Document:

Unassociated Document

     Execution
      Version

    
 

     

    Indicative
      Financing Term Sheet 

     

    by
      Citadel Equity Fund Ltd.

     

    Merrill
      Lynch International

     

    and

     

    Harbin
      Electric, Inc.

    

     

    Date
      of Agreement: August 2, 2006

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Execution
      Version

     

    Harbin
      Electric - New Senior Secured Notes + Warrants

     

    Indicative
      for Discussion - Terms of New Senior Secured Notes and Warrants (“Term
      Sheet”)

     

    Currency
      denomination in U.S. Dollars ($) 

    
      	 	 	 
	
              Issuer

            	 	
              Harbin
                Electric, Inc. (U.S. public ticker symbol HRBN), a U.S. public company
                with operations based in Harbin, China (“Harbin”, “Issuer,” “HoldCo,” or
                the “Company”) and common stock traded on the U.S. OTC market.
                

            
	 	 	 
	
              Guarantors

            	 	
              Advanced
                Electric Motors Inc., a Delaware corporation, and all of the Issuer’s
                existing and future subsidiaries, other than subsidiaries domiciled
                in the
                PRC. Advanced Electric Motors Inc. is currently the only subsidiary
                of the
                Issuer not domiciled in the PRC.

            
	 	 	 
	
              Offerees
                

            	 	
              Citadel
                Equity Fund Ltd. or its affiliates (collectively, “Citadel”), and Merrill
                Lynch International or its affiliates (excluding the Placement Agent)
                (collectively, “Merrill Lynch”).

            
	 	 	 
	
              Placement
                Agent

            	 	
              Merrill
                Lynch Far East

            
	 	 	 
	
              New
                Notes Offered 

            	 	
              Senior
                Secured Notes (the “Notes”) issued under an indenture (the “Indenture”) to
                be entered into between Issuer, the Guarantors and the Trustee for
                the
                Notes. The Notes issued to Citadel are referred to herein as the
“2012
                Notes” and the Notes issued to Merrill Lynch are referred to herein as the
                “2010 Notes”.

            
	 	 	 
	
              Issue
                Format

            	 	
              Regulation
                S

            
	 	 	 
	
              Ratings

            	 	
              Not
                rated

            
	 	 	 
	
              Listing

            	 	
              None

            
	 	 	 
	
              Clearing
                System

            	 	
              Euroclear/Clearstream

            
	 	 	 
	
              Use
                of Proceeds 

            	 	
              General
                working capital, capital expenditure on core businesses and acquisitions
                of Harbin Taifu Auto Co., Ltd. and one rotary motor
                manufacturer.

            
	 	 	 
	
              Principal
                Amount of Issue 

            	 	
              $50.0MM
                aggregate principal amount (“Principal Amount”) of Notes. Face Value of
                Notes to be $1,000 (“Face Value”) per Note. Initial issue price will be at
                100.0% of Principal Amount (“Initial Issue Price”).

               

              Citadel
                to subscribe to $38.0MM of Principal Amount (the “Citadel Amount”).
                

               

              Merrill
                Lynch to subscribe to $12.00MM of Principal Amount (the “ML
                Amount”).

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

      Execution
        Version

    

    
      	 	 	 
	
              Maturity
                of the 2012 Notes

            	 	
              Maturity
                of the 2012 Notes on the date 6 years from date of issue (no later
                than 14
                August, 2012) (“Date of Issue”).

               

              Amortizing
                principal repayment schedule (“Prepayment Schedule”) as follows: $2.4MM of
                Principal Amount at year 3.0, $3.8MM of Principal Amount at year
                3.5,
                $9.9MM of Principal Amount at year 4.0, $9.9MM of Principal Amount
                at year
                4.5, $4.0MM at year 5.0, $4.0MM at year 5.5, and $4.0MM at year 6.0.
                

               

              Continuously
                puttable by the holders of the 2012 Notes for cash at 100% of Principal
                Amount beginning on the date 5.0 years from date of issuance plus
                accrued and unpaid interest, if any, to the put date. 

            
	 	 	 
	
              Maturity
                of the 2010 Notes

            	 	
              Maturity
                of the 2010 Notes on the date 4 years from the Date of Issue.

               

              Prepayment
                Schedule as follows: $2MM of Principal Amount at year 1.5, 2, 2.5,
                3, 3.5
                and 4. 

            
	 	 	 
	
              Optional
                Redemption on the 2012 Notes

            	 	
              On
                or after the first year anniversary of the Date of Issue, the Company
                may
                redeem all of the outstanding principal amount of the 2012 Notes
                at a
                redemption price (expressed as percentages of the principal amount)
                set
                forth below plus accrued an unpaid interest on the 2012 Notes redeemed,
                to
                the applicable redemption date:

            	 	 	 
	 	 	 	 
	
               

            	 	
              
                Year

              

            	
              Percentage

            
	 	 	 	 
	
               

            	 	
              
                2

              

            	
              106

            
	 	 	 	 
	
               

            	 	
              
                3

              

            	
              104.5

            
	 	 	 	 
	
               

            	 	
              
                4

              

            	
              103

            
	 	 	 	 
	
               

            	 	
              
                5

              

            	
              101.5

            
	 	 	 	 
	
               

            	 	
              
                6

              

            	
              100

            
	 	 	 

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    Execution
      Version

    
      	 	 	 	 	 	 
	
              Optional
                Redemption on the 2010 Notes

            	 	
              On
                or after the first year anniversary of the Date of Issue, the Company
                may
                redeem all of the outstanding principal amount of the 2010 Notes
                at a
                redemption price (expressed as percentages of the principal amount)
                set
                forth below plus accrued an unpaid interest on the 2010 Notes redeemed,
                to
                the applicable redemption date:

            	 	 	 
	 	 	 	 
	
               

            	 	
              
                Year

              

            	
              Percentage

            
	 	 	 
	
               

            	 	
              
                2

              

            	
              106

            
	 	 	 
	
               

            	 	
              
                3

              

            	
              103

            
	 	 	 
	
               

            	 	
              
                4

              

            	
              100

            
	 	 	 
	
              Coupon
                on the 2012 Notes

            	 	
              Floating
                cash coupon (“Cash Coupon”) on the 2012 Notes of LIBOR + 335bps per annum,
                paid semi-annually in cash in arrears, with the LIBOR rate reset
                semi-annually.

