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THE SECURITY REPRESENTED BY THIS INSTRUMENT HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"). ACCORDINGLY, THIS SECURITY MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR
IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS, AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE
TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE
REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE
SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED
IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED
BY SUCH SECURITIES. THE TRANSFER OF THIS SECURITY IS ALSO SUBJECT
TO THE CONDITIONS SPECIFIED IN THE NOTE PURCHASE AGREEMENT, DATED
AS OF JANUARY 16, 2008, AS AMENDED AND MODIFIED FROM TIME TO TIME,
BETWEEN QUANTUM FUEL SYSTEMS TECHNOLOGIES WORLDWIDE, INC. (THE
"COMPANY") AND THE PURCHASER PARTY THERETO. THE COMPANY RESERVES
THE RIGHT TO REFUSE THE TRANSFER OF SUCH SECURITY UNTIL SUCH
CONDITIONS HAVE BEEN FULFILLED WITH RESPECT TO SUCH TRANSFER. UPON
WRITTEN REQUEST, A COPY OF SUCH CONDITIONS SHALL BE FURNISHED BY
THE COMPANY TO THE HOLDER HEREOF WITHOUT CHARGE.
THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO A CONVERTIBLE
NOTE PURCHASE AGREEMENT, DATED AS OF JANUARY 16, 2008, BY AND
BETWEEN THE COMPANY AND THE INVESTOR REFERRED TO THEREIN (THE
"PURCHASE AGREEMENT"), AND THE HOLDER OF THE NOTE, BY ACCEPTANCE OF
THIS NOTE, AGREES TO BE BOUND BY ALL APPLICABLE PROVISIONS OF THE
PURCHASE AGREEMENT.
THIS NOTE AMENDS AND RESTATES AN EXISTING CONVERTIBLE PROMISSORY
NOTE DATED JANUARY 16, 2008, IN THE ORIGINAL PRINCIPAL AMOUNT OF
$16,195,676.30 (THE "PRIOR NOTE") ISSUED BY THE UNDERSIGNED TO THE
ORDER OF WHITEBOX QT, LLC. (THE "HOLDER"). IT IS EXPRESSLY
INTENDED, UNDERSTOOD AND AGREED THAT THIS NOTE SHALL REPLACE THE
PRIOR NOTE AS EVIDENCE OF SUCH INDEBTEDNESS OF THE UNDERSIGNED TO
THE HOLDER, AND SUCH INDEBTEDNESS OF THE UNDERSIGNED TO THE HOLDER
HERETOFORE REPRESENTED BY THE PRIOR NOTE, AS OF THE DATE HEREOF,
SHALL BE CONSIDERED OUTSTANDING HEREUNDER FROM AND AFTER THE DATE
HEREOF AND SHALL NOT BE CONSIDERED PAID (NOR SHALL THE
UNDERSIGNED'S OBLIGATION TO PAY THE SAME BE CONSIDERED DISCHARGED
OR SATISFIED) AS A RESULT OF THE ISSUANCE OF THIS NOTE.
QUANTUM FUEL SYSTEMS
TECHNOLOGIES WORLDWIDE, INC.
AMENDED AND RESTATED
CONVERTIBLE PROMISSORY NOTE
May 30, 2008
$16,195,676.30
QUANTUM FUEL SYSTEMS TECHNOLOGIES WORLDWIDE, INC., a Delaware
corporation (the " Company "), hereby promises to pay to the
order of WB QT, LLC, a Delaware limited liability company (the "
Purchaser "), the principal amount of Sixteen Million, One
Hundred Ninety Five Thousand, Six Hundred Seventy Six and 30/100
Dollars ($16,195,676.30) plus the portion of the Accreted Principal
Amount (as defined below) in excess thereof together with interest
on the Accreted Principal Amount calculated from the date hereof in
accordance with the provisions of this Note. This Note is being
issued pursuant to the Note Purchase Agreement, dated as of January
16, 2008 (the " Purchase Agreement "), between the Company
and the Purchaser. The Purchase Agreement contains terms governing
the rights of the holder of this Note, and all provisions of the
Purchase Agreement are hereby incorporated herein in full by
reference, provided that to the extent that the terms and
conditions of this Note are different from or in addition to the
terms and conditions of the Purchase Agreement, the Purchase
Agreement shall be deemed amended hereby to conform to the terms
and conditions of this Note. Unless otherwise indicated herein,
capitalized terms used in this Note have the same meanings set
forth in the Purchase Agreement.
