QUANTUM FUEL SYSTEMS TECHNOLOGIES WORLDWIDE, INC. CONVERTIBLE PROMISSORY NOTE

Exhibit 10.4

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.

QUANTUM FUEL SYSTEMS TECHNOLOGIES WORLDWIDE, INC.

CONVERTIBLE PROMISSORY NOTE

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 Three Million Dollars ($3,000,000) 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.

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 , however , 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. 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; provided further , that 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.

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 31, 2010, together with all accrued and unpaid interest on the principal amount being repaid At the election of the Purchaser in its sole discretion and upon written notice to the Company no later than August 15, 2010, such maturity date shall be extended until August 31, 2013 (either such date, the “ Maturity Date ”); provided , however , that if the Company fails to raise gross proceeds of not less than $5,000,000 in an equity offering of the Company’s stock on or prior to October 1, 2009, the Maturity Date for this Note shall be October 1, 2009.

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:

(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, or fails to deliver the Common Shares to the Purchaser in the manner and at the times set forth in Article 6 hereof, 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

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(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 .

(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

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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.

ARTICLE VI

CONVERSION

Section 6.1 Conversion Procedure .

(a) At any time prior to the payment of this Note in full, the holder of this Note may convert all or any portion of the outstanding principal and/or accrued interest amount of this Note (including any Accreted Principal Amount, PIK Amounts and Default PIK Amounts) into a number of Common Shares (excluding any fractional share) determined by dividing the principal and/or Accreted Principal Amount (including PIK Amounts and Default PIK Amounts) designated by such holde