            
	 	 	 
	
              Coupon
                on the 2010 Notes

            	 	
              Cash
                Coupon on the 2010 Notes of LIBOR + 475bps per annum, paid semi-annually
                in cash in arrears, with the LIBOR rate reset
                semi-annually.

            
	 	 	 
	
              “Step-up”
                on Coupon on the Notes

            	 	
              Cash
                Coupon’s margin on the Notes will step up permanently by 200bps if there
                is no NASDAQ Capital Markets (f/k/a Small Cap Market) or NASDAQ Global
                Market (f/k/a National Market) public listing for the Issuer by 1
                July,
                2007 (“Step Trigger Date”). 

               

              If
                there is no NASDAQ Capital Markets (f/k/a Small Cap Market) or NASDAQ
                Global Market (f/k/a National Market) public listing by April 1,
                2007, the
                Company must pay a $750K liquidated damages amount within 7 days
                payable
                pro-rata by Principal Amount held at such date by then current holders
                of
                the Notes (“Holders”).

               

              In
                addition, if there is no NASDAQ Capital Markets (f/k/a Small Cap
                Market)
                or NASDAQ Global Market (f/k/a National Market) public listing by
                the Step
                Trigger Date, the Company must pay a $1.5MM liquidated damages amount
                within 7 days payable pro-rata by Principal Amount held at the Step
                Trigger Date by then current
                Holders.

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    Execution
      Version

    
      	 	 	 
	
              Detachable
                Equity Warrants to the 2012 Notes

            	 	
              Concurrent
                with the issue of the 2012 Notes, the Company shall issue to Citadel
                fully
                detachable warrants on Harbin common stock with maturity 6-years
                from Date
                of Issue (“Warrant Maturity Date”). The warrants will be exercisable at
                the option of the warrant holders beginning on the Date of Issue
                through
                the Warrant Maturity Date. At Date of Issue, the warrants shall be
                granted
                in two tranches (the “First Warrant Tranche” and “Second Warrant
                Tranche”). 

               

              The
                per warrant strike price of the First Warrant Tranche shall be equal
                to
                the lower of (i) $8.50 or (ii) 90% of the 7 day volume-weighted average
                trading price of the issuer’s Common Stock immediately prior to the date
                hereof (“First Warrant Tranche Strike Price”). Quantity of the First
                Warrant Tranche warrants shall be calculated based upon 45% of the
                Citadel
                Amount (e.g., 45% of the Citadel Amount divided by the First Warrant
                Tranche Strike Price).

               

              The
                per warrant strike price of the Second Warrant Tranche shall be equal
                to
                the lower of (i) $11.50 or (ii) 125% of the 7 day volume-weighted
                average
                trading price of the Issuer’s Common Stock immediately prior to the date
                hereof (“Second Warrant Tranche Strike Price”). Quantity of the Second
                Warrant Tranche warrants shall be calculated based upon 15% of the
                Citadel
                Amount (e.g,. 15% of the Citadel Amount divided by the Second Warrant
                Tranche Strike Price).

            

    

     

    
      	 	 	
              For
                the life of the 2012 Notes, both the First Warrant Tranche Strike
                Price
                and the Second Warrant Tranche Strike Price shall be fully-adjusted
                following any and all share dilution events, except for options issued
                pursuant to the Company’s employee option plan (in such amount not to
                exceed (i) 450,000 shares for the period commencing on the Date of
                Issue
                through the remainder of 2006 and (ii) 300,000 shares per year for
                any
                subsequent year) and shares issued in connection with the acquisition
                of
                Harbin Taifu Auto Co., Ltd. (in an amount not to exceed 750,000 shares)
                (collectively, the “Permitted Issuances”). Adjustment shall be 100%
                directly proportional to dilution on outstanding common stock shares
                at
                Date of Issue.

            
	 	 	 
	
              Detachable
                Equity Warrants to the 2010 Notes

            	 	
              Concurrent
                with the issue of the 2010 Notes, the Company shall grant to Merrill
                Lynch
                fully detachable warrants on Harbin common stock with maturity 3
                -years
                from Date of Issue (“Alternative Warrant Maturity Date”).

               

              The
                warrants will be exercisable at the option of the warrant holders
                beginning on the Date of Issue through the Alternative Warrant Maturity
                Date. 

               

              The
                per warrant strike price of the warrants shall be equal to the First
                Warrant Tranche Strike Price. Quantity of the warrants shall be calculated
                based upon 50.00% of the ML Amount (e.g., 50.00% of the ML Amount
                divided
                by the First Warrant Tranche Strike Price).

               

               

            

    

    
       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      Execution
        Version

    

     

    
      	 	 	
              For
                the life of the warrants, the First Warrant Tranche Strike Price
                shall be
                fully-adjusted following any and all share dilution events except
                for
                Permitted Issuances. Adjustment shall be 100% directly proportional
                to
                dilution on outstanding common stock shares at Date of Issue.
                