ARTICLE I
PAYMENT OF INTEREST; CONTINGENT INTEREST
Interest shall accrue on the Accreted Principal Amount (in each
case computed on the basis of a 365/366-day year and the actual
number of days elapsed in any year) at an annual rate equal to
11.50% (or, from and after any extension of the maturity date of
this Note under Section 2.1 below, 9.5%) per annum or (if less) at
the highest rate then permitted under applicable law, all of which
shall be payable by adding such interest to the Accreted Principal
Amount on each Interest Payment Date (as defined below), and on the
final maturity hereof (the " PIK Amounts "). At any time,
the outstanding principal amount of this Note, including all PIK
Amounts and Default PIK Amounts (as defined below) added thereto
through such time, is referred to in this Note as the " Accreted
Principal Amount ." All accrued interest (including PIK
Amounts, Default PIK Amounts and interest on the Accreted Principal
Amount) shall be added to the Accreted Principal Amount on the
first day of each July and January (each, an " Interest Payment
Date ") and on the final maturity date of this Note. Any
Accreted Principal Amount (including PIK Amounts and Default PIK
Amounts) which for any reason has not theretofore been paid shall
increase the principal of the Note and be paid in full on the date
on which the final principal payment on this Note is made (the "
Default PIK Amounts "); provided that any such reason shall
not affect or waive any Event of Default that arises due to the
failure to make such payment in cash. However, the Company has the
option to elect by written notice to Lender at least five (5)
business days prior to each Interest Payment Date to pay a total of
6.5% of the PIK Amounts in cash. Interest shall accrue on any
principal payment due under this Note (including as to accrued
interest added to the principal) until such time as payment
therefor is actually delivered to the holder of this Note.
ARTICLE II
PAYMENT OF PRINCIPAL ON NOTE
Section 2.1 Scheduled Payment. The Company shall pay the
Accreted Principal Amount or, if less, the outstanding principal
amount of this Note to the holder of this Note on August 1, 2009,
together with all accrued and unpaid interest on the principal
amount being repaid, notwithstanding anything to the contrary
herein including but not limited to the provisions of Section
6.1(c) herein. At the election of the Purchaser in its sole
discretion and upon written notice to the Company no later than May
15, 2009, such maturity date shall be extended until July 1, 2012
(either such date, the "Maturity Date").
Section 2.2 Conversion . Notwithstanding any provision
contained in this Article 2, the holder of this Note may
convert all or any portion of the outstanding principal amount of
this Note into shares of common stock, $.001 par value per share,
of the Company (the "Common Shares") in accordance with
Article 6 until such time as such principal amount has been
paid.
ARTICLE III
[Reserved].
ARTICLE IV
[Reserved].
