Exhibit 10.8

LEASE AGREEMENT

dated as of November 6, 2012

between

AMUR FINANCE I LLC,

as Lessor

and

QUANTUM FUEL SYSTEMS TECHNOLOGIES WORLDWIDE, INC.

as Lessee

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

         Page  

1.

 

Interpretation

     1   

2.

 

General Obligations

     2   

3.

 

Lease Rent

     2   

4.

 

Delivery

     3   

5.

 

Termination and Return; Prepayment

     3   

6.

 

Default

     5   

7.

 

Representations and Warranties

     7   

8.

 

Lessee Covenants

     11   

9.

 

Conditions Precedent

     15   

10.

 

Equipment Security Interest Grant; Change in Tax Law; Pledge of Equipment and
Accounts

     16   

11.

 

Force Majeure

     18   

12.

 

Indemnities

     18   

13.

 

Limitation of Liability

     19   

14.

 

Further Assurances

     19   

15.

 

Entire Agreement

     19   

16.

 

Amendments

     20   

17.

 

Notices

     20   

18.

 

Assignment and Transfer

     21   

19.

 

Jurisdiction

     21   

20.

 

Expenses

     22   

21.

 

Governing Law

     22   

22.

 

Counterparts

     22   

23.

 

Confidentiality; Mutual Nondisclosure Agreement

     23   

24.

 

Survival after Termination Date

     24   

 

- i -

--------------------------------------------------------------------------------

Schedule 1

  

Definitions

Schedule 2

  

List of Sold Equipment

Schedule 3

  

Form of Delivery and Acceptance Certificate

Schedule 4

  

List of Sold Equipment, Additional Sold Equipment and Buyer-Purchased Equipment

Schedule 7.2(I) (Certain Disclosures)

 

- ii -

--------------------------------------------------------------------------------

LEASE AGREEMENT

This Lease Agreement (this “Agreement”), dated as of November 6, 2012 (the
“Closing Date”), is made between AMUR FINANCE I LLC, as lessor (“Lessor”), a
Delaware limited liability company and QUANTUM FUEL SYSTEMS TECHNOLOGIES
WORLDWIDE, INC., as lessee (“Lessee”), a Delaware corporation.

W I T N E S S E T H:

WHEREAS, pursuant to that certain Sale and Purchase Agreement, dated as of
November 6, 2012 (the “Sale and Purchase Agreement”), between Lessee and Lessor,
Lessee sold full legal and beneficial title to certain equipment identified on
Schedule 2  hereto (the “Sold Equipment”) to Lessor;

WHEREAS, it was the express intention of Lessee and Lessor that the Sale and
Purchase Agreement constituted a true sale of the Sold Equipment and not a
financing and Lessor is the owner of the Sold Equipment;

WHEREAS, upon the terms and conditions contained herein, Lessor agrees to lease
to Lessee, and Lessee agrees to lease from Lessor, and grant to Lessor a
security interest in, the Sold Equipment, the Additional Sold Equipment and the
Buyer-Purchased Equipment, (collectively, the Sold Equipment, the Additional
Sold Equipment and the Buyer-Purchased Equipment is hereinafter referred to as
the “Equipment”).

WHEREAS, this Agreement shall become effective upon the satisfaction of the
conditions precedent set forth in clause 9.

THEREFORE, in consideration of the premises and the covenants and agreements
contained herein, the parties hereto hereby agree as follows:

 

1. Interpretation

 

  1.1. The headings do not affect the interpretation of this Agreement and the
Schedules form part of this Agreement.

 

  1.2. In this Agreement, all capitalized terms shall have the meanings set
forth herein or in Schedule 1 hereto. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation.” The word “will”
shall be construed to have the same meaning and effect as the word “shall.”
Unless the context requires otherwise (a) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof and (b) all
references herein to clauses and Schedules shall be construed to refer to
clauses and Schedules to this Agreement. The term “including” when used in any
Operative Document means “including without limitation” except when used in the
computation of time periods.

--------------------------------------------------------------------------------

2. General Obligations

 

  2.1. During the period commencing on the Closing Date and ending on the
applicable Termination Date (the “Lease Period”), Lessor and Lessee agree, so
long as no Default exists and is then continuing or would result therefrom,
Lessor shall make available to Lessee the Equipment for use at Lessee’s
Facilities on the terms set forth herein.

 

  2.2. Lessee shall not sublease any of the Equipment to any other Person or
allow the Equipment to be removed from the Facilities or permit the Equipment to
be used by anyone other than Lessee’s employees, until the Equipment is
delivered to Lessor or title is transferred to Lessee in accordance with clause
5.2.

 

  2.3. Lessee represents, warrants and agrees that it does not have, and by
execution of this Agreement and/or any payment or performance hereunder shall
not have or obtain, any title to the Equipment, nor any property right or
interest, legal or equitable, therein, except its rights as expressly set forth
hereunder as a lessee of the Equipment subject to the terms hereof.

 

  2.4. Lessor shall not be liable in any way for the maintenance or performance
of the Equipment or any form of damages related to the Equipment whatsoever. The
Lessee has reviewed, and understands the express disclaimers of warranties by
the Lessor contained herein, including without limitation clause 7.3 hereof.

 

  2.5. Lessee and Lessor agree that this Lease is a “net lease” and that Lessee
shall have sole responsibility for all costs of any kind whatsoever related to
the use, operation or possession of the Equipment.

 

3. Lease Rent

 

  3.1. Lessee shall pay to Lessor on each Payment Date monthly rent of
$111,845.50, as such amount is adjusted to reflect any Lease Rent Adjustment, as
defined in Section 5 of the Sale and Purchase Agreement (“Lease Rent”). Payments
will be made by wire transfer to a collection account (account number
            ) at Deutsche Bank Trust Company Americas (the “Collection
Account”).

 

  3.2. The Lease Rent for the Equipment will be payable in arrears in
immediately available funds on each Payment Date. Lessee agrees that time is of
the essence to Lessor in Lessee’s making payments of the Lease Rent when such
payment is due.

 

  3.3.

Lessee’s obligation to pay any amount payable hereunder (including, without
limitation, Lease Rent (as adjusted to reflect any Lease Rent Adjustment),
Consideration or any indemnification obligation) shall be absolute and
unconditional and shall not be affected by any circumstance, including any

 

2

--------------------------------------------------------------------------------

  abatement, reduction or setoff, defense, counterclaim, recoupment or other
right that Lessee may have against the Lessor, its Affiliates or any other
person for any reason whatsoever. This Lease is a “hell or high water” lease and
is a non-cancelable obligation of Lessee and shall not terminate in the event of
any damage or destruction of the Equipment, if the Equipment becomes partly or
wholly unusable for Lessee’s purpose (or for any purpose) or for any other
reason or upon any event other than as expressly provided herein. The Lessee
waives the right to cancel the Lease, repudiate the Lease, reject the Equipment
in whole or in part, revoke acceptance of the Equipment, recover damages from
Lessor under warranty claims or for any other reason or grant any security
interest in the Equipment to any third party.

 

4. Delivery

 

  4.1. All of the Equipment shall be deemed to have been delivered by Lessor to
Lessee on the Closing Date for all purposes hereunder. The Lessee shall be
required to complete and deliver to Lessor a delivery and acceptance certificate
substantially in the form of Schedule 3 hereto (a “Delivery and Acceptance
Certificate”) upon actual physical delivery of each piece of Equipment.

 

  4.2. Each piece of Additional Equipment and Buyer-Purchased Equipment shall be
paid for out of the funds held in the Escrow Account in the manner provided in
Section 1(b) (as to Additional Equipment) and Section 5 (as to Buyer-Purchased
Equipment) of the Sale and Purchase Agreement.

 

  4.3. Lessee and Lessor agree that Schedule 4 to this Agreement, which
describes by category all of the Sold Equipment, Additional Sold Equipment and
Buyer-Purchased Equipment, shall be updated each time that Lessee executes a
Delivery and Acceptance Certificate with respect to any item of Additional
Equipment or Buyer-Purchased Equipment.