            
	 	 	 
	
              Equity
                Registration Rights

            	 	
              To
                provide that the underlying warrant shares will be fully tradeable,
                unrestricted and unlegended, the Issuer will file a shelf registration
                statement as soon as reasonably practicable after the Date of Issue,
                covering the resale of the warrant shares. The Issuer will agree
                to use
                its reasonable best efforts to cause the registration statement to
                be
                declared effective as soon as reasonably practical after the initial
                filing and to remain effective, subject to certain exceptions, during
                the
                life of warrants.

               

              If
                there is no effective registration statement within 150 days following
                the
                Date of Issue, the Company must pay a $250K liquidated damages amount
                within 7 days payable pro-rata to the then current holders of the
                warrants
                for each month until the registration statement becomes
                effective.

            
	 	 	 
	
              Ranking
                

            	 	
              The
                Notes shall rank as first priority, unsubordinated, senior secured
                obligations of indebtedness of the Issuer. The Notes will rank senior
                in
                right of payment to all existing and future indebtedness of the
                HoldCo.

            
	 	 	 
	
              Guaranty
                and Collateral 

            	 	
              The
                Guarantors will guarantee the Notes on a senior secured
                basis.

               

              The
                Notes and the guarantee by the Guarantors shall be secured by a pledge
                of
                (i) all share capital in the Guarantors and (ii) non-PRC loans by
                the
                Company or the Guarantors. 

               

              At
                any time during the life of the Notes, to the extent (i) PRC law
                may
                change or dictate a change to permit a creation of a lien or priority
                interest on the intellectual property and fixed assets of the Company
                and
                its subsidiaries without prior approval by the PRC authorities and
                (ii)
                such property and assets are not subject to collateral arrangements
                on the
                date of such change of PRC law, the Company will be under obligation
                to
                secure the Notes by a first priority lien and interest on the intellectual
                property and fixed assets of the Company or its subsidiaries, including
                the Company’s or its subsidiaries’ patents. To the extent the property and
                assets of the PRC operating company are subject to collateral arrangements
                with a third party on the date of such change of PRC law, the Company
                will
                be under obligation to secure the Notes by a second priority lien
                and
                interest on the intellectual property and fixed assets of the PRC
                operating company.

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

      Execution
        Version

    

    
      	 	 	 
	
              Board
                Representation

            	 	
              At
                the option of Citadel, Citadel can appoint up to 2 directors (“Directors”)
                to the Issuer’s Board of Directors during the full tenure of the Notes.
                The Directors who are appointed by Citadel must be required to resign
                upon
                repayment in full and whose tenure should not exceed the term of
                the
                Notes. Telephone conference will be a permissible way for a Director
                to
                attend a Board Meeting. Collectively, this is intended to create
                no delay
                in the Board voting process in the event of Board Meeting absence
                by any
                of the Directors appointed by Citadel. 

            
	 	 	 
	
              Change
                in Control

            	 	
              Optional
                redemption at holder's option upon a Change in Control payable in
                cash at
                a price equal to 102.5% of then outstanding Principal Amount thereof,
                plus
                accrued and unpaid interest, if any, to the date of redemption. The
                Company must notify the then Holders within 7 calendar days of learning
                of
                such Change in Control. 

               

              The
                life and terms of the Detachable Warrants shall not be affected upon
                Change in Control but for full adjustment to the strike price and
                reference common stock (of the Company or of the Acquiring
                Party).

            
	 	 	 
	
              Covenants

            	 	
              The
                indenture governing the Notes will contain customary covenants that,
                among
                other things, requires:

            

    

    
      
         

        
          	
                   

                	 	
                   ·

                	
                  Limitations
                    on the consolidated group’s ability to incur additional Indebtedness,
                    subject to exception for the PRC operating company to obtain
                    working
                    capital loans not to exceed $3 million;

                
	 	 	 	 
	 	 	
                  ·

                	
                  Maintain
                    minimum net worth; 

                
	 	 	 	 
	 	 	
                  ·

                	
                  Limitations
                    to declare dividends on its capital stock or purchase
                    or redeem capital stock;

                
	 	 	 	 
	 	 	
                  ·

                	
                  Limitations
                    to make investments or other specified restricted
                    payments on non-major businesses;

                
	 	 	 	 
	 	 	
                  ·

                	
                  Limitations
                    to guarantee indebtedness;

                
	 	 	 	 
	 	 	
                  
                    ·

                  

                	
                  Limitations
                    to enter into transactions with equity holders or
                    affiliates;

                
	 	 	 	 
	 	 	
                  
                    ·

                  

                	
                  Limitations
                    to change business;

                
	 	 	 	
                   

                
	 	 	
                  
                    ·

                  

                	
                  Limitations
                    to create any
                    lien;

                

        

         

      

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    Execution
      Version

    
       

      
        	
                 

              	 	
                 ·

              	
                Ensure
                  subsidiary dividends; 

              
	 	 	 	 
	 	 	
                ·

              	
                Limitations
                  to sell assets;

              
	 	 	 	 
	 	 	
                ·

              	
                Limitations
                  to effect a consolidation or merger;

              
	 	 	 	 
	 	 	
                ·

              	
                Limitations
                  on annual capital expenditures; and

              
	 	 	 	 
	 	 	
                ·

              	
                Maintenance
                  test of EBITDA to Interest Expense and Debt to
                  EBITDA.

              

      

       

    

    
      	 	 	
              Yang
                Tian Fu shall enter into an employment non-competition agreement
                for the
                life of the Notes.

               

              No
                cash or special dividends will be allowed for the life of the
                Notes.

               

              All
                future indebtedness at the HoldCo and the Guarantor level will be
                junior
                and subordinated in ranking and in right of payment to the
                Notes.

