THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Quantum Fuel Systems Technologies Worldwide, Inc. (QTWW)

8/12/2005 Proxy Information

Mr. Rasmussen has been Chairman of Quantum Fuel Systems Technologies Worldwide, Inc. (Quantum) since February 2002. Since April 1984, he has held various positions at IMPCO Technologies, Inc. (IMPCO), Quantum's previous parent company, including his current position as Senior Vice President and Secretary since June 1989, as well as Vice President of Finance and Administration.

Agreements with our Directors and Executive Officers

We have entered into indemnification agreements with each of our directors and executive officers that provide the maximum indemnity available to directors and officers under Section 145 of the Delaware General Corporation Law and our charter, as well as certain additional procedural protections. We have also entered into employment and related agreements with certain of our executive officers, as described under “Executive Compensation—Employment Agreements and Change-in-Control Arrangements.”

Agreements with General Motors

We have entered into a strategic alliance with General Motors regarding the development of fuel cell systems. Under the terms of the strategic alliance, General Motors acquired shares of our stock representing 19.9% of our issued and outstanding capital stock following the distribution. As a result of subsequent issuances of capital stock via public offerings, stock options exercises and in connection with the acquisition of Starcraft, General Motors’ ownership has declined to approximately 8.5% of our issued and outstanding common stock as of August 1, 2005. We entered into the agreements described below with General Motors in connection with the alliance. These agreements have been listed as exhibits to our Annual Report on Form 10-K for the 2005 fiscal year. The following description is only a summary and is qualified by reference to the filed exhibits.

Corporate Alliance Agreement

The Corporate Alliance Agreement between us and General Motors serves to formalize our agreement to work together to advance and commercialize, on a global basis, fuel cell systems, and the market for fuel cells to be used in transportation, mobile, stationary and portable applications. The Corporate Alliance Agreement became effective upon the distribution and has a term of ten years, which ends on July 22, 2012. The agreement provides that:

• General Motors is obligated to actively support, endorse and recommend us to its customer base;

• General Motors will assist and provide guidance with respect to our directed research and development of fuel cell applications;

• we will appoint one individual nominated by General Motors to our board of directors prior to or promptly after the distribution, and thereafter during the term of the agreement we will continue to nominate one individual designated by General Motors to our proposed slate of directors to be presented to our stockholders as necessary for General Motors to retain one seat on our board of directors;

• General Motors will be entitled to appoint an “ex-officio” board member with non-voting capacity during the term of the agreement;

• we committed to spend $4.0 million annually for specific research and development projects directed by General Motors to speed the commercialization of our fuel cell related products; and

• beginning July 24, 2005 for non-automotive applications and July 24, 2008 for automotive applications, we are obligated to provide revenue sharing payments to General Motors based on a percentage of gross revenue derived from sales of applications developed under the strategic alliance. The revenue sharing payments will equal 5% of applicable gross revenue through July 23, 2015, 4% for the ten-year period ending July 23, 2025, 3% for the ten-year period ending July 23, 2035, and 2% for the ten-year period ending July 23, 2045. On July 23, 2045, we will also be obligated to provide a final revenue sharing payment to General Motors equal to the present value of future revenue sharing payments that would otherwise be payable to General Motors on an annual basis assuming an income stream to General Motors of 2% of our gross revenues in perpetuity.

As outlined above, we committed to spend $4.0 million annually for specific research and development projects directed by General Motors to speed the commercialization of fuel cell related products. Since this commitment was waived or partially waived by General Motors for calendar years 2002, 2003 and 2004, we anticipate that this commitment will be waived or partially waived in the future. We and General Motors agreed upon a Directed Research and Development Statement of Work that covered the period from May 15, 2004 though May 14, 2005. The statement of work outlined specific tasks for the advancement of compressed fuel storage technologies enabling improved performance. Total spending under the statement of work approximated $1.8 million. Each party retains the ownership of its existing technology and will jointly own technology that is created under the alliance. We have the opportunity to use jointly created technologies in certain aspects of our business but will be required to share revenue with General Motors on fuel cell system-related products that are sold to General Motors or third parties.

Under the agreement, General Motors has a right of first refusal in the event that we propose to sell, or otherwise transfer our fuel cell-related intellectual property contemplated under the Corporate Alliance Agreement. In the event that we decide to discontinue operations or we are deemed insolvent, General Motors has the right to purchase the intellectual property contemplated under the Corporate Alliance Agreement at a price to be determined by an independent appraisal firm approved by both us and General Motors.

Stock Transfer Agreement

We entered into a Stock Transfer Agreement pursuant to which we agreed to issue to General Motors shares of our Series A common stock representing 19.9% (since diluted to 8.5% as of August 1, 2005) of our total issued and outstanding capital stock after the distribution. We issued the Series A common stock immediately following the distribution. The Series A common stock automatically converted into common stock upon the closing of our initial public offering in January 2003. We also agreed that, subject to limited exceptions, we would not issue any stock in a private placement transaction without the prior written consent of General Motors.

