Quantum Solar Power Corp.: Exhibit 10.5 - Filed by newsfilecorp.com





GUARANTEE 

                         GUARANTEE
dated May 8, 2012 made by QUANTUM SOLAR POWER CORP., (the
“Guarantor”) a corporation duly incorporated under the laws of the State
of Nevada with an address at 1055 W. Hastings, Ste. 300, Vancouver, British
Columbia V6E 2E9, in favour of SIMON FRASER UNIVERSITY (the
“Guaranteed Party”), a corporation continued under the University Act of
British Columbia having an address at 8888 University Drive, Multi-Tenant
Facility, Burnaby, British Columbia, Canada V5A 1S6. 

                         WHEREAS
Canadian Integrated Optics, BC Ltd. (the “Debtor”) is indebted to the
Guaranteed Party pursuant to and in accordance with the terms and conditions of
a promissory note dated May 8, 2012 between the Debtor and the Guaranteed Party
(the “Promissory Note”) which was entered into pursuant to Amendment No.
6 (the “Amendment”) dated as of April 15, 2012 to the Research Agreement
(the “Research Agreement”) dated as of April 1, 2010 between the Debtor
and the Guaranteed Party; 

                         WHEREAS
the Guaranteed Party requires, as a condition precedent to entering into the
Amendment and to the revocation of its notice of termination (the
“Termination Notice”) of the Research Agreement, that the Guarantor
execute and deliver this guarantee of the obligations of the Debtor to the
Guaranteed Party; 

                         AND
WHEREAS the Guarantor has business dealings with the Debtor and the
Guarantor will benefit from the Amendment and the revocation of the Termination
Notice. 

                         NOW
THEREFORE, in consideration of the foregoing premises, the agreement of the
Guaranteed Party to enter into the Amendment and revoke the Notice of
Termination, the sum of $10.00 in lawful money of Canada now paid by the
Guaranteed Party to the Debtor and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Guarantor hereby
agrees as follows: 

                         Section
1      Interpretation. (1)
Terms defined in the Promissory Note and not otherwise defined in this guarantee
shall have the same meanings herein, unless there is something in the subject
matter or context inconsistent therewith.

                         (2)      In
this guarantee, unless there is something in the subject matter or context
inconsistent therewith, the terms defined in the introductory paragraph and the
recitals to this guarantee shall have such meanings herein and the following
terms shall have the following meanings: 

“Business Day” means a day
(other than a Saturday or Sunday) on which banks are open for business in
Vancouver; 

“Guaranteed Obligations” has
the meaning set forth in section 2; 

“Taxes” means all taxes,
levies, imposts, stamp taxes, duties, fees, deductions, withholdings, charges,
compulsory loans or restrictions or conditions resulting in a charge which are
imposed, levied, collected, withheld or assessed by any country or
political subdivision or taxing authority thereof as of the date hereof or at
any time in the future together with interest thereon and penalties with respect
thereto, if any, and any payments of principal, interest, charges, fees or other
amounts made on or in respect thereof (but excluding any taxes, franchise taxes,
levies, imposts or charge imposed, levied or assessed in respect of or applied
on the overall net income of the Guaranteed Party, net earnings of the
Guaranteed Party, net profits of the Guaranteed Party or capital or place of
business of the Guaranteed Party or on goods and services purchased by the
Guaranteed Party and any penalties and payments of principal, interest, charges,
fees or other amounts made on or in respect thereof), and “Tax” and
“Taxation” shall be construed accordingly. 




- 2 - 

                         (3)      As
used herein, each gender shall include all genders, and the singular shall
include the plural and the plural the singular, as the context shall require.


                         (4)      In
this guarantee: 

	 	(a) 	
      reference to any body corporate or partnership shall
      include successors thereto, whether by way of amalgamation or
      otherwise;

	 	 	 
	 	(b) 	
      reference to any statute, enactment or legislation or to
      any section or provision thereof shall include a reference to any order,
      ordinance, regulation, rule or by-law or proclamation made under or
      pursuant to that statute, enactment or legislation and all amendments,
      modifications, consolidations, re-enactments or replacements thereof or
      substitutions therefor from time to time; and

	 	 	 
	 	(c) 	
      reference to any agreement (including without limitation
      any definitions in or portions of any agreement incorporated herein by
      reference), instrument, Permit or other document shall include reference
      to such agreement, instrument, Permit or other document as the same may
      from time to time be amended, supplemented, replaced or
  restated.



                         (5)     
The division of this guarantee into sections and the insertion of headings are
for convenience of reference only and shall not affect the construction or
interpretation hereof. 