            

    

     

    
      	
              Certain
                Conditions

            	 	
               1)

            	
              Citadel
                agrees to participate in principal size no less than $38.0MM aggregate
                principal amount of the 2012 Notes and Merrill Lynch agrees to participate
                in principal size of no less than $12.0MM aggregate principal amount
                of
                the 2010 Notes.

            
	 	 	 	 
	 	 	
              2)

            	
              Full
                definitive legal documentation for funding and issuance of the
                Notes, including a Purchase Agreement and other related agreements
                (on the
                terms and conditions set forth in the Term Sheet) must be signed
                and
                executed (“Deal Closing”) by 14 August, 2006 unless extended by agreement
                of the Offerees and the Issuer, provided that in any event such extension
                shall not exceed 31 August 2006. The definitive legal documentation
                will
                contain customary representations and warranties, including
                representations by the Company that its SEC filings comply with SEC
                requirements and do not contain a material misstatement or material
                omission, and contain indemnification provisions covering breaches
                of such
                representations and warranties.

            
	 	 	 	 
	 	 	
              3)

            	
              Settlement
                and final funding to occur within five business days
                following the Date of Issue. 

            
	 	 	 	 
	 	 	
              4)

            	
              Any
                required Company approvals and third parties’
                consents/approvals will be sought, delivered, and effected no later
                than
                14 August, 2006 unless extended by the Offerees. 

            
	 	 	 	 
	 	 	
              5)

            	
              Offerees
                and Holders shall be granted full preemptive rights during the term
                of the
                Notes for all future share placements/sales and any equity-linked
                debt
                issues. 

            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

      Execution
        Version

       

      
        
          	
                   

                	 	
                  6)

                	
                  No
                    material change in share capital or shares outstanding from time
                    of
                    signature of the Final Term Sheet through the Date of Issue.
                    

                
	 	 	 	 
	 	 	
                  7)

                	
                  Other
                    customary and reasonable conditions including, but not limited
                    to,
                    satisfactory due diligence (“Due Diligence”), satisfactory legal
                    documentation, customary legal opinions (as discussed between
                    counsel for
                    each of the Company, the Placement Agent and Citadel), no material
                    adverse
                    change, etc.

                
	 	 	 	 
	 	 	
                  8)

                	
                  Merrill
                    Lynch International shall have received all necessary
                    internal approvals;

                
	 	 	 	 
	 	 	
                  9)

                	
                  The
                    Company agrees to facilitate timely execution of due diligence
                    investigation. Offerees intend to complete due diligence investigation
                    by
                    13 August, 2006. 

                
	 	 	 	 
	 	 	
                  10)

                	
                  The
                    Company agrees to disclose sufficient deal related information
                    within 1
                    calendar day of Deal Closing or, if later, the next business
                    day following
                    the clearance of the U.S. deal announcement of Harbin relating
                    to the
                    issue of the Notes.

                
	 	 	 	 
	 	 	
                  11)

                	
                  Within
                    120 days of Date of Issue, the Company agrees to use all
                    reasonable best efforts to appoint a new full-time qualified,
                    English-speaking and familiar with U.S. capital markets senior
                    financial
                    officer to the Company. Citadel will have the option to veto
                    any candidate
                    for the senior financial officer position, and Citadel’s written approval
                    is required for appointment. For every 120 days that pass from
                    date of the
                    issue in which the new senior financial officer position is not
                    filled,
                    Company will be liable to pay a $1.2MM liquidated damages amount
                    to the
                    Holders of the Notes (on a pro rata basis) within 5 business
                    days of the
                    passage of the respect 120-day period. Citadel agrees to use
                    its
                    reasonable best efforts to facilitate timely appointment of a
                    senior
                    financial officer according to these terms.

                
	 	 	 	 
	 	 	
                  12)

                	
                  Beginning
                    no later than Date of Issue and as soon as practicable,
                    the Company will begin the process of fully transitioning its
                    accountant
                    firm to one of the top fifteen internationally recognized accounting
                    firms
                    listed on Schedule
                    1
                    attached hereto (“Replacement Accounting Firm”). If by 1 March, 2007, the
                    Replacement Accounting Firm has not been appointed, Company will
                    be liable
                    to pay a $2.5MM liquidated damages amount to the Holders of the
                    Notes (on
                    a pro rata basis). Beginning on 1 January, 2007, for every full
                    fiscal
                    year that passes in which a top fifteen international accounting
                    firm is
                    not the primary accounting firm and auditor for the entire fiscal
                    year
                    during the term of the Notes, the Company shall be liable to
                    pay a $2.5MM
                    liquidated damages amount to the Holders of the Notes (on a pro
                    rata
                    basis) on 7 January of the subsequent year.
                    

                

        

         

      

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

      Execution
        Version

      
         

        
          
            	
                     

                  	 	
                    13)

                  	
                    During
                      the period beginning from signature of this document (“Final Term Sheet
                      Execution”) until funding of the Notes, the Company agrees not to pursue
                      or discuss any capital raising activities in excess of
                      $2.0MM.

                  
	 	 	 	 
	 	 	
                    14)

                  	
                    The
                      Company agrees to a right of refusal made available to the
                      Offerees for a
                      period of 6.0 months subsequent to date of the signing of this
                      Term Sheet
                      allowing the Offerees to legally refuse any capital raising
                      transactions
                      in excess of $2.0MM (“Right of Refusal”). The Offerees will release the
                      Company of its Right of Refusal at time of Deal Closing. In
                      the event of a
                      Company Break (as defined below), the Offerees’ Right of Refusal persists
                      in full. 

                  
	 	 	 	 
	 	 	
                    15)

                  	
                    Each
                      party will be responsible for its own costs and
                      expenses.

                  
	 	 	 	 
	 	 	
                    16)

                  	
                    Offerees
                      and the Company shall work together in good faith to
                      effectuate Deal Closing as soon as practicable.

