.

Section 7. Taxes; Compensation of Trustee:

 

7.1 Taxes. Any taxes that may be imposed upon the Trust or the income therefrom
shall be deducted from and charged against the Trust.

 

7.2 Compensation of Trustee Expenses. The Trustee shall receive for its services
hereunder such compensation as may be agreed upon in writing from time to time
by the Employer and the Trustee and shall be reimbursed for its reasonable
expenses, including counsel fees, incurred in the performance of its duties
hereunder. The Trustee shall deduct from and charge against the Trust such
compensation and all such expenses unless previously paid by the Employer.

Section 8. Resignation and Removal of Trustee:

 

8.1 Resignation or Removal of Trustee. The Trustee may resign as trustee
hereunder at any time by giving sixty (60) days prior written notice to the
Employer. Notwithstanding the preceding, the Trustee may resign immediately upon
the occurrence of an unusual event which in the sole discretion of the Trustee
affects the viability of the Employer and in such event the Employer shall
promptly appoint a qualified successor trustee. The Employer may remove the
Trustee as trustee hereunder at any time by giving the Trustee prior written
notice of such removal, which shall include notice of the appointment of a
successor trustee. Such removal shall take effect not earlier than sixty
(60) days following receipt of such notice by the Trustee unless otherwise
agreed upon by the Trustee and the Employer.

 

8.2 Appointment of Successor. In the event of the resignation or removal of the
Trustee, a successor trustee shall be appointed by the Employer. Except as is
otherwise provided in Section 8.1, such appointment shall take effect upon
delivery to the Trustee of an instrument so appointing the successor and an
instrument of acceptance executed by such successor, both of which instruments
shall be duly acknowledged before a notary public. If within sixty (60) days
after notice of resignation has been given by the Trustee, a successor has not
been appointed as provided in Section 8.1, the Trustee may apply to any court of
competent jurisdiction for the appointment of such successor or for
instructions. All expenses of the Trustee in connection with the preceding shall
be allowed as administrative expenses of the Trust.

 

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8.3 Succession.

 

  (a) Upon the appointment of a successor hereunder, the Trustee shall transfer
and deliver all assets of the Trust to such successor; provided, however, that
the Trustee may reserve such sum of money as it shall in its sole and absolute
discretion deem advisable for payment of its fees and all expenses including
counsel fees in connection with the settlement of its account, and any balance
of such reserve remaining after the payment of such charges shall be paid over
to the successor trustee. If such reserve shall be insufficient to pay such
charges, the Trustee shall be entitled to recover the amount of any deficiency
from the Employer, from the successor trustee, of from both.

 

  (b) Upon the completion of the succession and the rendering of its final
accounts, the Trustee shall have no further responsibilities whatsoever under
this Agreement.

 

8.4 Successor Bound by Agreement. All the provisions of this Agreement shall
apply to any successor trustee with the same force and effect as if such
successor had been originally named herein as the trustee hereunder.

Section 9. Trustee Responsibility Regarding Payments to Trust Beneficiaries When
Employer Is Insolvent:

 

9.1 Insolvency. The Trustee shall cease payment of benefits to Plan participants
and their beneficiaries if the Employer is Insolvent. The Employer shall be
considered “Insolvent” for purposes of this Trust Agreement if (i) the Employer
is unable to pay its debts as they become due, or (ii) the Employer is subject
to a pending proceeding as a debtor under the United States Bankruptcy Code.

 

9.2 General Creditors. At all times during the continuance of this Trust, the
principal and income of the Trust shall be subject to claims of general
creditors of the Employer.

 

  (a) The Board of Directors and the Chief Executive Officer the Employer shall
have the duty to inform the Trustee in writing of the Employer’s Insolvency. If
a person claiming to be a creditor of the Employer alleges in writing to the
Trustee under penalty of perjury that Employer has become Insolvent, the Trustee
shall request from the independent accountant regularly auditing the financial
records of the Employer, a determination of whether the Employer is Insolvent
and, pending such determination, the Trustee shall discontinue payment of
benefits to Plan participants or their beneficiaries.

 

  (b) Unless the Trustee has actual knowledge of the Employer’s Insolvency, or
has received notice from the Employer or a person claiming to be a creditor
alleging that the Employer is Insolvent, the Trustee shall have no duty to
inquire whether the Employer is Insolvent The Trustee may in all events rely on
the determination of the independent accountant regularly auditing the financial
records of the Employer as to whether the Employer is Insolvent;

 

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  (c) If at any time the Trustee has received a determination from the
independent accountant regularly auditing the financial records of the Employer
that the Employer is Insolvent, the Trustee shall discontinue payments to Plan
participants or their beneficiaries and shall hold the assets of the Trust for
the benefit of the Employer’s general creditors. Nothing in this Trust Agreement
shall in any way diminish any rights of Plan participants or their beneficiaries
to pursue their rights as general creditors of the Employer with respect to
benefits due under the Plan or otherwise.