 

5. Termination and Return; Prepayment

 

  5.1. This Lease shall terminate on the earliest of (such date, the
“Termination Date”):

 

  (a) the Lease Expiration Date; or

 

  (b) the Early Termination Date; or

 

  (c) the Prepayment Termination Date.

 

  5.2. Upon the Termination Date, Lessee shall settle the Lease by purchasing
the Equipment, in which case:

 

  (i)

Lessee shall transfer consideration for such purchase to Lessor, on the
Termination Date, in an amount equal to (such amount, the “Consideration”):
(i) in the case of a Termination Date under Sections 5.1(a) and 5.1(b), 20% of
the Purchase Price, minus the

 

3

--------------------------------------------------------------------------------

  balance of any funds remaining in the Escrow Account or (ii) in the case of a
Termination Date under Section 5.1(c), the amount computed in accordance with
Section 5.4(c), minus the balance of any funds remaining in the Escrow Account;

 

  (ii) Lessee shall transfer the balance of any funds remaining in the Escrow
Account to Lessor; and

 

  (iii) full title in and to all of the Equipment shall be transferred by Lessor
to Lessee (or such third party as Lessee shall designate) free and clear of any
Liens on receipt by Lessor of the Consideration.

 

  5.3. Notwithstanding anything herein to the contrary, in the event of:

 

  (a) a Default pursuant to clause 6; or

 

  (b) the failure by Lessee to comply with this clause 5; or

 

  (c) any event which has had a Material Adverse Effect,

then, in any such event, Lessor shall have the right (but not the obligation) to
terminate this Agreement by delivery of written notice of such termination to
Lessee specifying, inter alia, the date on which such termination is to be
effective (such date, an “Early Termination Date” and the occurrence of such an
event, an “Early Termination”) and demand the return of any Equipment leased to
Lessee under this Agreement; provided, however, that any Default under clause
6.1(f) shall constitute an automatic termination event without any need for
Lessor to deliver written notice of such termination or demand and the Early
Termination Date, in such circumstances, shall occur on the date on which the
Default under clause 6.1(f) occurs.

 

  5.4. Lessee may prepay its obligations under the Lease, on the terms set forth
below:

 

  (a) Lessee shall provide sixty (60) days prior written notice of its intent to
prepay under this clause 5.4 to Lessor, which notice shall set forth the date
(the “Prepayment Termination Date”) on which such termination shall be
effective, which shall be no sooner than sixty (60) days after the date of such
notice, and shall be irrevocable;

 

  (b) Lessee shall pay to Lessor the present value of the Consideration with
respect to such Equipment calculated in accordance with clause 5.4(c) below; and

 

  (c) The present value of the Consideration shall be calculated with a discount
rate as follows:

 

  (i) If the Prepayment Termination Date is prior to the one-year anniversary of
the Closing Date: 4%;

 

4

--------------------------------------------------------------------------------

  (ii) If the Prepayment Termination Date occurs in months thirteen (13) through
twenty four (24): 18%;

 

  (iii) If the Prepayment Termination Date occurs after month twenty four (24):
23%.

 

6. Default

 

  6.1. Any of the following events shall be a “Default”:

 

  (a) Lessee fails to pay any amount due pursuant to this Agreement, and such
failure shall remain unremedied for five (5) days;

 

  (b) any representation or warranty made or deemed to be made by Lessee
hereunder or under any certificate or notice provided in connection herewith
shall be incorrect in any material respect; provided that with respect to any
representation or warranty that itself is qualified as to “materiality” or
“Material Adverse Effect,” such representation or warranty shall be incorrect in
any respect;

 

  (c) Lessee shall make or permit any unauthorized assignment or transfer of
this Agreement or any of Lessee’s rights and obligations hereunder, or Lessee
shall make or permit any unauthorized sublease or transfer of any Equipment or
the possession of such Equipment;

 

  (d) Lessee shall breach in any manner any covenant or undertaking hereunder,
or shall fail to perform or observe, in any respect, any other term or provision
contained in this Agreement and, to the extent capable of being remedied, such
breach of covenant or failure to perform or observe shall remain unremedied for
thirty (30) days (other than with respect clauses 6.1(a), 6.1(f), 6.1(i) and
8.2);

 

  (e)

Lessee shall (1) dissolve or cease conducting business operations; (2) become
insolvent or unable to pay its debts or fail or admit in writing its inability
generally to pay its debts as they become due; (3) make a general assignment,
arrangement or composition with or for the benefit of its creditors;
(4)(A) institute or have instituted against it, by a regulator, supervisor or
any similar official with primary insolvency, rehabilitative or regulatory
jurisdiction over it in the jurisdiction of its incorporation or organization or
the jurisdiction of its head or home office, a proceeding seeking a judgment of
insolvency or bankruptcy or any other relief under any bankruptcy or insolvency
law or other similar law affecting creditors’ rights, or a petition is presented
for its winding-up or liquidation by it or such regulator, supervisor or similar
official, or (B) have instituted against it a proceeding seeking a judgment of
insolvency or bankruptcy or any other relief under any bankruptcy or insolvency
law or other similar law affecting creditors’ rights, or a petition is presented
for its winding-up or liquidation, and such proceeding or petition is instituted
or presented by a

 

5

--------------------------------------------------------------------------------

  Person or entity not described in clause (A) above and either (I) results in a
judgment of insolvency or bankruptcy or the entry of an order for relief or the
making of an order for its winding-up or liquidation or (II) is not dismissed,
discharged, stayed or restrained in each case within fifteen (15) days, or such
other time period as may be agreed to by Lessor in its sole discretion provided
Lessee is defending such proceedings in good faith, of the institution or
presentation thereof; (5) have a resolution passed for its winding-up, official
management or liquidation (other than pursuant to a consolidation, amalgamation
or merger); (6) seek or becomes subject to the appointment of an administrator,
provisional liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its assets; (7) have a
secured party take possession of all or substantially all its assets or have a
distress, execution, attachment, sequestration or other legal process levied,
enforced or sued on or against all or substantially all its assets and such
secured party maintains possession, or any such process is not dismissed,
discharged, stayed or restrained, in each case within thirty (30) days
thereafter; (8) cause or subject to any event with respect to it which, under
the applicable laws of any jurisdiction, has an analogous effect to any of the
events specified in clauses (1) to (7) above (inclusive); or (9) take any action
in furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the foregoing acts;

 

  (f) the occurrence of any loss, theft or destruction of, or damage to, any of
the Equipment leased hereunder (other than ordinary wear and tear) that is not
covered by a policy of insurance under which Lessor has been named loss payee,
or the occurrence of any attachment of a Lien on any of the Equipment leased
hereunder which is not discharged within ten (10) days after Lessee first
becomes aware of such attachment;

 

  (g) the occurrence of a material default under any Insurance Agreements;

 

  (h) The Lessee shall fail at any time to maintain possession and control of
the Equipment, or any of the Equipment shall be attached, levied upon,
encumbered, pledged, seized or taken under any judicial process (except for any
attachment, levy, encumbrance or pledge caused to be placed on the Equipment by
or at the direction of Lessor) and such proceedings shall not be vacated, or
fully stayed, within ten (10) days thereof;

 

  (i) Lessee shall suffer the loss, revocation or termination of any material
license, permit, lease or agreement necessary to its business, fail to generally
pay its debts as they mature, or call a meeting for the purposes of compromising
its debts; and

 

  (j) Lessee shall deny or disaffirm its obligations under this Agreement.

 

6

--------------------------------------------------------------------------------

  6.2. Without prejudice to any other remedy at law or in equity, in the event
of an Early Termination triggered by the default provisions set out in clause
6.1, Lessee shall immediately pay to Lessor all reasonable and documented costs
and expenses of physical recovery of the Equipment, including all collection and
court costs (including reasonable and documented fees and expenses of outside
counsel to Lessor; provided that all documentation shall be subject to redaction
for privilege, confidentiality and similar purposes).