                  
	 	 	 	 
	 	 	
                    17)

                  	
                    The
                      Company and its legal and investment banking advisors (collectively,
                      the
                      “Advisors”) shall make all reasonable best efforts to effect, produce,
                      and
                      comply with the above Conditions. Likewise, Offerees agree
                      to make all
                      reasonable best efforts to effect, produce, and fund Deal Closing.
                      

                  
	 	 	 	 
	 	 	
                    18)

                  	
                    Under
                      all conditions, any Company Break (as defined below) or
                      breach by the Company of its obligations under this Term Sheet
                      shall
                      result in the Company being liable to pay a cash break-up fee
                      (“Company
                      Break-up Fee”) equal to 7.5% of the Principal Amount, payable to Offerees
                      (on a pro rata basis) within 7 days of the date of Company
                      Break or
                      breach. “Company Break” shall be defined as any action, event or decision
                      of the Company that prevents any of the Company’s obligations or
                      agreements contained in this Term Sheet from being performed
                      or
                      consummated. 

                  

          

           

        

      

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

      Execution
        Version

      
        
           

          
            
              	
                       

                    	 	
                      19)

                    	
                      Likewise,
                        any Offeree Break (as defined below) or breach by an Offeree
                        of its
                        obligations under this Term Sheet shall result in such Offeree
                        being
                        liable to pay a cash break-up free (“Offeree Break-up Fee”) equal to the
                        product of (i) 7.5% of Principal Amount multiplied by (ii)
                        such Offeree’s
                        pro rata investment portion of the Principal Amount, payable
                        to the
                        Company within 7 days of the Offeree Break or breach. “Offeree Break”
                        shall be defined as any action, event or decision of an Offeree
                        that
                        prevents any of such Offeree’s obligations or agreements contained in this
                        Term Sheet from being performed or consummated; it being
                        understood that
                        the Offerees’ obligations hereunder are several and not joint; provided,
                        however, that notwithstanding the foregoing or anything to
                        the contrary
                        contained elsewhere herein, an allowable exception to the
                        Offeree Break
                        shall be permitted based upon (i) Offeree’s discovery during its due
                        diligence investigation of any material information of the
                        Company not
                        previously disclosed to the Offeree by the Company prior
                        to the date of
                        this Term Sheet, (ii) any reasonably material discrepancy
                        found during the
                        Offeree’s due diligence investigation, or (iii)
                        any material misstatement or omission by the Company in its
                        audited
                        financial statements or SEC reports (each an “Allowable Exception” and
                        collectively, the “Allowable Exceptions”). Under any Allowable Exception,
                        the Offerees will not be liable for any Offeree Break-up
                        Fee.

                    
	 	 	 	 
	 	 	
                      20)

                    	
                      Under
                        any Company Break or breach, the Company will still be bound
                        by the
                        agreements set forth in paragraphs #14, 15, and 18 of “Certain Conditions”
                        above. 

                    
	 	 	 	 
	 	 	
                      21)

                    	
                      Prior
                        to making any public disclosures or filings as may be
                        required by law with respect to the transactions contemplated
                        herein, the
                        Company shall provide the Offerees (and its counsel) with
                        a reasonable
                        opportunity to review and comment on such public disclosure
                        documents and
                        consider in good faith any comments received by Offerees
                        (or its
                        counsel).

                    
	 	 	 	 
	 	 	
                      22)

                    	
                      Under
                        all conditions, any change in the trading price of the shares
                        of the Company’s common stock (“Change in Trading Price of Shares”) shall
                        not be allowed as an exception to any of the above commitments
                        and
                        Conditions. The Company and the Offerees commit in full good
                        faith
                        execution of this Term Sheet in the timeline set forth in
                        the conditions
                        above regardless of Change in Trading Price of Shares.
                        

                    

            

             

          

        

      

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

      Execution
        Version

      
        
           

          
            
              	
                       

                    	 	
                      23)

                    	
                      Except
                        as otherwise provided herein, neither party may assign its
                        rights
                        hereunder to any other party without the prior written consent
                        of the
                        other party.

                    
	 	 	 	 
	 	 	
                      24)

                    	
                      This
                        Term Sheet shall be legally binding on the Company and the
                        Offerees.
                        

                    
	 	 	 	 
	 	 	
                      25)

                    	
                      This
                        Term Sheet (and the definitive legal documents) shall be
                        governed and construed by the laws of New York. The parties
                        submit to the
                        non-exclusive jurisdiction of the U.S. federal or New York
                        state
                        court.

                    

            

             

          

        

      

    

    
      	
              Expiration 

            	 	
              This
                Term Sheet expires at 11:59 pm (California time) on August 2, 2006
                if not
                accepted by the Company by that
                date.

            

    

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    Execution
      Version

    
    

    
      Please
        confirm, by executing a copy of this Term Sheet, that you agree to the
        foregoing.

      

      Signed
        and Agreed:
        /s/
        Tianfu
        Yang                                   
    

      Harbin
        Electric, Inc.

      By:
        Tianfu Yang, Chairman &
CEO                                      
  

      duly
        authorised for and on behalf of Harbin Electric, Inc.

      

      Dated:  
        August 2,
        2006                                                         

      

      Signed
        and Agreed:
        /s/
        Andrew
        Fong                                
   

      Citadel
        Equity Fund Ltd.

      By:
        Citadel Limited Partnership, its Portfolio Manager

      By:
        Citadel Investment Group, L.L.C., its General Partner

      By:
        Andrew Fong, Authorized Signatory

      

      Dated:
        August 2,
        2006                                                            

      

      Signed
        and Agreed:
        /s/
        Kevin
        Tham                                     
 

      By:___________________________________________    

      Merrill
        Lynch International 

      By:
        Kevin
        Tham, Director - Credit Trading, Debt Markets

      

      Dated:
        August 2,
        2006                                                             

    

           

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    Execution
      Version

     

    Schedule
      1

    

    List
      of Top 15 Accounting Firms

    
      
        	
                1.