Registration Rights Agreement

We entered into a Registration Rights Agreement with General Motors pursuant to which General Motors may demand that we file a registration statement under the Securities Act covering some or all of our common stock General Motors would receive upon conversion of its Quantum Series A common stock. General Motors may make this demand at any time after the earlier of three years following the distribution or six months after the effective date of our first registration statement for a public offering of its securities to the general public, which was January 16, 2003. We are not required to effect more than two demand registrations nor are we required to effect a registration if the requested registration would have an aggregate offering price to the public of less than $20 million. In an underwritten offering, the managing underwriter of any such offering has the right to limit the number of registrable securities to be included in the registration statement.

General Motors also has “piggyback” registration rights. If we propose to register any of our equity securities under the Securities Act other than pursuant to the demand registration rights described above or certain excluded registrations, General Motors may require us to include all or a portion of our registrable securities in the registration and in any related underwriting. Further, if we are eligible to effect a registration on Form S-3, General Motors may demand that we file a registration statement on Form S-3 covering all or a portion of General Motors’ registrable Quantum securities, provided that the registration has an aggregate offering price of at least $10 million. We will not be required to effect more than two such registrations in any twelve-month period. In general, we will bear all fees, costs, and expenses of such registrations, other than underwriting discounts and commissions. We also agreed to take such reasonable actions as are necessary to make Rule 144 available to General Motors for the resale of its registrable securities without registration under the Securities Act.

Master Technical Development Agreement

Under the terms of our Master Technical Development Agreement with General Motors, we have agreed to work with General Motors to facilitate the integration, interface, and optimization of General Motors’ fuel cell systems with our gaseous fuel storage and handling modules. To that end, the agreement provides for the establishment of joint Quantum/General Motors technical teams to implement statements of work with respect to the development of fuel cell applications. In addition, the agreement provides that both we and General Motors will license our fuel cell related technologies to each other for the purpose of developing, manufacturing, and selling the fuel cell applications developed under the strategic alliance.

Agreements Entered Into in Connection with our Merger with Starcraft

In connection with our merger with Starcraft, which was completed in March 2005, Starcraft agreed to terminate the employment, severance, change of control and similar agreements it had with Kelly L. Rose, former Chairman of the Board of Starcraft. In connection with the merger, Mr. Rose received shares of our stock representing over 5% of our then outstanding shares of common stock. Mr. Rose’s ownership of our outstanding shares of common stock as of August 1, 2005 was less than 5%.

Upon the closing of our merger with Starcraft, Starcraft and Mr. Rose entered into a Separation Agreement, a Mutual Release of Claims, a Consulting Agreement, an Asset Purchase and Sale Agreement and an Assignment of Patents, Trademarks and Licenses. These agreements collectively provided for the following:

• Mr. Rose will be engaged as a consultant to Starcraft through December 31, 2005 at annual compensation of $450,000, to be paid in full upon Mr. Rose’s termination, death or disability;

• Mr. Rose will receive continuation of health benefits for two years;

• Mr. Rose will receive continuation of directors and officers insurance coverage for six years;

• Mr. Rose will have continued use of his office and executive assistant;

• Starcraft will pay on Mr. Rose’s behalf the amount of any excise taxes determined to result from any payments or benefits provided to Mr. Rose under any of its agreements with Mr. Rose, up to a maximum of $300,000;

• Mr. Rose and Starcraft released each other and their respective affiliates from liabilities arising out of or relating to Mr. Rose’s employment by Starcraft and any financial or other obligation otherwise outstanding as of the closing of our merger with Starcraft;

• Starcraft transferred to Mr. Rose the assets, including equipment, inventory, land, building and business records, related to the Starcraft accessories business, including the parts business, kit business, and second stage and aftermarket conversion, kits, parts, components and accessories business;

• Starcraft transferred its rights in the “Starcraft” name to Mr. Rose, and Mr. Rose granted Starcraft a license to use the “Starcraft” name for limited purposes; and

• Starcraft transferred certain other patents, trademarks and license agreements to Mr. Rose, with maintenance fees to be paid by Starcraft during the existing terms only.

Mr. Rose is also a party to the registration rights agreement discussed below under “Starcraft Registration Rights Agreements.”

Starcraft Registration Rights Agreements

Under the terms of the Starcraft merger agreement, we agreed to enter into a registration rights agreement with each of Jeffrey P. Beitzel, Douglass C. Goad and Richard A. Anderson (each of whom currently serve as executive officers of Quantum), and Kelly L. Rose, Starcraft’s former Chairman of the Board, to permit resale of the shares of Quantum common stock received by these individuals in the merger.

Pursuant to the registration rights agreements, we will:

• use our reasonable best efforts to file a shelf registration statement with respect to the merger shares received by these individuals in the merger, and to maintain the effectiveness of the registration statement through the first anniversary of the completion of the merger;

• pay all registration expenses, except that each selling securityholder is responsible for all selling commissions and discounts and any out-of-pocket expenses of such selling securityholders; and

• indemnify the selling securityholders from and against any losses caused by any untrue statement of material fact contained in the shelf registration statement.

Each selling securityholder generally will be required to provide information about itself and the specifics of the sale, be named as a selling securityholders in the related prospectus, deliver a prospectus to purchasers, indemnify us from any liabilities relating to any untrue statement of material fact provided by such securityholder for inclusion in the registration statement and be bound by the provisions of the registration rights agreement which are applicable to such holder.