 

  6.3. In addition to any rights and remedies of Lessor provided by law or
hereunder and without prejudice to any other remedy at law or in equity of
Lessor, upon the occurrence and during the continuance of a Default, Lessor
shall have the right, without prior notice to Lessee, any such notice being
expressly waived by Lessee to the fullest extent permitted by law, to set off
any amount due and payable hereunder (including, without limitation, Lease Rent,
Consideration or any indemnification obligation) and appropriate such amounts
owed against any amounts then owing from Lessor to Lessee.

 

  6.4. Any amount due from Lessee to Lessor under this Agreement but not paid
when due shall accrue a late charge, until paid in full, at the lesser of
(i) the Late Charge Rate until paid in full and (ii) the maximum amount
permitted by applicable law.

 

7. Representations and Warranties

 

  7.1. Lessor represents and warrants to Lessee that:

 

  (a) it has the power to enter into and exercise its rights and perform and
comply with its obligations under each of the Operative Documents to which it is
a party; and

 

  (b) each of the Operative Documents to which it is a party is valid, legally
binding and enforceable against Lessor, except as such enforceability may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting or relating to creditors’ rights generally, and (ii) the
availability of injunctive relief and other equitable remedies.

 

  (c) In the absence of a Default or the continuance of a Default, Lessor
acknowledges that Lessee is entitled to the right of quiet enjoyment of the
Equipment except as provided in clause 8.2(b).

 

  7.2. Lessee represents and warrants to Lessor that:

 

  (a) it has the power and authority to own its assets and to conduct its
business as presently conducted;

 

  (b) it has the power to enter into and exercise its rights and perform and
comply with its obligations under each of the Operative Documents to which it is
a party;

 

7

--------------------------------------------------------------------------------

  (c) it is (i) duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization and (ii) qualified and in good
standing to do business wherever necessary to carry on its present business and
operations, including in the jurisdictions where the Equipment and Facilities
are located, except where the failure to be so qualified would not reasonably be
expected to have a Material Adverse Effect;

 

  (d) no vote or consent of, or similar action, or notice to, the holders of any
class of stock or membership interests is required, or, if required, such vote
or consent has been obtained or given, to authorize the execution and
performance by Lessee of the Operative Documents to which it is a party;

 

  (e) each of the Operative Documents to which it is a party is valid, legally
binding and enforceable against it, except as such enforceability may be limited
by (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting or relating to creditors’ rights generally or (ii) the availability of
injunctive relief and other equitable remedies;

 

  (f) all actions required to be taken and conditions required to be fulfilled
(including the obtaining of any necessary consents) have been taken or fulfilled
in all respects in order to enable it lawfully to enter into, exercise its
rights and perform and comply with its obligations under each of the Operative
Documents to which it is a party;

 

  (g) its entry into, exercise of its rights and/or performance of or compliance
with its obligations under each of the Operative Documents to which it is a
party do not and will not violate:

 

  (i) any Requirement of Law;

 

  (ii) any of its organizational documents;

 

  (iii) any agreement to which it is a party or to which its properties are
bound; or

 

  (iv) any judgment, court order or decree which is binding upon it;

 

  (h) no Default exists as result of or upon the Lessee’s entry into the
Operative Documents.

 

  (i) Lessee has conveyed full legal and beneficial title to the Sold Equipment
and on each Closing Date (as defined in the Sale and Purchase Agreement) will
convey full legal and beneficial title to the Additional Sold Equipment to
Lessor, including, without limitation, pursuant to the Sale and Purchase
Agreement, and, other than its lease interest in the Equipment, Lessee has no
legal, equitable or other interest in the Equipment;

 

  (j) Schedule 2 sets forth a full and complete list of the Sold Equipment;

 

8

--------------------------------------------------------------------------------

  (k) no person (other than Lessor and Lessee, but only to the extent of
Lessee’s lease interests hereunder) has any right, title or interest (including
any Lien or security interest) in the Sold Equipment and on each Closing Date
(as defined the Sale and Purchase Agreement) no person (other than Lessor and
Lessee , but only to the extent of Lessee’s lease interests hereunder) will have
any right, title or interest (including any Lien or security interest) in the
Additional Sold Equipment;

 

  (l) except as disclosed in the Lessee’s public filings with the U.S.
Securities and Exchange Commission or in a written disclosure schedule delivered
by Lessee to Lessor prior to the execution of this Lease, since December 31,
2011, no event has occurred that would reasonably be expected to have a Material
Adverse Effect;

 

  (m) Lessee possesses any and all authorizations, certifications and licenses
which are or may be required to operate its business and use the Sold Equipment
and on each Closing Date (as defined in the Sale and Purchase Agreement) will
possess any and all authorizations, certifications and licenses which are or may
be required to use the Additional Sold Equipment, except to the extent that the
failure to possess the same could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect;

 

  (n) Each of the consolidated financial statements of the Lessee provided to
the Lessor any notes thereto, have been prepared in accordance with GAAP on a
consistent basis throughout the periods indicated and each fairly presents or
will fairly present, in all material respects, the consolidated financial
position, results of operations and cash flows of the Lessor and its
consolidated Subsidiaries as at the respective dates thereof and for the
respective periods indicated therein (subject, in the case of unaudited
financial statements, to normal and recurring year-end adjustments);

 

  (o) the historical statements of fact specific to Lessee’s products and
services contained in the presentation provided to Lessor (the “Presentation”)
is true and correct in all material respects and there have been no subsequent
developments rendering any such historical information specific to Lessee’s
products and services in the Presentation supplied by Lessee to Lessor
inaccurate or incorrect;

 

  (p) Lessee is in compliance with all Requirements of Law except to the extent
that the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect;

 

9

--------------------------------------------------------------------------------

  (q) except as, in the aggregate, could not reasonably be expected to have a
Material Adverse Effect:

 

  (i) the facilities and properties owned or leased and operated by Lessee or
any of its Subsidiaries including without limitation, the Facilities and
Locations (the “Properties”) do not contain any Materials of Environmental
Concern in amounts or concentrations or under circumstances that constitute or
constituted a violation of, or could give rise to liability under, any
Environmental Law;

 

  (ii) neither Lessee or any of its Subsidiaries has received or is aware of any
notice of violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with Environmental Laws
with regard to any of the Properties or the business operated by Lessee or any
of its Subsidiaries (the “Business”), nor does Lessee have knowledge or reason
to believe that any such notice will be received or is being threatened;

 

  (iii) Materials of Environmental Concern have not been transported or disposed
of from the Properties in violation of, or in a manner or to a location that
could give rise to liability under, any Environmental Law, nor have any
Materials of Environmental Concern been generated, treated, stored or disposed
of at, on or under any of the Properties in violation of, or in a manner that
could give rise to liability under, any applicable Environmental Law;

 

  (iv) no judicial proceeding or governmental or administrative action is
pending or, to the knowledge of Lessee, threatened, under any Environmental Law
to which Lessee or any of its Subsidiaries is or will be named as a party with
respect to the Properties or the Business, nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law
with respect to the Properties or the Business;

 

  (v) there has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or related to
the operations of Lessee or any of its Subsidiaries in connection with the
Properties or otherwise in connection with the Business, in violation of or in
amounts or in a manner that could give rise to liability under Environmental
Laws;

 

  (vi) the Properties and all operations at the Properties are in compliance,
and have in the last five years been in compliance, with all applicable
Environmental Laws, and there is no contamination at, under or about the
Properties or violation of any Environmental Law with respect to the Properties
or the Business; and

 

  (vii) neither Lessee or any of its Subsidiaries has assumed any liability of
any other Person under Environmental Laws.

 

10

--------------------------------------------------------------------------------

  (r) subject to the terms of clause 10, this Agreement, together with such
filings and other actions required to be taken hereby, creates in favor of
Lessor a legal, valid and enforceable first priority Lien in the Specified
Assets (as defined below); and

 

  (s) there are no suits or proceedings pending or threatened before any court,
government agency or arbitrator, which, if determined adversely to Lessee would
have a Material Adverse Effect.

 

  7.3. Lessee acknowledges Lessor has given no warranty or any assurance
whatsoever relating to the quality, fitness for any purpose or relating in any
way to the performance of the Equipment.