              	
                PricewaterhouseCoopers

              
	
                2.

              	
                Deloitte
                  Touche Tohmatsu

              
	
                3.

              	
                Ernst
                  & Young

              
	
                4.

              	
                KPMG

              
	
                5.

              	
                BDO
                  International

              
	
                6.

              	
                Grant
                  Thornton International

              
	
                7.

              	
                RSM
                  International

              
	
                8.

              	
                Baker
                  Tilly International

              
	
                9.

              	
                Horwath
                  International

              
	
                10.

              	
                Moores
                  Rowland International

              
	
                11.

              	
                Nexia
                  International

              
	
                12.

              	
                PKF
                  International

              
	
                13.

              	
                Moore
                  Stephens International

              
	
                14.

              	
                HLB
                  International

              
	
                15.

              	
                Kreston
                  InternationalExhibit
      10.1

     

    FIFTH
      AMENDMENT TO

    LOAN
      AND SECURITY AGREEMENT

     

    This
      FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”),
      dated
      August 2, 2006, by and among LASALLE BUSINESS CREDIT, LLC, a Delaware limited
      liability company (“LaSalle”),
      with
      its principal office at 135 South LaSalle Street, Chicago, Illinois 60603,
      the
      financial institutions that, from time to time, become a party to the Loan
      Agreement (hereinafter defined) (such financial institutions, collectively,
      the
“Lenders”
and
      each individually, a “Lender”),
      LaSalle as agent for the Lenders (in such capacity, the “Agent”),
      and
      IMPCO TECHNOLOGIES, INC., a Delaware corporation, with its principal office
      at
      3030 South Susan Street, Santa Ana, California 92704 (the “Borrower”).

     

    WHEREAS,
      the Borrower and LaSalle as a Lender and the Agent, are parties to a Loan and
      Security Agreement dated as of July 18, 2003 (as amended, restated,
      supplemented, or otherwise modified from time to time, the “Loan
      Agreement”),
      pursuant to which the Lenders have agreed, upon satisfaction of certain
      conditions, to make Revolving Advances and other financial accommodations to
      the
      Borrower in the aggregate principal amount not to exceed
      $9,000,000;

     

    WHEREAS,
      the Borrower desires to reorganize the corporate structure of the Borrower
      into
      a holding company structure, pursuant to which (i) the Borrower will form a
      wholly-owned subsidiary to be known as “FUEL SYSTEMS SOLUTIONS, INC.,” a
      Delaware corporation (“Fuel
      Systems”),
      to be
      the sole parent of the Borrower immediately following such reorganization,
      (ii)
      the Borrower will be merged with and into IMPCO Merger Sub, Inc., a Delaware
      corporation to be formed by Fuel Systems for the sole purpose of effecting
      such
      reorganization (“Merger
      Sub”),
      with
      the Borrower remaining as the surviving entity to be governed by the Certificate
      of Incorporation and Bylaws of Merger Sub, substantially as in effect
      immediately prior to such reorganization, pursuant to an agreement and plan
      of
      reorganization, and (iii) the stockholders of the Borrower will exchange all
      of
      their shares of the Borrower for shares of Fuel Systems on a one-for-two
      exchange basis upon the effective time of such reorganization (the transactions
      contemplated by this clause, collectively, the “Reorganization”);

    
       

      WHEREAS,
        as part of the formation of Fuel Systems and prior to the Reorganization,
        the
        Borrower shall contribute all of its interest and rights in and to the issued
        and outstanding common stock of BRC, S.r.l., an Italian limited liability
        company and a wholly-owned subsidiary of the Borrower (“BRC”),
        to
        and for the benefit of Fuel Systems (the “Contribution”),
        such
        that BRC will become a wholly-owned subsidiary of Fuel Systems;

       

      WHEREAS,
        the Reorganization will not be effective until such time and date as a
        Certificate of Merger is filed with the Delaware Secretary of State (the
        “Effective
        Time”);
        

       

      WHEREAS,
        the Borrower has advised the Lenders and the Agent that it is not in compliance
        with the Loan Agreement (hereinafter “Financial
        Covenant Non-Compliance”):
        due
        to a failure to achieve the U.S. Minimum Pre-Tax Income as otherwise required
        in
Paragraph
        14(x)(v)
        for the
        fiscal quarter ending June 30, 2006; and

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      WHEREAS,
        the Borrower has requested that the Lenders and the Agent agree to permitting
        the Borrower to effect the Reorganization and the Contribution, to waive
        the
        Financial Covenant Non-Compliance and for certain other agreements and consents
        in connection therewith, all as particularly set forth on the terms and
        conditions below.

       

      All
        capitalized terms used but not otherwise defined herein shall have the
        respective meanings ascribed to such terms in the Loan Agreement unless the
        context requires otherwise.

       

      NOW
        THEREFORE, the parties hereto agree as follows:

       

      1.  Section
        13(s)
        of the
        Loan Agreement is hereby amended to permit the Reorganization and the
        Contribution, whereby, among the other transactions contemplated above, Fuel
        Systems shall become the owner of 100% of the issued and outstanding stock
        of
        each of the Borrower and BRC, and Schedule 13(s) to the Loan Agreement is
        hereby amended, effective upon the Effective Time, to reflect that Fuel Systems
        will be the Parent of the Borrower following the Effective Time of the
        Reorganization.