                         Section
2      Guarantee. The
Guarantor hereby irrevocably and unconditionally guarantees the due and punctual
payment to the Guaranteed Party, whether at final maturity, by demand or
acceleration or otherwise, and performance of all obligations of Debtor under
the Promissory Note and any and all out-of-pocket expenses (including counsel
fees and disbursements on a solicitor and his or her own client basis) incurred
by the Guaranteed Party in enforcing any of its respective rights under this
guarantee (such obligations collectively being herein called the “Guaranteed
Obligations”). This guarantee is provided on a joint and several basis with
any other guarantee of the Guaranteed Obligations, by whomsoever and howsoever
granted. 




- 3 - 

                         Section
3      Absolute Liability.
The Guarantor guarantees that the Guaranteed Obligations will be paid and
performed strictly in accordance with the terms of the Promissory Note. The
liability of the Guarantor under this guarantee shall be absolute and
unconditional irrespective of: 

	 	(a) 	
      the lack of validity or enforceability of any terms of
      the Promissory Note;

	 	 	 
	 	(b) 	
      any contest by the Debtor, its subsidiaries or any other
      person as to the validity or enforceability of any terms of the Promissory
      Note or the priority of any security granted to the Guaranteed Party by
      the Debtor, its subsidiaries or any other person pursuant to the terms of
      the Promissory Note or otherwise;

	 	 	 
	 	(c) 	
      any defence, counter-claim or right of set-off available
      to the Debtor or its subsidiaries;

	 	 	 
	 	(d) 	
      any extension of the time or times for payment of the
      Guaranteed Obligations or any other amendments, waivers or indulgences the
      Guaranteed Party may grant to the Debtor or its subsidiaries;

	 	 	 
	 	(e) 	
      any dealings with the security which the Guaranteed Party
      holds or may hold pursuant to the terms and conditions of the Promissory
      Note or otherwise, including the taking and giving up of securities, the
      accepting of compositions and the granting of releases and
    discharges;

	 	 	 
	 	(f) 	
      the assignment of all or any part of the benefits of this
      guarantee;

	 	 	 
	 	(g) 	
      any other circumstances which might otherwise constitute
      a defence available to or a discharge of the Guarantor, the Debtor, its
      subsidiaries or any other person in respect of the Guaranteed Obligations,
      or the Guarantor in respect of this guarantee.



                         Section
4      Remedies. The
Guarantor agrees that the Guaranteed Party shall not be bound to seek or exhaust
its recourses against the Debtor, its subsidiaries or any other person or to
realize on any security held in respect of the Guaranteed Obligations before
being entitled to payment hereunder. Should the Guaranteed Party elect to
realize on any security it may hold, either before, concurrently with or after
demand for payment under this guarantee, the Guarantor shall have no right of
discussion or division. 

                         Section
5      Impairment of Security.
Any loss or impairment of any security received by the Guaranteed Party
from the Debtor, its subsidiaries or any other person pursuant to the provisions
of the Promissory Note or otherwise shall not discharge pro tanto or limit or
lessen the liability of the Guarantor under this guarantee. 

                         Section
6      No Prejudice to the Guaranteed
Party. The Guaranteed Party shall not be prejudiced in any way in the
right to enforce any provision of this guarantee by any act or failure to act on
the part of the Debtor or its subsidiaries. The Guaranteed Party may, at any
time and from time to time, without any consent of or notice to the Guarantor
and without impairing or releasing the Guarantor from its obligations hereunder
(i) change the manner, place or terms of payment or change or extend time of payment of, or
renew or alter, the Guaranteed Obligations, (ii) release anyone liable in any
manner under or in respect of the Guaranteed Obligations, (iii) exercise or
refrain from exercising any rights against the Debtor, its subsidiaries or the
Guarantor or any other person, and (iv) apply any sums from time to time
received on account of the Guaranteed Obligations. 




- 4 - 

                         Section
7      Payment on Demand. The
Guarantor shall make payment to the Guaranteed Party of the amount of the
Guaranteed Obligations forthwith after same shall have become due and payable
and demand therefor is made in writing to it. The indebtedness of the Guarantor
hereunder shall bear interest from the date of such demand to the date of
payment thereof in full at the rate or rates of interest applicable to the
Guaranteed Obligations under and calculated in the manner provided in the
Promissory Note in respect of overdue amounts. 