LESSOR DISCLAIMS ALL WARRANTIES RELATING TO THE EQUIPMENT, INCLUDING BUT NOT
LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE. AND IN NO EVENT WILL LESSOR BE LIABLE FOR INCIDENTAL, CONSEQUENTIAL,
PUNITIVE OR SPECIAL DAMAGES OR DIRECT OR INDIRECT LOSS OF ANY KIND, INCLUDING
BUT NOT LIMITED TO LOST INCOME, LOST SALES, PROPERTY DAMAGE AND PERSONAL INJURY.

 

8. Covenants

 

  8.1. Lessor Covenant of Quiet Enjoyment

In the absence of a Default or the continuance of a Default, Lessor agrees to
permit Lessee the right of quiet enjoyment of the Equipment except as provided
in clause 8.2(b).

 

  8.2. Lessee Affirmative Covenants.

Lessee covenants that it shall:

 

  (a) (i) on the tenth calendar day of each calendar quarter (or, if such day is
not a Business Day, on the next Business Day) and (ii) upon the occurrence and
during the continuance of a Default, upon Lessor’s demand, provide Lessor with
updated Schedules of the Equipment, certified by a Responsible Officer, and
shall promptly inform Lessor of any damage to or loss of Equipment (except for
ordinary wear and tear).

 

  (b)

(1) Permit Lessor, or agents or representatives of Lessor, during normal
business hours and upon reasonable notice (except upon the occurrence of and
continuance of a Default, in which case at any time) to, no more than once per
month (or any time upon the occurrence and continuance of a Default), (i) audit
the Equipment, either through an inspection or through

 

11

--------------------------------------------------------------------------------

  any other means at Lessor’s sole discretion (including, without limitation,
Lessee’s preparation of abstracts and discussions between Lessor and Lessee’s
senior management); and (ii) inspect any Equipment or Lessee’s books and
records, solely as they relate to such Equipment (it being understood and agreed
that Lessee shall make and deliver to Lessor abstracts or reproductions of such
portions of such books and records promptly upon Lessor’s reasonable request)
(collectively, the “Equipment Information”). All audits and inspections shall be
at Lessor’s reasonable cost and expense, unless such audit and inspection occurs
during the continuance of a Default, in which case it shall be at Lessee’s
expense. (2) Lessor may conduct such audits or inspections at any Location or
Facility where Equipment Information may be stored, used or otherwise housed.
Lessor agrees that, except during the occurrence of a Default, it shall keep
confidential, and shall cause its agents and representatives to keep
confidential, and shall not, and shall not permit its agents or representatives
to, directly or indirectly, without the prior written consent of Lessee,
disclose to any third party or otherwise any Equipment Information except:
(i) to the extent the Equipment Information is already in the public domain
other than as a result of a disclosure by Lessor or its Affiliates in violation
of this clause; or (ii) to the extent reasonably required, to the Lessor’s
directors, agents, officers and employees; or (iii) to the extent reasonably
required, to its professional advisers; or (iv) as may be required by any
applicable law, court, stock exchange, regulation or regulator provided that,
Lessor shall notify Lessee of any required disclosure under this sub-section
(iv) and Lessee shall have the reasonable opportunity to dispute such required
disclosure, and Lessor shall cooperate to the extent reasonably practicable with
such disputation. Lessor shall not have a duty to make any audits or inspections
nor shall it incur any liability or obligation by reason of making or not making
any audits or inspections.

 

  (c) (1) Maintain its corporate existence, (2) comply in all material respects
with all Requirements of Law and pay when due all sales, use, property, excise
and other taxes and (3) procure and maintain in effect all licenses,
certificates, permits and other approvals and consents as required by any
Requirements of Law and that are material to Lessee’s possession, use, operation
and maintenance of the Equipment.

 

  (d) Until such time as the Equipment is returned, recovered or repossessed to
Lessor or purchased by Lessee, in each case in accordance with this Agreement,
afford the Equipment no less safekeeping protection than it affords its own
property.

 

  (e)

Procure and maintain insurance coverage reasonably satisfactory to Lessor for
the Equipment in such amounts and covering such risks as is usually carried by
companies engaged in a similar business. Lessee shall provide Lessor with a
certificate evidencing such insurance, naming Lessor as

 

12

--------------------------------------------------------------------------------

  additional insured and loss payee. Lessee shall provide Lessor (x) at least
thirty (30) days prior written notice of Lessee’s termination of any such
insurance and (y) written notice of cancellation of any such insurance policy
within two (2) Business Days of receipt of notice of cancellation of any
applicable insurance policy. Lessee shall be responsible for all loss, damage,
or disappearance of the Equipment from any cause whatsoever from the time each
item of Equipment is made available to Lessee at the Facilities until the Lease
is settled in accordance with clause 5.2 of this Agreement. If Lessee fails to
procure or maintain insurance in compliance with this Agreement, Lessor will be
entitled but not bound (without prejudice to any other rights of Lessor under
this Agreement) to procure and/or maintain (including, without limitation, by
payment of the premiums due or to effect) such insurances, or otherwise remedy
Lessee’s failure to do so (including, without limitation to effect and maintain
an “owner’s interest” policy) as it considers appropriate and Lessee shall
promptly pay upon demand, all expenses associated with such insurance obtained
by Lessor.

 

  (f) Furnish to Lessor:

 

  (i) as soon as available, but in any event within 120 days after the end of
each fiscal year of Lessee, (A) a copy of the consolidated balance sheet of
Lessee and its consolidated subsidiaries as at the end of such year and the
related consolidated statements of income and of cash flows for such year,
audited and certified (without qualification) by a firm of independent certified
public accountants of nationally recognized standing selected by Lessee and
reasonably acceptable to Lessor and set forth in each case in comparative form
the figures for the previous year; and (B) management’s discussion and analysis
of the important operational and financial developments during such fiscal year;
and

 

  (ii) as soon as available, but in any event not later than 60 days after the
end of each fiscal quarter of Lessee, (A) the unaudited consolidated balance
sheet of Lessee and its consolidated subsidiaries as at the end of such quarter
and the related unaudited consolidated statements of income and of cash flows
for such quarter and the portion of the fiscal year through the end of such
quarter, setting forth in each case in comparative form the figures for the
previous fiscal year, certified by a Responsible Officer as being prepared in
accordance with GAAP and fairly presenting the financial position and results of
operations for such quarter and period (subject to normal year-end audit
adjustments and absence of footnotes); and (B) management’s discussion and
analysis of the important operational and financial developments during such
fiscal quarter.

 

13

--------------------------------------------------------------------------------

All such financial statements furnished pursuant to this 8.2(f) shall be
prepared in accordance with GAAP, and shall fairly present, in all material
respects, Lessee’s and its applicable consolidated subsidiaries’ financial
condition and results of operations at the dates of and for the periods covered
by such statements. In addition, Lessee may satisfy its obligations under this
clause 8.2(f) by filing periodic reports under the Securities Exchange Act of
1934, provided that such reports conform in timing and content to the
requirements of this clause 8.2(f). Lessee’s obligation to furnish the
information described in (i) and (ii) shall be satisfied upon its EDGAR filing
of such information with the U.S. Securities and Exchange Commission.

 

  (g) At the time of the delivery of the financial statements provided for in
clause 8.2(f)(ii), a compliance certificate from a Responsible Officer of Lessee
certifying on behalf of Lessee that, to such Responsible Officer’s knowledge
after due inquiry, no Default has occurred and is continuing or, if any Default
has occurred and is continuing, specifying the nature and extent thereof.

 

  (h) Promptly after Lessee’s obtaining knowledge thereof, give notice to Lessor
of the occurrence of any Default. Each notice pursuant to this clause 8.2(i)
shall be accompanied by a statement of a Responsible Officer setting forth
details of the occurrence referred to therein and stating what action Lessee (or
any applicable Subsidiary thereof) proposes to take with respect thereto.

 

  (i) Defend Lessor’s interest in the Equipment from any Liens, claims or
demands of any Person at any time claiming the same or any interest therein.

