Investment Commitment Agreement between Whitebox Advisors LLC and Quantum Fuel Systems Technology
This agreement, dated May 30, 2008, is between Whitebox Advisors LLC and Quantum Fuel Systems Technology. Whitebox grants Quantum the option to request a $10 million investment before August 31, 2009, with Whitebox choosing the investment structure from several options, including discounted stock, convertible notes, or straight notes. In return, Quantum grants Whitebox the option to invest $10 million in a 0% note, redeemable at a premium and convertible into stock. The agreement outlines the terms, pricing, and expiration for both parties' investment options.
WHITEBOX
May 30, 2008
Brian Olson, CFO/Treasurer
Quantum Fuel Systems Technology
17872 Cartwright Road
Irvine, CA 92614
Brian Olson-
This letter describes the terms under which Whitebox grants to Quantum the option to call on Whitebox for a further $10,000,000 investment in Quantum. The option will expire on August 31, 2009. Should Quantum exercise this option, Whitebox will choose the investment structure most suited to it, either:
- stock at a 25% discount to Market Price with 100% warrant coverage having same strike price as the stock purchase price. Market Price is the lower of A) average of 5 days closing price ending on the day of exercise of option, or B) closing price on day of exercise of option.
- a 2 year secured convertible note, the conversion price equal to a 10% discount to the Market Price, and the coupon equal to 12% payable in stock.
- a senior secured straight note that redeems in cash a 120% of face value after one year.
In exchange for extending the above option to Quantum, Quantum will grant to Whitebox the option to make a $10,000,000 investment in a 0% note priced at 100% of par and redeemable at 120% of par 24 months after the funding date. The note will be convertible into stock at Market Price.
Accepted by-
Whitebox Advisors LLC
/s/ Andrew Redleaf
Andrew Redleaf
Managing Member of the General Partner
Quantum Fuel Systems Technology
/s/ Brian Olson
Brian Olson
CFO/Treasurer
3033 Excelsior Boulevard * Suite 300 * Minneapolis, MN 55416
612 ###-###-#### * fax 612 ###-###-#### * www.whiteboxadvisors.com