       

      2.  Section
        14(i) of the Loan Agreement is hereby amended to permit the Reorganization
        and the Contribution, whereby, among the other transactions contemplated
        above,
        Fuel Systems shall become the owner of 100% of the issued and outstanding
        stock
        of each of the Borrower and BRC.

       

      3.  Section
        14(l) of the Loan Agreement is hereby amended to permit the organizational
        documents of the Borrower to be the same as the organizational documents
        of
        Merger Sub immediately prior to the Reorganization, except that Article First
        of
        the Certificate of Incorporation of Merger Sub shall be amended to read “Article
        First: The name of the corporation is IMPCO Technologies, Inc.”

       

      4.  Section
        14(m) of the Loan Agreement, which otherwise prohibits any transactions with
        its Affiliates except in the ordinary course of business, is hereby amended
        to
        permit the Reorganization, including the transfer of the Borrower’s issued and
        outstanding stock to Fuel Systems, the merger of the Borrower with and into
        Merger Sub and the execution of an agreement and plan of reorganization in
        furtherance thereof, and the Contribution.

       

      5.  Section
        14(v) of the Loan Agreement is hereby amended and restated to read in its
        entirety as follows, to be effective upon the Effective Time:

       

      “The
        Borrower’s common stock shall at all times be owned by Fuel Systems and the
        common stock of Fuel Systems shall at all times be listed on the NASDAQ Global
        Market.”

      

      6.  No
        Change of Control.
        Neither
        the Reorganization nor the Contribution, individually or in the aggregate,
        shall
        be deemed a Change of Control, a Default and/or an Event of Default under
        the
        Loan Agreement or the Other Agreements.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      7.  Limited
        Waiver and Reset of Covenant.

       

      (a)  Effective
        as of the Effective Date, the Lenders and the Agent hereby waive the Financial
        Covenant Non-Compliance.

       

      (b)  The
        waiver granted herein is a one-time waiver, given solely for the specific
        covenants and specific time periods set forth herein. Nothing contained in
        this
        Amendment constitutes a waiver by the Lenders or the Agent of any other term
        or
        provision of the Loan Agreement or the Other Agreements, whether or not the
        Lenders or the Agent have any knowledge thereof, nor may anything contained
        in
        this Amendment be deemed a waiver by the Lenders or the Agent of any
        non-compliance with the terms or provisions of the Loan Agreement or the
        Other
        Agreements that may occur after the date of this Amendment. 

       

      (c)  Paragraph
        14(x)(v)
        of the
        Loan Agreement is hereby amended and restated in its entirety to read as
        follows:

       

      “(v) U.S.
        Minimum Pre-Tax Income.
        Borrower shall maintain and cause the U.S. Consolidated Group to maintain,
        as of
        the end of each fiscal period set forth below, Pre-Tax Income of not less
        than
        the respective amount set forth below opposite each such fiscal
        period: 

      

        
          	
                  Fiscal
                    Period

                	 	
                  Minimum
                    Pre-Tax Income

                	 
	 	 	 	 
	
                  Four
                    consecutive fiscal quarters ending at end of FQ2 2006

                	 	 	
                  ($2,794,000

                	
                  )

                
	 	 	 	 	 
	
                  Four
                    consecutive fiscal quarters ending at end of FQ3 2006

                	 	 	
                  ($3,497,000

                	
                  )

                
	 	 	 	 	 
	
                  Four
                    consecutive fiscal quarters

                  ending
                    at end of FQ4 2006

                	 	 	
                  ($1,437,000

                	
                  )

                

        

      

       

      
        The
          Minimum Pre-Tax Income Covenant for the fiscal quarters after the end of
          the FQ4
          2006 fiscal quarter will be set by Agent in this discretion, reasonably
          exercised, on written notice by Agent to Borrower, based on Borrower's
          2007
          Projections which is otherwise required to be delivered to Agent in 2006
          pursuant to Section 11(f) of the Loan Agreement. So
          long
          as no Event of Default has occurred and is continuing and Borrower’s average
          Excess Availability is $2,500,000 or greater during a fiscal quarter, neither
          the Minimum Pre-Tax Income nor the U.S. Consolidated Group minimum Tangible
          Net
          Worth (Section 14(x)(i) of the Loan Agreement) covenants will be measured
          for
          that fiscal quarter. 

         

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

      

      

      8.  Borrowing
        Base Certificate.
        Subject
        to the conditions in the immediately following sentence, Section 11(a) of
        the
        Loan Agreement is hereby modified to change the frequency of delivery to
        Agent
        of the Borrowing Base Certificate from Tuesday of each week, calculated as
        of
        the last day of the immediately preceding Week to no later than the fifteenth
        day of each calendar month calculated as of the last day of the immediately
        preceding calendar month. The foregoing change in the frequency of delivery
        of
        the Borrowing Base Certificate shall only be effective so long as no Event
        of
        Default has occurred and is continuing and, for the then immediately preceding
        calendar month, (a) Borrower’s average Excess Availability was $2,500,000 or
        greater and (b) Borrower’s Excess Availability was not less than $2,500,000
        during five or more consecutive Business Days.

       

      9.  Loan
        Agreement Remains Effective. The amendments herein relate specifically to
        the terms herein, are limited to the specific facts set forth above and are
        not
        an amendment of, or consent to a violation of, any other term, condition
        or
        obligation of the Loan Agreement. Except as specifically amended by the terms
        herein, the Loan Agreement remains in full force and effect.

       

      10.  Amendment
        Fee. In consideration for the accommodations granted by the Agent and the
        Lenders herein and in addition to all other fees and costs, the Borrower
        hereby
        agrees to pay to the Agent a nonrefundable fee equal to Five Thousand Dollars
        ($5,000), which fee will be fully earned, due, and payable as of the date
        of
        this Amendment (the “Amendment
        Fee”).