 

  8.3. Lessee Negative Covenants. Lessee covenants that it shall not, without
Lessor’s prior written consent:

 

  (a) enter into any lease, financing, security or other agreement with any
third party for the Equipment unless such agreement is expressly contemplated
hereby;

 

  (b) take any action in relation to the Equipment which would or might
interfere with Lessor’s absolute and unencumbered title in the Equipment or
restrict Lessor’s ability to regain possession of the Equipment;

 

  (c) create or permit the creation of any Lien of any kind with respect to any
Equipment other than the Lien created hereunder;

 

  (d) other than any interests created by Lessee in favor of Lessor, at no time
shall Lessee have, or have the ability to create in favor of any third party,
any property or other interest in the Equipment or otherwise dispose of or
encumber any of the Equipment until the Lease has been settled in accordance
with clause 5.2;

 

14

--------------------------------------------------------------------------------

  (e) permit the Equipment to be used or maintained in any manner or condition
that would violate, or could result in the termination of, the insurance
policies carried by Lessee pursuant to the provisions of this Agreement; or

 

  (f) without the prior written consent of Lessor, make any alterations,
additions or improvements to the Equipment, or alter any serial numbers or other
identifying markings thereon.

 

9. Conditions Precedent

The effectiveness of this Agreement is subject to the satisfaction or, as to the
conditions applicable to Lessee described in (b) through (g)) below, waiver by
Lessor of each of the following conditions precedent, except as otherwise agreed
between Lessor and Lessee:

 

  (a) Funding of Escrow Account. Lessor shall have funded, or shall have caused
to be funded, the Escrow Account with funds in the amount of TWO MILLION, FIVE
HUNDRED THIRTY SEVEN THOUSAND, TWO HUNDRED AND NINE DOLLARS ($2,537,209.00) on
terms satisfactory to Lessee, to hold the purchase price for the Additional
Equipment and Buyer-Purchased Equipment in escrow pending application to fund
the acquisition of the Additional Equipment and Buyer-Purchased Equipment.

 

  (b) Certain Documents. Lessor shall have received each of the following, each
dated as of the date hereof unless otherwise indicated or agreed to by Lessor,
in form and substance reasonably satisfactory to Lessor:

 

  (i) this Agreement, duly executed and delivered by Lessee;

 

  (ii) an opinion of in-house counsel to Lessee, in form and substance
reasonably satisfactory to the Lessor;

 

  (iii) a “long form” good standing certificate for Lessee of a recent date
provided by the Secretary of State of Delaware;

 

  (iv) a certificate of the Secretary or an Assistant Secretary of Lessee
certifying (A) the names and true signatures of each officer of Lessee that has
been authorized to execute and deliver this Agreement or other document required
hereunder to be executed and delivered by or on behalf of Lessee, (B) a copy of
the certificate of incorporation of Lessee (and all amendments thereto) as in
effect on the date of such certification; (C) the by-laws (or equivalent organic
or organizational document) of Lessee as in effect on the date of such
certification, and (D) the resolutions of Lessee’s board of directors approving
and authorizing the execution, delivery and performance of this Agreement; and

 

  (v) (a) a waiver from Bridge Bank, waiving any Lien in respect of the
Equipment and the Escrow Account in form and substance satisfactory to Lessor,
duly executed and delivered to Lessor and there shall have been filed an
appropriate UCC statement to release any Lien in favor of Bridge Bank and
(b) the Agreement in Support of Development Program between Lessee and General
Motors Holdings LLC dated as February 11, 2011, as amended (the “GM Agreement”),
has terminated as to the Hydrogen Program (as defined in the GM Agreement),
except for those provisions that expressly survive termination, and there shall
have been filed by General Motors Holdings LLC appropriate UCC statements to
release any Lien in favor of General Motors Holdings LLC.

 

15

--------------------------------------------------------------------------------

  (c) Representations and Warranties. The representations and warranties set
forth in clause 7 shall be true and correct in all material respects on and as
of the date hereof with the same effect as though made on and as of such date,
except (i) to the extent that such representations and warranties expressly
relate to an earlier date, in which case such representations and warranties are
true and correct in all material respects as of such earlier date and (ii) any
representation and warranty that itself is qualified as to “materiality” or
“Material Adverse Effect” shall be true and correct in all respects.

 

  (d) No Legal Impediments. Neither entry into this Agreement nor the leasing of
the Equipment on the terms and conditions of this Agreement (x) violate any
Requirement of Law or (y) are enjoined, temporarily, preliminarily or
permanently by any Governmental Authority.

 

  (e) Deposit. The deposit required under the Indicative Term Sheet shall have
been paid by Lessee to Lessor.

 

  (f) No Event of Default. No Event of Default or potential Event of Default
shall have occurred and be continuing.

 

  (g) No Material Adverse Change. There shall have been no material adverse
change in the business, assets, properties, liabilities (actual or contingent),
operations, condition (financial or otherwise) or prospects, of the Lessee,
individually, or of the Lessee and its Subsidiaries taken as a whole (a
“Material Adverse Change”).

 

10. Equipment Security Interest Grant; Change in Tax Law; Pledge of Equipment
and Accounts

 

  10.1.

Lessee and Lessor acknowledge and agree that Lessee will not own or have any
equity in any of the Equipment under any circumstances whatsoever, and Lessee
will keep and treat the Equipment as removable personal property notwithstanding
it being attached to real property or any fixture. Lessee hereby

 

16

--------------------------------------------------------------------------------

  grants Lessor a valid, first priority Lien and security interest in (whether
now owned or at any time hereafter acquired by Lessee or in which Lessee now has
or at any time in the future may acquire) any right, title or interests of
Lessee in and to (i) the Equipment; (ii) the Escrow Account; (iii) procedural
and operating manuals or materials, warranties and instructions related to the
Equipment; and (iv) all products and proceeds of the foregoing (the “Specified
Assets”), as security for the payment and performance in full of all of Lessee’s
obligations under the Operative Documents (including, without limitation, any
Consideration, Lease Rent, fees, late charges and interest payable hereunder
after the filing of a petition under the Bankruptcy Code, whether or not such
Consideration, Lease Rent, fees, late charges and interest are allowed in the
bankruptcy proceeding (collectively, “Post-Petition Amounts”)). Such Lien shall
remain in full force and effect until, and shall terminate upon, indefeasible
payment and performance in full of all of such obligations (including, without
limitation, any Post-Petition Amounts). Lessee agrees to promptly execute and
deliver, and hereby authorizes Lessor to file without Lessee’s signature (to the
extent permitted by applicable law), all further instruments and documents as
Lessor may reasonably request, in order to perfect, preserve and protect the
Lien granted hereby or to enable Lessor to exercise and enforce its rights and
remedies hereunder with respect to such Lien, including financing or
continuation statements, clarifications or amendments thereto. If any Default by
Lessee of its obligations under this Agreement shall have occurred and be
continuing, Lessor may exercise in respect of such Lien, in addition to other
rights and remedies provided for herein or otherwise available to it, all the
rights and remedies of a secured party under the Bankruptcy Code or under the
Uniform Commercial Code, as enacted in the State of New York (the “UCC”),
including, without limitation, exercising its control over any “account” (as
such term is defined in the UCC), and without notice except as specified below
or, if notice cannot be waived under the UCC, as required to be provided by the
UCC, sell the collateral that is the subject of the Lien or any part thereof in
one or more parcels at public or private sale, at any of Lessor’s offices or
elsewhere, for cash, on credit or for future delivery, and upon such other terms
as Lessor may deem commercially reasonable.

 

  10.2. Lessor and Lessee agree that for the duration of this Agreement, if
after the date hereof a change in tax law occurs adversely affecting the tax
treatment of the lease transactions contained herein, Lessor and Lessee agree
that they shall cooperate in optimizing the structure of this Agreement to
minimize taxes payable by Lessor and Lessee as permissible by applicable law to
the mutual benefit of Lessor and Lessee, including such changes or permissible
restructurings as may be beneficial to Lessor and Lessee in execution of their
Tax Obligations hereunder and excluding changes that would be prejudicial to
either Lessor or Lessee.