ARTICLE V
EVENTS OF DEFAULT; REMEDIES ON DEFAULT
Section 5.1 Event of Default . An "Event of Default"
shall exist if any of the following conditions or events shall
occur and be continuing:
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(a) the Company defaults in the payment of principal on the Note
when the same becomes due and payable, whether at maturity or at a
date fixed for prepayment or by declaration or otherwise and such
failure to pay is not cured within three (3) business days after
the occurrence thereof; or
(b) the Company defaults in the payment of any interest on the
Note for more than five (5) business days after the same becomes
due and payable; or
(c) the Company defaults with respect to Section 6.1 of the
Purchase Agreement; or
(d) the Company defaults in the performance of, or compliance
with, any other term contained in the Purchase Agreement or the
Note (other than those referred to in Section 5.1(a), (b) or
(c) above) and the default is not remedied within thirty (30) days
after the earlier of (i) the Chief Executive Officer or the
Chief Financial Officer obtaining actual knowledge of the default
and (ii) the Company receiving written notice of the default
from the holder of this Note (any such written notice to be
identified as a "notice of default" and to refer specifically to
this Section 5.1(d)); or
(e) any representation or warranty made by the Company in
Article IV of the Purchase Agreement proves to have been false
in any material respect on the Closing Date; or
(f) the Company (i) is generally not paying, or admits in
writing its inability to pay its debts as they become due
(ii) files, or consents by answer or otherwise to the filing
against it of, a petition for relief or reorganization or
arrangement or any other petition in bankruptcy, for liquidation or
to take advantage of any bankruptcy, insolvency, reorganization,
moratorium or other similar law of any jurisdiction,
(iii) makes an assignment for the benefit of its creditors,
(iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to it or
with respect to any substantial part of its property or (v) is
adjudicated as insolvent or to be liquidated; or
(g) a court or Governmental Authority of competent jurisdiction
enters an order appointing, without consent by the Company, a
custodian, receiver, trustee or other officer with similar powers
with respect to it or with respect to any substantial part of its
property, or constituting an order for relief or approving a
petition for relief or reorganization or any other petition in
bankruptcy or for liquidation or to take advantage of any
bankruptcy or insolvency law of any jurisdiction, or ordering the
dissolution, winding-up or liquidation of the Company, or any such
petition shall be filed against the Company and such petition shall
not be dismissed within thirty (30) days; or
(h) an Event of Default (as defined in the Credit Agreement)
shall have occurred and be continuing and shall not have been
waived by the requisite holders of Indebtedness under the Credit
Agreement or cured.
Section 5.2 Acceleration.
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(a) If an Event of Default with respect to the Company described
in subsection (f) of Section 5.1 has occurred, the Note
shall automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is
continuing, the holder of the Note may at any time at his, her or
its option, by notice to the Company, declare the Note to be
immediately due and payable.
(c) Upon the Note becoming due and payable under this
Section 5.2, whether automatically or by declaration, the Note
will forthwith mature and the entire unpaid principal amount of the
Note, plus all accrued and unpaid interest thereon, shall all be
immediately due and payable, in each and every case without
presentment, demand, protest or further notice, all of which are
hereby waived.
Section 5.3 Other Remedies . If any Event of Default has
occurred and is continuing, and irrespective of whether the Note
has become or has been declared immediately due and payable under
Section 5.1, the holder of the Note may proceed to protect and
enforce the rights of such holder by an action at law, suit in
equity or other appropriate proceeding, whether for the specific
performance of any agreement contained herein, or for an injunction
against a violation of any of the terms hereof or thereof, or in
aid of the exercise of any power granted hereby or thereby or by
law or otherwise.
Section 5.4 No Waivers or Election of Remedies; Expenses
. No course of dealing and no delay on the part of the holder of
the Note in exercising any right, power or remedy shall operate as
a waiver thereof or otherwise prejudice such holder's rights,
powers or remedies. The Company shall pay the principal and
interest of the Note without any deduction for any setoff or
counterclaim. No right, power or remedy conferred by the Purchase
Agreement or by the Note upon the holder thereof shall be exclusive
of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or
otherwise. The Company will pay to the holder of the Note on demand
such further amount as shall be sufficient to cover all reasonable
costs and expenses of such holder incurred in any enforcement or
collection under this Article 5, including, without
limitation, reasonable attorneys' fees, expenses and
disbursements.
Section 5.5 Waiver of Demand . The Company hereby waives
diligence, presentment, protest and demand and notice of protest
and demand, dishonor and nonpayment of this Note, and expressly
agrees that this Note, or any payment hereunder, may be extended
from time to time and that the holder hereof may accept security
for this Note or release security for this Note, all without in any
way affecting the liability of the Company hereunder.
ARTIC
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