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Exhibit 10.12
GUARANTY
THIS GUARANTY, dated as of January 31, 2007, is made and given
by QUANTUM FUEL SYSTEMS TECHNOLOGIES WORLDWIDE, INC., a Delaware
corporation (the " Guarantor "), in favor of Whitebox
Convertible Arbitrage Partners L.P., Whitebox Hedged High Yield
Partners L.P., Pandora Select Partners L.P., and Whitebox
Intermarket Partners L.P, each a " Purchaser " and
collectively the " Purchasers " as defined in and party to
the Purchase Agreement (defined below).
RECITALS
A. The Purchasers have extended credit accommodations to Tecstar
Automotive Group, Inc. (f/k/a Starcraft Corporation), an Indiana
corporation (the " Company "), under that certain
Convertible Senior Subordinated Note Purchase Agreement, dated as
of July 12, 2004 (as amended and modified from time to time,
the " Purchase Agreement "), between the Company and the
Purchasers.
B. The Guarantor desires to obtain extensions of credit under
that certain Credit Agreement, dated concurrently herewith (as the
same may hereafter be amended, restated, or otherwise modified from
time to time, the " Credit Agreement "), by and among the
Guarantor and the Lenders (as defined therein) signatory
thereto.
C. It is a condition precedent to the obligation of the Lenders
to extend credit accommodations pursuant to the terms of the Credit
Agreement that this Guaranty be executed and delivered by the
Guarantor in connection with the Company’s issuance of
Amended and Restated Convertible Subordinated Promissory Notes (the
" Notes ") under the Purchase Agreement.
D. The Company is a Subsidiary (as defined in the Credit
Agreement) of the Guarantor.
E. The Guarantor finds it advantageous, desirable and in its
best interests to execute and deliver this Guaranty to the
Purchasers.
NOW, THEREFORE, in consideration of the credit accommodations to
be extended to the Company and for other good and valuable
consideration, the Guarantor hereby covenants and agrees with the
Purchasers for their ratable benefit as follows:
Section 1. Defined Terms . As used in this Guaranty,
the following terms shall have the meaning indicated:
" Company " shall have the meaning indicated in Recital
A.
" Credit Agreement " shall have the meaning indicated in
Recital B.
" Guarantor " shall have the meaning indicated in the
opening paragraph hereof.
" Obligations " shall mean all indebtedness, liabilities
and obligations of the Company to
the Purchasers of every kind, nature, or
description under the Purchase Agreement, including principal of,
and interest on, the Notes, and any extension, renewal or
replacement thereof, in all cases whether due or to become due, and
whether now existing or hereafter arising or incurred.
" Person " shall mean any individual, corporation,
partnership, limited partnership, limited liability company, joint
venture, firm, association, trust, unincorporated organization,
government or governmental agency or political subdivision or any
other entity, whether acting in an individual, fiduciary or other
capacity.
" Purchase Agreement " shall have the meaning indicated
in Recital A.
" Purchaser " shall have the meaning indicated in the
opening paragraph hereof.
Section 2. The Guaranty . Subject always to the
following Section 3, the Guarantor hereby absolutely and
unconditionally guarantees to the Purchasers the payment when due
(whether at a stated maturity or earlier by reason of acceleration
or otherwise) and performance of the Obligations.
Section 3. Limitation; Insolvency Laws . As used in
this Section: (a) the term "Applicable Insolvency Laws" means
the laws of the United States of America or of any State, province,
nation or other governmental unit relating to bankruptcy,
reorganization, arrangement, adjustment of debts, relief of
debtors, dissolution, insolvency, fraudulent transfers or
conveyances or other similar laws (including, without limitation,
11 U. S. C. §547, §548, §550 and other "avoidance"
provisions of Title 11 of the United Stated Code) as applicable in
any proceeding in which the validity and/or enforceability of this
Guaranty or any Specified Lien is in issue; and (b) "Specified
Lien" means any security interest, mortgage, lien or encumbrance
securing this Guaranty, in whole or in part. Notwithstanding any
other provision of this Guaranty, if, in any proceeding, a court of
competent jurisdiction determines that this Guaranty or any
Specified Lien would, but for the operation of this Section, be
subject to avoidance and/or recovery or be unenforceable by reason
of Applicable Insolvency Laws, this Guaranty and each such
Specified Lien shall be valid and enforceable only to the maximum
extent that would not cause this Guaranty or such Specified Lien to
be subject to avoidance, recovery or unenforceability. To the
extent that any payment to, or realization by, the Purchasers on
the guaranteed Obligations exceeds the limitations of this Section
and is otherwise subject to avoidance and recovery in any such
proceeding, the amount subject to avoidance shall in all events be
limited to the amount by which such actual payment or realization
exceeds such limitation, and this Guaranty as limited shall in all
events remain in full force and effect and be fully enforceable
against the Guarantor. This Section is intended solely to reserve
the rights of the Purchasers hereunder against the Guarantor in
such proceeding to the maximum extent permitted by Applicable
Insolvency Laws and neither the Guarantor, the Company, any other
guarantor of the Obligations nor any Person shall have any right,
claim or defense under this Section that would not otherwise be
available under Applicable Insolvency Laws in such proceeding.