                         Section
8      Amount of Guaranteed
Obligations. Any account settled or stated by or between the Guaranteed
Party and the Debtor or its subsidiaries or, if any such account has not been so
settled or stated immediately before demand for payment under this guarantee,
any account thereafter stated by the Guaranteed Party shall, in the absence of
demonstrated error, be accepted by the Guarantor as conclusive evidence of the
amount of the Guaranteed Obligations which at the date of the account so settled
or stated is due by the Debtor or its subsidiaries to the Guaranteed Party or
remains unpaid by the Debtor or its subsidiaries to the Guaranteed Party. 

                         Section
9      Rights of
Set-Off. To the fullest extent permitted by Law, the Guarantor shall
make all payments hereunder without regard to any defence, counter-claim or
right of set-off available to it. 

                         Section
10      Subrogation and
Repayment. Upon receipt by the Guaranteed Party of any payments on
account of liability under this guarantee, whether by realization on security or
otherwise, the Guarantor shall not be entitled to claim repayment against the
Debtor or its subsidiaries for such payments until the Guaranteed Party’s claims
against the Debtor and its subsidiaries in respect of the Guaranteed Obligations
have been repaid in full. In the case of the liquidation, winding-up or
bankruptcy of the Debtor or its subsidiaries (whether voluntary or compulsory),
or in the event that the Debtor or its subsidiaries shall make a bulk sale of
any of the its assets within the provisions of any bulk sales legislation or any
composition with creditors or scheme of arrangement, the Guaranteed Party shall
have the right to rank in priority to the Guarantor for its full claims in
respect of the Guaranteed Obligations and receive all dividends or other
payments in respect thereof until its claims in respect of the Guaranteed
Obligations have been paid in full and the Guarantor shall continue to be
liable, less any payments made by or on behalf of the Guarantor, for any balance
which may be owing to the Guaranteed Party by the Debtor and its subsidiaries in
respect of the Guaranteed Obligations. In the event of the valuation by the
Guaranteed Party of any of its security or the retention thereof by the
Guaranteed Party, or both, such valuation or retention, or both, shall not, as
between the Guaranteed Party and the Guarantor, be considered as a purchase of
such security, or as payment or satisfaction or reduction of the Guaranteed
Obligations, or any part thereof. If any amount shall be paid to the Guarantor
on account of any subrogation rights at any time when all the Guaranteed
Obligations shall not have been paid in full, such amount shall be held in trust
for the benefit of the Guaranteed Party and shall forthwith be paid to the
Guaranteed Party to be credited and applied upon the Guaranteed Obligations,
whether matured or unmatured. 




- 5 - 

                         Section
11      No Recourse. Any
right of subrogation acquired by the Guarantor by reason of payment under or
pursuant to this guarantee shall not be exercised until the Guaranteed
Obligations have been paid or repaid in full to the Guaranteed Party and shall
be no greater than the right held by the Guaranteed Party, and the Guarantor
shall have no recourse against the Guaranteed Party for any invalidity,
non-perfection or unenforceability of any security held by the Guaranteed Party
or any irregularity or defect in the manner or procedure by which the Guaranteed
Party realizes on such security. 

                         Section
12      Continuing Guarantee.
This guarantee shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Guaranteed Party upon the insolvency,
bankruptcy or reorganization of the Debtor or its subsidiaries or otherwise, all
as though such payment had not been made.

                         Section
13      Representations.
There are no other representations, collateral agreements or conditions with
respect to this instrument or affecting the Guarantor’s liability hereunder
other than as contained or referred to herein or in the Promissory Note. 

                         Section
14      Supplemental Security.
This guarantee is in addition and without prejudice to and supplemental
to all other guarantees and securities held, or which may hereafter be held, by
the Guaranteed Party. 

                         Section
15      Judgment Currency.
If, for the purpose of obtaining or enforcing judgment in any court in any
jurisdiction, it become necessary to convert into the currency of the
jurisdiction giving such judgment (the “Judgment Currency”) an amount due
under this Guarantee in another currency (the “Original Currency”), then
the date on which the rate of exchange for conversion is selected by the court
is referred to herein as the “Conversion Date”. If there is a change in
the rate of exchange between the Judgement Currency and the Original Currency
between the Conversion Date and the actual receipt by the Guaranteed Party of
the amount due to it under this Guarantee or the judgment, the Guarantor will,
notwithstanding the judgment, pay all such additional amounts as may be
necessary to ensure that the amount received by the Guaranteed Party in the
Judgment Currency, when converted at the rate of exchange prevailing on the date
of receipt, will produce the amount due in the Original Currency. This
obligation is a separate and independent obligation of the Guarantor and will
not merge with any judgment or any partial payment or enforcement of payments
due under this Guarantee. 