 

  10.3. Lessor and Lessee agree that Lessor shall have the right to pledge as
collateral, create a Lien upon, and otherwise create a security interest with
respect to the Equipment, the Accounts and the proceeds therefrom to one or more
third parties from time to time, in each case without notice to, or permission
from, the Lessee.

 

17

--------------------------------------------------------------------------------

11. Force Majeure

If the performance of any obligation under this Agreement is prevented by an
event beyond the control and without the fault or negligence of the Party
affected thereby including acts of God; acts, laws, orders or regulations or any
government or department or agency thereof; wars or other civil or military
disturbances, such Party will be excused from such performance to the extent of
the duration of such interference or the direct effects thereof; provided,
however, that the duration of any such period in which such Party will be
excused from performance will not exceed one (1) month and provided further that
Lessee shall continue to pay the Lease Rent on Equipment previously delivered by
Lessor to Lessee. If this period of one month is exceeded, then Lessor and
Lessee will meet in order to decide whether and under what condition this
Agreement can be performed.

 

12. Indemnities

Lessee shall upon notice by Lessor indemnify in full and hold harmless, Lessor,
its officers, employees, agents, advisors, consultants and legal counsel and
Lessor’s successors and assigns, (each an “Indemnified Person”) from and against
any and all claims (whether or not successful, compromised or settled), actions,
liabilities, demands, proceedings or judgments which may be instituted, made,
threatened, alleged, asserted or established (each a “Claim”) in any
jurisdiction against or otherwise involving an Indemnified Person and from all
losses, costs, damages, charges or out-of-pocket expenses (including reasonable
and documented fees and expenses of outside counsel; provided that all
documentation shall be subject to redaction for privilege, confidentiality and
similar purposes) (each an “Expense”) which an Indemnified Person suffers or
incurs from time to time (including all Expenses reasonably incurred in
disputing any Claim and/or in establishing a right to be indemnified pursuant to
this clause 12 and/or in seeking advice regarding any Claim or in any way
related to or in connection with this indemnity), in any such case arising out
of Lessee’s performance herewith or under any Operative Document, including,
without limitation, the purchase, ownership, delivery, lease, possession,
maintenance, condition, operation or other use or return of the Equipment, the
operation of Lessee’s business, or any Tax Obligations; provided that Lessee
shall not be required to indemnify any Indemnified Person pursuant to this
clause 14 if, but only to the extent that, it is determined by final order of a
court of competent jurisdiction that such Claims and Expenses were the result of
such Indemnified Person’s breach of this Agreement, gross negligence or willful
misconduct. For the sake of clarity and except as otherwise expressly stated
herein, it is the intention of Lessee under this clause 12 to indemnify the
Indemnified Persons from all Claims brought by Lessee, any successor in interest
of Lessee or any Person, whether acting on its own behalf or acting on behalf of
Lessee, or asserting a Claim through Lessee against an Indemnified Person and
all Expenses related thereto.

Unless otherwise agreed, Lessee will be the party directly responsible for
calculating, filing and/or otherwise reporting, and paying any and all Tax
Obligations indemnified under this clause 12 (but only to the extent such
indemnified Tax Obligations are or should with reasonable care be known to
Lessee or with respect to which Lessor has

 

18

--------------------------------------------------------------------------------

notified Lessee in writing) in a timely manner that is compliant with all
applicable tax laws and rules including but not limited to any and all tax or
tax related returns, reports, self assessments, renditions or other documents
required or associated with any taxes that may be due pursuant to this Agreement
and any Lease, any transactions and/or any payments associated with or
contemplated hereby. For the avoidance of doubt, nothing in this paragraph shall
affect Lessee’s obligation to indemnify Lessor pursuant to the first paragraph
of this clause 12.

Lessee shall provide any exemption certificate or other documentation necessary
to demonstrate that no tax is due or that said tax has been paid to the Lessor’s
notice address set forth in clause 19 within fifteen (15) days of receiving a
request from Lessor for same.

Lessor is a “United States person” (as defined in Section 7701(2)(30) of the
Internal Revenue Code) and it shall deliver to Lessee two original copies of
Internal Revenue Service Form W-9 properly completed and duly executed by such
Lessor, certifying that such Lessor is not subject to U.S. back-up withholding
pursuant to Section 3406 of the Internal Revenue Code and providing such other
information as is required by such Form W-9.

 

13. Limitation of Liability

In no event shall Lessor be responsible or liable to Lessee for any damages of
any nature whatsoever (including, without limitation, any special, indirect,
incidental, punitive, exemplary or consequential damages or any damages incurred
as a result of loss of use, loss of profits or revenue, interest charges or cost
of capital), whether such claim is based in contract, warranty, negligence or
strict liability, arising out of, based upon or in connection with, whether
directly or indirectly (a) the operation of Lessee’s business including the
operation or any other use of any Equipment or (b) any actions taken in respect
of the Equipment; provided that the limitation of liability in this clause shall
not apply if it is determined by final order of a court of competent
jurisdiction or a Tribunal that Lessee’s damages were the result of Lessor’s
breach of this Agreement, gross negligence or willful misconduct.

 

14. Further Assurances

Lessee shall promptly and duly execute and deliver to Lessor such further
documents and assurances and take such further action as may from time to time
be reasonably requested in order to more effectively carry out the intent and
purposes of this Agreement.

 

15. Entire Agreement

This Agreement embodies the entire agreement and understanding of Lessor and
Lessee with respect to the subject matter hereof and supersedes all prior or
contemporaneous agreements and understandings of Lessor or Lessee, verbal or
written, relating to the subject matter hereof.

 

19

--------------------------------------------------------------------------------

16. Amendments

This Agreement may be amended only in writing, signed by each Party.

 

17. Notices; Lessee Agent for Service of Process

All notices hereunder shall be in writing and deemed given when received (by
mail or facsimile) at the respective Parties’ address set forth below:

To Lessor:

Amur Finance I LLC.

50 Main Street, Suite 1265

White Plains, NY 10606

Telephone: (212) 893-8836

Facsimile: (212) 893-8837

Attention: Alison A. Mason, Managing Director With a copy to:

Hughes Hubbard & Reed LLP

One Battery Park Plaza

New York, New York 10004

Attention: Andrew F. Fowler

Telephone: (212) 837-6738

Facsimile: (212) 299-6855

To Lessee:

Quantum Fuel Systems Technologies Worldwide, Inc.

25242 Arctic Ocean Drive, Lake Forest, CA 92630

Telephone: (949) 930-3400

Fax: (949) 399-4567

Attention: Brad Timon

With a copy to:

Kenneth Lombardo, General Counsel

19500 Hall Road, Suite 102, Clinton Township, MI 48038

Telephone: (586) 948-9534

Facsimile: (586) 948-9537

Each Party’s designated address may be changed by written notice to the other
Party which shall be effective upon receipt.

The agent for service of process of Lessee shall be:

Quantum Fuel Systems Technologies Worldwide, Inc.

25242 Arctic Ocean Drive, Lake Forest, CA 92630

Telephone: (949) 930-3400

Facsimile: (949) 399-4567

Attention: W. Brian Olson

 

20

--------------------------------------------------------------------------------

18. Assignment and Transfer

Without Lessor’s prior written consent, Lessee may not assign, transfer or
dispose of any of its rights or delegate its obligations in any way under this
Agreement or any Lease. Any transfer of or lease, financing, security or other
agreement in relation to any Equipment which is not explicitly permitted under
the terms of this Agreement shall be deemed void ab initio and of no force and
effect.

 

19. Jurisdiction

 

  (a) Each of the parties hereto agrees that the United States federal and New
York State courts located in The City of New York shall have jurisdiction to
hear and determine any suit, action or proceeding, and to settle any disputes,
which may arise out of or in connection with this Agreement and, for such
purposes, submits to the jurisdiction of such courts. Each of the parties hereto
waives any objection which it might now or hereafter have to the United States
federal or New York State courts located in The City of New York being nominated
as the forum to hear and determine any suit, action or proceeding, and to settle
any disputes, which may arise out of or in connection with this Agreement and
agrees not to claim that any such court is not a convenient or appropriate
forum. Each of the parties hereto agrees that the process by which any suit,
action or proceeding is begun may be served on it by being delivered in
connection with any suit, action or proceeding in The City of New York to the
Person named as the process agent of such party herein at the address set out
herein or at the principal New York City office of such process agent, if not
the same.