Section 4. Continuing Guaranty . This Guaranty is an
absolute, unconditional and continuing guaranty of payment and
performance of the Obligations, and the obligations of the
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Guarantor hereunder shall not be released, in
whole or in part, by any action or thing which might, but for this
provision of this Guaranty, be deemed a legal or equitable
discharge of a surety or guarantor, other than irrevocable payment
and performance in full of the Obligations. No notice of the
Obligations to which this Guaranty may apply, or of any renewal or
extension thereof need be given to the Guarantor and none of the
foregoing acts shall release the Guarantor from liability
hereunder. The Guarantor hereby expressly waives (a) demand of
payment, presentment, protest, notice of dishonor, nonpayment or
nonperformance on any and all forms of the Obligations;
(b) notice of acceptance of this Guaranty and notice of any
liability to which it may apply; (c) all other notices and
demands of any kind and description relating to the Obligations now
or hereafter provided for by any agreement, statute, law, rule or
regulation; and (d) any and all defenses of the Company
pertaining to the Obligations except for the defense of discharge
by payment. The Guarantor shall not be exonerated with respect to
the Guarantor’s liabilities under this Guaranty by any act or
thing except irrevocable payment and performance of the
Obligations, it being the purpose and intent of this Guaranty that
the Obligations constitute the direct and primary obligations of
the Guarantor and that the covenants, agreements and all
obligations of the Guarantor hereunder be absolute, unconditional
and irrevocable. The Guarantor shall be and remain liable for any
deficiency remaining after foreclosure of any mortgage, deed of
trust or security agreement securing all or any part of the
Obligations, whether or not the liability of the Company or any
other Person for such deficiency is discharged pursuant to statute,
judicial decision or otherwise. The acceptance of this Guaranty by
the Purchasers is not intended and does not release any liability
previously existing of any guarantor or surety of any indebtedness
of the Company to the Purchasers.
Section 5. Other Transactions . The Purchasers are
expressly authorized (a) to exchange, surrender or release
with or without consideration any or all collateral and security
which may at any time be placed with it by the Company or by any
other Person, or to forward or deliver any or all such collateral
and security directly to the Company for collection and remittance
or for credit, or to collect the same in any other manner without
notice to the Guarantor and (b) to amend, modify, extend or
supplement the Purchase Agreement, the Notes, any note or other
instrument evidencing the Obligations or any part thereof and any
other agreement with respect to the Obligations, waive compliance
by the Company or any other Person with the respective terms
thereof and settle or compromise any of the Obligations without
notice to the Guarantor and without in any manner affecting the
absolute liabilities of the Guarantor hereunder. No invalidity,
irregularity or unenforceability of all or any part of the
Obligations or of any security therefor or other recourse with
respect thereto shall affect, impair or be a defense to this
Guaranty. The liabilities of the Guarantor hereunder shall not be
affected or impaired by any failure, delay, neglect or omission on
the part of the Purchasers to realize upon any of the Obligations
of the Company to the Purchasers, or upon any collateral or
security for any or all of the Obligations, nor by the taking by
the Purchasers of (or the failure to take) any other guaranty or
guaranties to secure the Obligations, nor by the taking by the
Purchasers of (or the failure to take or the failure to perfect its
security interest in or other lien on) collateral or security of
any kind. No act or omission of the Purchasers, whether or not such
action or failure to act varies or increases the risk of, or
affects the rights or remedies of the Guarantor shall affect or
impair the obligations of the Guarantor hereunder. The Guarantor
acknowledges that this Guaranty is in effect and binding without
reference to whether this Guaranty is signed by any
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other Person or Persons, that possession of this
Guaranty by the Purchasers shall be conclusive evidence of due
delivery hereof by the Guarantor and that this Guaranty shall
continue in full force and effect, both as to the Obligations then
existing and/or thereafter created, notwithstanding the release of
or extension of time to any
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