                         Section
16      Interest Act (Canada).
For purposes of the Interest Act (Canada), the Guarantor hereby
acknowledges that the rate or rates of interest applicable to the Guaranteed
Obligations shall be computed and shall be paid at the times and in the manner
set forth in the Promissory Note. 

                         Section
17      Successors and Assigns.
This guarantee shall extend to and enure to the benefit of the
Guaranteed Party and its successors and permitted assigns and shall be binding
upon the Guarantor and its successors and permitted assigns. 

                         Section
18      Notices. Any and all
notices or other communications required or permitted pursuant to this guarantee
shall be in writing and shall be personally delivered by courier or telecopied
to the addressee at the address referred to in the first paragraph hereof, in
which case such notice or other communication shall conclusively be deemed to
have been given to the addressee thereof on the day upon which it was delivered
or received by telecopy if delivered or received prior to 4:00 p.m. (Vancouver
time) on such day (or on the next Business Day if received after the relevant
time or if received on a day that is not a Business Day). Each party may change
its address for service by written notice, given in the manner provided above,
to the other parties and such change shall be effective upon the date the notice
shall be deemed to be received. 




- 6 - 

                         Section
19      Severability.
The provisions of this guarantee are intended to be severable. If any
provision of this guarantee shall be held invalid or unenforceable in whole or
in part in any jurisdiction, such provision shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without in any
manner affecting the validity or enforceability thereof in any other
jurisdiction or the remaining provisions hereof in any jurisdiction. 

                         Section
20      Further Assurances.
The Guarantor shall from time to time do all such acts and things and
execute and deliver all such deeds, transfers, assignments and instruments as
the Guaranteed Party may reasonably require for carrying out the provisions and
intent hereof. 

                         Section
21      Currency and
Taxes. Any and all payments by the Guarantor under this guarantee or
any other Finance Document shall be made free and clear of and without deduction
or withholding for Taxes unless such Taxes are required by law to be deducted or
withheld. If the Guarantor shall be required by law to deduct or withhold any
Taxes from or in respect of any sum payable hereunder or thereunder: 

	 	(a) 	
      the sum payable shall be increased as may be necessary so
      that after making all required deductions or withholdings (including
      deductions or withholdings applicable to additional amounts paid under
      this section) the Guaranteed Party receives an amount equal to the sum it
      would have received if no deduction or withholding had been
made;

	 	 	 
	 	(b) 	
      the Guarantor shall make such deductions or withholdings;
      and

	 	 	 
	 	(c) 	
      the Guarantor shall pay the full amount deducted or
      withheld to the relevant Taxation or other authority in accordance with
      applicable law.



                         Section
22      Governing Law.
This guarantee shall be governed by and construed in accordance with the laws of
the province of British Columbia and the laws of Canada applicable therein. 

                         Section
23      Acknowledgements and
Representations. The Guarantor acknowledges that the Guarantor has
reviewed the Promissory Note and all documents and instruments in connection
therewith and is fully familiar with the terms of the loan, and that the
Guarantor will receive certain benefits as a result of the making of the loan,
and that this guarantee is a condition precedent to the making of the loan. The
Guarantor agrees that this guarantee is being made for the benefit of the
Guarantor. The Guarantor is adequately informed of the Debtor’s financial
condition, and agrees to keep so informed. The Guaranteed Party need not provide
the Guarantor with any present or future information concerning the financial
condition of the Debtor or its subsidiaries or any other guarantor, and changes
in the Debtor’s or the Guarantor’s financial condition shall not affect the
Guarantor’s obligations under this guarantee. The Guarantor has not relied on financial
information furnished by the Guaranteed Party, and will the Guarantor not do so
in the future. 




- 7 - 

                              The
Guarantor clearly understands that the Guaranteed Party does not have to pursue
the Debtor or pursue any other remedies before demanding payment from the
Guarantor. The Guarantor further understands that it will have to pay amounts
then due even if the Debtor or any of the other Guarantors do not make the
payment or are otherwise relieved of the obligation to make payments. 

                              IN
WITNESS WHEREOF the Guarantor has duly executed this guarantee as of the day
and year first above written. 

	SIGNED, SEALED and DELIVERED by 	)	QUANTUM SOLAR POWER CORP. 
	QUANTUM SOLAR POWER CORP. 	)	
	in the presence of: 	)	 
	  	)	 /s/ Daryl J. Ehrmantraut 
	  	)	Per:
      _______________________________________________
	  	)	 Name: Daryl J. Ehrmantraut 
	Name 	)	Title: COO 
	  	)	
	Address 	)	
	  	)	
	  	)	
	  	)	
	Occupation