 

  (b) The submission to the jurisdiction of the courts referred to in
Section 19(a) shall not (and shall not be construed so as to) limit the right of
the Lessor to take proceedings against Lessee in any other court of competent
jurisdiction nor shall the taking of proceedings in any one or more
jurisdictions preclude the taking of proceedings in any other jurisdiction,
whether concurrently or not.

 

  (c) Each of the parties hereto hereby consents generally in respect of any
legal action or proceeding arising out of or in connection with this Indenture
to the giving of any relief or the issue of any process in connection with such
action or proceeding, including the making, enforcement or execution against any
property whatsoever (irrespective of its use or intended use) of any order or
judgment which may be made or given in such action or proceeding.

 

21

--------------------------------------------------------------------------------

20. Expenses

Upon the occurrence and continuance of a Default, Lessee will pay to Lessor
promptly following demand all reasonable and documented expenses (including
reasonable and documented fees and expenses of attorneys, financial advisors,
auditors, appraisers and inspectors; provided that all documentation shall be
subject to redaction for privilege, confidentiality and similar purposes)
related to (a) maintenance and the enforcement of the rights of the Lessor
hereunder, including without limitation the security interest and Lien in favor
of Lessor, and/or (b) any amendment to or extension of any other documentation
in connection with, or the granting of any waiver or consent under or pursuant
to this Agreement.

 

21. Governing Law

This Agreement shall be governed by, and construed in accordance with, the laws
of the State of New York.

 

22. Confidentiality; Mutual Non-Disclosure Agreement

The confidential information to be disclosed under this Agreement (“Confidential
Information”) includes: Technical and business information relating to
proprietary ideas, patentable ideas and/or trade secrets, all information
existing and/or contemplated products and services, research and development,
production, costs, profit and margin information, finances and financial
projections, customers, clients, marketing, and current or future business plans
and models, and all other information disclosed by one party hereunder to the
other in connection with the negotiation or performance of this Agreement
(including without limitation information concerning the Equipment), regardless
of whether such information is designated as “Confidential Information” at the
time of its disclosure.

In addition to the above, Confidential Information shall also include, and the
parties shall have a duty to protect, other confidential and/or sensitive
information which is (a) disclosed as such in writing and marked as confidential
(or with other similar designation) at the time of disclosure; and/or
(b) disclosed by in any other manner and identified as confidential at the time
of disclosure.

Each party shall limit disclosure of Confidential Information within its own
organization to its directors, officers, partners, members and/or employees
having a need to know and shall not disclose Confidential Information to any
third party other than its attorneys, accountants or other professional advisers
(whether an individual, corporation, or other entity) without prior written
consent unless disclosure is required pursuant to a court order or statutory
duty (including under any applicable law, or as ordered by a court, stock
exchange, regulation or regulator), in which case the last paragraph of this
clause 22 will apply. Each party shall satisfy its obligations under this
paragraph if it takes affirmative measures to ensure compliance with these
confidentiality obligations by its employees, agents, consultants and others who
are permitted access to or use of the Confidential Information.

 

22

--------------------------------------------------------------------------------

This clause imposes no obligation upon the parties with respect to any
Confidential Information (a) that was possessed by the receiving party before
receipt from the other party; (b) is or becomes a matter of public knowledge
through no fault of receiving party; (c) is rightfully received from a third
party not owing a duty of confidentiality; (d) is disclosed without a written
duty of confidentiality to a third party by, or with the authorization of the
disclosing party; or (e) is independently developed without the use or
incorporation of Confidential Information.

In case Confidential Information is required to be disclosed by a party by
virtue of a court order or statutory duty, the party shall be allowed to do so,
provided that it shall, without delay, inform the other party in writing of
receipt of such order or coming into existence of such duty and enable the other
party reasonably to seek protection against such order or duty. Notwithstanding
such permitted disclosure, the Confidential Information required to be disclosed
shall remain Confidential Information.

Lessor acknowledges that Lessee is a publicly traded company and that the
Confidential Information that will be furnished to it hereunder may include
material, non-public information of the Lessee. Lessor further acknowledges and
agrees that (i) trading in the Lessee’s securities while in possession of such
material, non-public information is a violation of both federal and state
securities laws, (ii) Lessee has not promised or agreed to publicly disclosure
such material, nonpublic information (other than public disclosure of the
transactions contemplated by this Agreement to the extent required by the rules
and regulations of the U.S. Securities and Exchange Commission or The Nasdaq
Stock Market) and (iii) the Lessor’s ability to trade in the Lessee’s securities
may be restricted for an indefinite period of time. Lessor covenants that
neither it nor any party acting on its behalf or pursuant to any understanding
with it will engage in any trading in the securities of the Lessee (including
Short Sales) while in possession of any material, nonpublic information
pertaining to the Lessee. For purposes hereof, “Short Sales” means all “short
sales” as defined in Rule 200 promulgated under Regulation SHO under the
Securities Exchange Act of 1934, as amended, and all types of direct and
indirect stock pledges, forward sale contracts, options, puts, calls, swaps and
similar arrangements (including on a total return basis), and sales and other
transactions through non-US broker dealers or foreign regulated brokers. Lessor
shall refrain from communicating any such material, non-public information to
any other person under circumstances in which it is reasonably foreseeable that
such person is likely to purchase or sell securities of the Lessee in reliance
upon such information.

 

23. Counterparts

This Agreement may be executed by one or more of the parties to this Agreement
on any number of separate counterparts (including by facsimile or other
electronic transmission), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with Lessee and Lessor.

 

23

--------------------------------------------------------------------------------

24. Survival after Termination Date

Upon the payment in full, in cash of all obligations under this Agreement and
the Leases and the irrevocable termination of all of Lessor’s obligations
hereunder and under any Lease, the following clauses of this Agreement shall
survive: 7.3, 8.2(b)(II), 12, 13, 20, and 22.

[SIGNATURES FOLLOW]

 

24

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by their duly authorized representative as of the date first above written.

 

AMUR FINANCE I LLC as Lessor By:  

/s/ Alison Mason

Name:   Alison Mason Position:   Managing Director

QUANTUM FUEL SYSTEMS TECHNOLOGIES WORLDWIDE, INC.

as Lessee

By:  

/s/ Brad Timon

Name:   Brad Timon Position:   CFO

 

25

--------------------------------------------------------------------------------

Schedule 1

Definitions

“Additional Equipment” has the meaning set forth in the recitals to this
Agreement.

“Additional Sold Equipment Purchase Price” has the meaning given to that term in
the Sale and Purchase Agreement.

“Affiliate” means as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, “control” of a Person means the
power, directly or indirectly, either to (a) vote 10% or more of the securities
having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.

“After-Tax Basis” means, with respect to any amount actually or constructively
payable to any Person under the Operative Documents (a “pre-tax payment”), an
amount which, after taking into account all taxes required to be paid by the
Person entitled to such pre-tax payment as the result of the receipt or accrual
of that payment (computed on the basis of the statutory rates of tax applicable
to such Person at the relevant time, and taking into account all tax benefits or
savings then available to such Person as a result of such payment, whether or
not such Person actually claims any such items) shall be equal to the full
amount of the pre-tax payment.

“Bankruptcy Code” means Title 11 of the United States Code.

“Business” has the meaning set forth in clause 7.2(r)(ii).

“Business Day” means a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close.

“Buyer-Purchased Equipment” has the meaning given to that term in the Sale and
Purchase Agreement.

“Buyer-Purchased Equipment Purchase Price” has the meaning given to that term in
the Sale and Purchase Agreement.

“Claim” has the meaning set forth in clause 12.

“Closing Date” has the meaning set forth in the introductory paragraph to this
Agreement.

