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Exhibit
10.5
WAIVER OF RIGHT OF
FIRST REFUSAL
THIS SETTLEMENT AGREEMENT
AND WAIVER OF RIGHT OF FIRST REFUSAL (this
“Agreement”) is made and entered into this 22
nd day of June, 2007, by and between Quantum Fuel
Systems Technologies Worldwide Inc. (“Company”) and
each of the undersigned investors (each hereinafter named
“Investor” and collectively
“Investors”).
WHEREAS, Company and
Investors are parties to a certain Securities Purchase Agreement
dated October 27, 2006 (“Securities Purchase
Agreement”);
WHEREAS, pursuant to
Section 9.6 of the Securities Purchase Agreement, each
Investor has a right of first refusal (“Right of First
Refusal”) to participate in certain offerings by Company of
its common stock and common stock equivalents (“Subsequent
Placements”);
WHEREAS, Company now
desires to consummate a private placement transaction
(“Private Placement”) under which it will sell and
issue shares of its common stock and warrants to acquire common
stock pursuant to the Securities Purchase Agreement dated
June 22, 2007 attached as Exhibit “A” hereto (the
“2007 Securities Purchase Agreement”);
WHEREAS, Company
acknowledges that the Private Placement is a Subsequent Placement
pursuant to the Securities Purchase Agreement;
WHEREAS, to comply
with applicable NASDAQ Marketplace Rules, Company has requested
that each Investor waives its Right of First Refusal;
and
WHEREAS, subject to
the terms and conditions of this Agreement, each Investor has
agreed to waive its Right of First Refusal only with respect to the
Private Placement on the terms set forth in the 2007 Securities
Purchase Agreement.
NOW, THEREFORE, the
parties agree as follows:
1. Waiver of
Right of First Refusal . Investors hereby agree to waive
their rights under Section 9.6(b) of the Securities Purchase
Agreement only with respect to the Private Placement on the terms
set forth in the 2007 Securities Purchase Agreement. By executing
this Agreement and accepting the consideration (as set forth below
in Section 2 below), upon completion of the Private Placement
pursuant to the 2007 Securities Purchase Agreement each Investor
agrees for itself and each of its affiliates not to sue, assert any
claim or make any demand against Company alleging a breach or
default by Company of Section 9.6(b) in respect of the Private
Placement.
2. Consideration
to be Paid by Company . At the closing of the Private
Placement, Company shall issue to each Investor in accordance with
Schedule 1 attached
hereto, a warrant, in the form attached
hereto as Exhibit “B” (“Warrants”), to
purchase up to that number of shares of common stock
(“Warrant Shares”), $.001 par value, of the Company set
forth opposite such Investor’s name on Schedule 1 attached
hereto, at an exercise price equal to $2.09. Company agrees to
include the Warrant Shares in the registration statement required
to be filed in connection with the Private Placement pursuant to
the 2007 Securities Purchase Agreement.
3. Binding
Effect . This Agreement shall be binding upon and inure to
the benefit of the heirs, successors, administrators, legal
representatives, and assigns of the parties.
4. Amendments;
Waiver. This Agreement may not be modified or amended
except pursuant to an instrument in writing signed by Company and
each Investor. Any waiver of a provision of this Agreement must be
in writing and executed by the party against whom enforcement of
such waiver is sought.
5. Entire
Agreement; Severability . This Agreement sets forth the
entire agreement and understanding of the parties relating to the
subject matter hereof and supersedes all prior and contemporaneous
agreements, negotiations and understandings between the parties,
both oral and written relating to the subject matter hereof. If any
provision contained in this Agreement is determined to be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
6.
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