 

  (d) The Trustee shall resume the payment of benefits to Plan participants or
their beneficiaries in accordance with the terms of this Agreement only after
the Trustee has received a determination from the independent accountant
regularly auditing the financial records of the Employer that the Employer is
not Insolvent (or is no longer Insolvent).

 

  (e) During the continuance of the Trust, the fees and expenses of the Trustee
shall be paid from the Trust Fund if not paid by the Employer.

 

9.3 Amount of Payments After Resumption. Provided that there are sufficient
assets, if the Trustee discontinues the payment of benefits from the Trust
pursuant to this Section 9 and subsequently resumes such payments, the first
payment following such discontinuance shall include the aggregate amount of all
payments due to Plan participants or their beneficiaries under the terms of the
Plan for the period of such discontinuance, less the aggregate amount of any
payments made to Plan participants or their beneficiaries by the Employer in
lieu of the payments provided for hereunder during any such period of
discontinuance.

Section 10. Amendment and Termination:

 

10.1 Amendment. This Trust Agreement may be amended by a written instrument
executed by the Trustee and the Employer. Notwithstanding the foregoing, no such
amendment shall conflict with the terms of the Plan or shall make the Trust
revocable after it has become irrevocable in accordance with Section 1.2 hereof.

 

1.0.2 Termination. The Trust shall not terminate until the date on which Plan
participants and their beneficiaries are no longer entitled to benefits under
the terms of the Plan. Upon termination of the Trust, any remaining assets less
any Outstanding Trust fees and expenses shall be returned to the Employer.

Section 11. Miscellaneous:

 

11.1

Binding Effect; Assignability. This Agreement shall be binding upon, and the
powers granted to the Employer and the Trustee, respectively, shall be
exercisable by the respective successors and assigns of the Employer and the

 

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Trustee. Any entity which shall, by merger, consolidation, purchase, or
otherwise, succeed to substantially all the trust business of the Trustee shall,
upon such succession and without any appointment or other action by the
Employer, be and become successor trustee hereunder.

 

11.2 Governing Law. This Agreement and the trust created and the Trust held
hereunder shall be interpreted in accordance with the laws of the state of
Delaware, except to the extent that such laws are preempted by the federal laws
of the United States of America. All contributions to the Trust shall be deemed
to take place in the state of Delaware.

 

11.3 Notices. Any communication to the Trustee, including any notice, direction,
designation, certification, order, instruction, or objection shall be in writing
and signed by the person authorized under the Plan to give the communication.
The Trustee shall be fully protected in acting in accordance with these written
communications. Any notice required or permitted to be given to a party
hereunder shall be deemed given if in writing and hand delivered or mailed,
postage prepaid, certified mail, return receipt requested, to such party at the
following address or at such other address as such party may by notice specify:

If to the Employer:

Quantum Fuel Systems Technologies Worldwide, Inc.

17872 Cartwright Rd.

Irvine, CA 92614

Attention: Brian Olson

If to the Trustee:

Principal Trust Company

P.O. Box 8963

Wilmington, DE 19899

Attention: Trust Services

 

11.4 Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity of enforceability of the remaining
provisions.

 

11.5 Waiver. Failure of any party to insist at any time or times upon strict
compliance with any provision of this Agreement shall not be a waiver of such
provision at such time or any later time unless in a writing designated as a
waiver and signed by or on behalf of the party against whom enforcement of the
waiver is sought.

 

11.6 Non-Alienation. No interest, right or claim in or to any part of the Trust
or any payment therefrom shall be assignable, transferable or subject to sale,
mortgage, pledge, hypothecation, commutation, anticipation, garnishment,
attachment, execution, or levy of any kind, and the Trustee and the Committee
shall not recognize any attempt to assign, transfer, sell, mortgage, pledge,
hypothecate, commute, or anticipate the same, except to the extent required by
law.

 

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11.7 Definitions. Unless the context of this Agreement clearly indicates
otherwise, the terms defined in the Plan shall, when used herein, have the same
meaning as in the Plan.

 

11.8 Headings. The headings of sections are included solely for convenience of
reference. If there is any conflict between such headings and the text of the
Agreement, the text shall control.

 

11.9 Construction of Language. Whenever appropriate in this Agreement, words
used in the singular may be read in the plural; words used in the plural may be
read in the singular; and words importing the masculine gender shall be deemed
equally to refer to the female gender or the neuter. Any reference to a section
number shall refer to a section of this Agreement, unless otherwise indicated.

 

11.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.

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

 

EMPLOYER      Quantum Fuel Systems Technologies Worldwide, Inc. By:   

/s/ Brian Olson

      Authorized Officer    Date:    November 1, 2007    Delaware Charter
Guarantee & Trust Company, conducting business as Principal Trust Company By:   

/s/ Carol Burns

      Authorized Officer    Date:   

November 2, 2007

  

 

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