“Collection Account” has the meaning set forth in clause 3.1.

“Consideration” has the meaning set forth in clause 5.2.

“Default” means any event or circumstance specified in clause 6.

“Early Termination” has the meaning set forth in clause 5.3.

“Early Termination Date” has the meaning set forth in clause 5.3.

“Environmental Laws” means any and all foreign, federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.

--------------------------------------------------------------------------------

“Equipment” has the meaning set forth in the recitals to this Agreement.

“Equipment Information” has the meaning set forth in clause 8.2(b).

“Escrow Account” means the escrow account (account number                     )
established to hold the purchase price for the Additional Equipment and
Buyer-Purchased Equipment in escrow pending application to fund the acquisition
of the Additional Equipment.

“Excluded Taxes” means taxes which are on or measured by the net income of
Lessor (except with respect to any indemnification or reimbursement obligation
of Lessee hereunder which is expressly stated to be on an After-Tax Basis).

“Expense” has the meaning set forth in clause 12.

“Facilities” means Lessee’s three buildings located at 25242 Arctic Ocean Drive,
Lake Forest, CA 92630, each individually a “Facility.”

“GAAP” means generally accepted accounting principles in the United States as in
effect from time to time. In the event that any “Accounting Change” (as defined
below) shall occur and such change results in a change in the method of
calculation of financial covenants or otherwise impacts compliance with any
provision of this Agreement or any Lease, then, if requested in writing by
Lessee to Lessor, Lessee and Lessor agree to enter into negotiations in order to
amend such provisions of this Agreement so as to reflect equitably such
Accounting Changes with the desired result that the criteria for evaluating
Lessee’s and its Subsidiaries’ financial condition shall be the same after such
Accounting Changes as if such Accounting Changes had not been made. Until such
time as such an amendment shall have been executed and delivered by Lessor and
Lessee, all financial covenants, standards and terms in this Agreement shall
continue to be calculated or construed as if such Accounting Changes had not
occurred. “Accounting Changes” refers to changes in accounting principles
required by the promulgation of any rule, regulation, pronouncement or opinion
by the Financial Accounting Standards Board of the American Institute of
Certified Public Accountants or, if applicable, the Securities and Exchange
Commission.

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).

“Indemnified Person” has the meaning set forth in clause 12.

“Insurance Agreements” means any insurance policy or policies in respect of the
Equipment as required by clause 8.2(e).

“Late Charge Rate” means 500 basis points per annum payable monthly.

“Lease Agreement” means this Agreement.

 

2

--------------------------------------------------------------------------------

“Lease Expiration Date” means the third anniversary of the Closing Date.

“Lease Period” means the meaning set forth in clause 2.1.

“Lease Rent” has the meaning set forth in clause 3.1.

“Lessee” has the meaning set forth in the introductory paragraph to this
Agreement.

“Lessor” has the meaning set forth in the introductory paragraph to this
Agreement.

“Lien” means any mortgage, pledge, hypothecation, right of others, claim,
security interest, encumbrance, adverse claim or interest, easement, covenant,
encroachment, servitude, option, lien, put or call right, right of first
refusal, voting right, charge or other restrictions or limitations of any nature
whatsoever.

“Location” means the Facilities where Lessor delivers or is deemed to have
delivered the Equipment to Lessee.

“Material Adverse Change” has the meaning set forth in clause 9(g).

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets (actual or contingent), properties, operations, liabilities, condition
(financial or otherwise) or prospects of Lessee individually, or the Lessee and
its Subsidiaries taken as a whole; (b) the ability of the Lessee to perform its
obligations to perform its obligations under this Agreement or any related
document to which it is a party, or (c) the validity or enforceability of this
Agreement or any related agreement or the rights or remedies of Lessor hereunder
or thereunder.

“Materials of Environmental Concern” mean any gasoline or petroleum (including
crude oil or any fraction thereof) or petroleum products or any hazardous or
toxic substances, materials or wastes, defined or regulated as such in or under
any Environmental Law, including asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.

“Operative Documents” means, collectively, this Agreement, the Sale and Purchase
Agreement and the Insurance Agreements.

“Parties” means, collectively, Lessor and Lessee (each individually, a “Party”).

“Payment Date” means, with respect to the Lease, the (x) fifteenth
(15th) calendar day of each month and (y) the Termination Date of such Lease;
provided that if any Payment Date is not a Business Day, the Payment Date shall
be deemed to be the Business Day immediately following such date.

“Person” means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.

“Post-Petition Amounts” has the meaning set forth in clause 10.1.

“Prepayment Termination Date” has the meaning set forth in clause 5.4.

“Properties” has the meaning set forth in clause 7.2(r)(i).

 

3

--------------------------------------------------------------------------------

“Purchase Price” means the aggregate amount of the Sold Equipment Purchase
Price, the Additional Sold Equipment Purchase Price and the Buyer-Purchased
Equipment Purchase Price.

“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents, trustees and advisors
of such Person and of such Person’s Affiliates.

“Requirement of Law”: as to any Person, the certificate of incorporation and
by-laws or other organizational or governing documents of such Person, and any
law, treaty, rule or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.

“Responsible Officer” means the chief executive officer, president, vice
president, chief financial officer or treasurer, but in any event, with respect
to financial matters, the chief financial officer or treasurer.

“Sale and Purchase Agreement” has the meaning set forth in the recitals to this
Agreement.

“Sold Equipment” has the meaning set forth in the recitals to this Agreement.

“Sold Equipment Purchase Price” has the meaning given to that term in the Sale
and Purchase Agreement.

“Specified Assets” has the meaning set forth in clause 10.1.

“Subsidiary” means as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person.

“Tax Obligations” means any present or future tax (including, without
limitation, any ad valorem, property, occupation, severance, first use,
conservation, gross receipts, privilege, sales, use, consumption, excise, lease,
transaction, value added or other tax imposed by any Government, Federal, State
and/or Local taxing jurisdictions), levy, license, impost, permit, duty, charge,
assessment or fee or increases/amendments thereto of any nature that may be
imposed by any government or other taxing authority in respect of any payment or
transaction contemplated by or undertaken pursuant to this Agreement or other
documents associated herewith including any associated penalties, fines or
interest, excluding, however, any Excluded Taxes.

“Termination Date” has the meaning set forth in clause 5.1.

“UCC” has the meaning set forth in clause 10.1

 

4

--------------------------------------------------------------------------------

Schedule 2

 

1. Machinery & Equipment

 

2. Tooling and dies

 

3. Computer Equipment and components

 

4. Auto

 

5

--------------------------------------------------------------------------------

Schedule 3

Form of Certificate of Delivery and Acceptance

DATE: [                    ]

Pursuant to the Lease Agreement (the “Lease”), dated as of November 6, 2012
between AMUR FINANCE I LLC, as lessor (“Lessor”), a Delaware limited liability
company and QUANTUM FUEL SYSTEMS TECHNOLOGIES WORLDWIDE, INC., as lessee
(“Lessee”), a Delaware corporation, and on the basis of the confirmation given
by the Lessee in this Certificate, the item of Equipment identified below was
delivered by the Lessor to the Lessee, and accepted by the Lessee from the
Lessor, on [DATE] at [LOCATION] under, and in accordance with the terms and
conditions of, the Lease.

[INSERT DETAILED DESCRIPTION OF EQUIPMENT, INCLUDING SERIAL NUMBER OR OTHER
IDENTIFYING INFORMATION]

The Lessee confirms that as at the date of this Certificate:

(a) No Default under the Lease has occurred and is continuing; and

(b) the representations and warranties set out in Section 7 of the Lease are
true and correct as if each were made with reference to the facts and
circumstances existing at the date of this certificate,

QUANTUM FUEL SYSTEMS TECHNOLOGIES WORLDWIDE, INC.

 

By:  

 

  Name:   Title:

 

6

--------------------------------------------------------------------------------

Schedule 4

List of Sold Equipment, Additional Sold Equipment and Buyer-Purchased Equipment

 

  1. Items described on Schedule 2.

 

7