       

      11.  Conditions
        to Effectiveness of Amendment and Waiver. The effectiveness of the
        amendments, consent, and waiver contained in this Amendment, is subject to
        the
        fulfillment (to the satisfaction of the Agent and the Lenders) of the following
        conditions precedent (the date upon which conditions are satisfied to the
        satisfaction of the Agent and the Lenders, the “Effective
        Date”):

       

      (a)  Each
        of
        the Borrower and the Agent has executed this Amendment and the same has been
        delivered to the Agent;

       

      (b)  The
        Borrower has executed and delivered to the Agent all agreements, instruments,
        and documents reasonably requested by the Agent in connection with this
        Amendment.

       

      (c)  The
        Borrower has paid the Amendment Fee to the Agent.

       

      12.  Acknowledgments
        and Confirmations.
        The
        Borrower, the Lenders, and the Agent hereby acknowledge and confirm that
        as of
        the date hereof: (i) all references in the Loan Agreement to “this Agreement”
will be deemed to refer to the Loan Agreement, as amended by this Amendment;
        and
        (ii) all references in each of the Other Agreements to the “Loan Agreement” will
        be deemed to refer to the Loan Agreement, as amended by this
        Amendment.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      13.  Representations
        and Warranties. The Borrower hereby represents and warrants to the Lenders
        and the Agent, that:

       

      (a)  Each
        of
        the representations and warranties set forth in Paragraph
        13
        of the
        Loan Agreement is true in all material respects as of the date hereof, except
        for changes in the ordinary course of business, that, either singly or in
        the
        aggregate, are not materially adverse to the business or financial condition
        of
        the Borrower or to the Collateral.

       

      (b)  As
        of the
        date hereof, after giving effect to the terms of this Amendment, there exists
        no
        Default or Event of Default.

       

      (c)  The
        Borrower has the power to execute, deliver, and perform this Amendment and
        all
        agreements, instruments, and documents executed in connection herewith (this
        Amendment and such other agreements, instruments, are documents are sometimes
        hereinafter referred to collectively as the “Amendment
        Documents”).
        The
        Borrower has taken all necessary action to authorize the execution, delivery,
        and performance of this Amendment and the other Amendment Documents. No consent
        or approval of any entity or Person (including without limitation, any
        shareholder of the Borrower), no consent or approval of any landlord or
        mortgagee, no waiver of any Lien or right of distraint or other similar right,
        and no consent, license, approval, authorization, or declaration of any
        governmental authority, bureau, or agency is required in connection with
        the
        execution, delivery, or performance by the Borrower, or the validity or
        enforcement, of this Amendment or the other Amendment Documents.

       

      (d)  The
        execution and delivery by the Borrower of this Amendment and the other Amendment
        Documents and performance by it hereunder and thereunder, will not violate
        any
        provision of law and will not conflict with or result in a breach of any
        order,
        writ, injunction, ordinance, resolution, decree, or other similar document
        or
        instrument of any court or governmental authority, bureau, or agency, domestic
        or foreign, or the certificate of incorporation or by-laws of the Borrower,
        or
        create (with or without the giving of notice or lapse of time, or both) a
        default under or breach of any agreement, bond, note, or indenture to which
        the
        Borrower is a party, or by which it is bound or any of its properties or
        assets
        is affected (including without limitation, the Subordinated Debt Documents),
        or
        result in the imposition of any Lien of any nature whatsoever upon any of
        the
        properties or assets owned by or used in connection with the business of
        the
        Borrower, other than the Liens contemplated by this Amendment.

       

      (e)  This
        Amendment and the other Amendment Documents have been duly executed and
        delivered by the Borrower and constitute the valid and legally binding
        obligation of the Borrower, enforceable in accordance with their respective
        terms.

       

      14.  Effectiveness
        of Amendment and Waiver.
        The
        amendments, consent, and waiver contained in this Amendment shall be effective
        as of the date hereof, subject to the fulfillment (to the satisfaction of
        the
        Agent and the Lenders) of all legal matters incident to this Amendment
        reasonably satisfactory to the Lenders, the Agent, and their
        counsel.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      15.  Covenants
        of the Borrower. Following the Effective Time of the Reorganization, the
        Borrower agrees and covenants as follows (to the satisfaction of the Agent
        and
        the Lenders):

       

      (a)  The
        Borrower will execute and deliver to the Agent all agreements, instruments,
        and
        documents reasonably requested by the Agent in connection with this
        Amendment.

       

      (b)  The
        Borrower will deliver to the Agent evidence that Fuel Systems is the owner
        of
        100% of the capital stock of the Borrower and that Fuel Systems’ stock is listed
        on NASDAQ.

       

      16.  Further
        Assurances.
        The
        Borrower agrees that it will, from time to time, execute and/or deliver all
        agreements, instruments, and documents and do and perform all actions and
        things
        (all at the Borrower’s sole expense) as the Agent may reasonably request to
        carry out the intent and terms of this Amendment.

       

      17.  Miscellaneous.

       

      (a)  The
        Borrower’s breach of any of its covenants contained in this Amendment will
        constitute an Event of Default.

       

      (b)  Nothing
        contained in this Amendment imposes an obligation on the Lenders or the Agent
        to
        further amend the Loan Agreement or waive compliance with any other
        provision.

       

      (c)  Except
        as
        set forth in this Amendment, none of the Lenders nor the Agent waive any
        breach
        of, or Default or Event of Default under, the Loan Agreement, nor any right
        or
        remedy the Lenders or the Agent may have under the Loan Agreements, the Other
        Agreements, or applicable law, all of which rights and remedies are expressly
        reserved.

       

      (d)  Except
        as
        specifically amended in this Amendment, the Loan Agreement and the Other
        Agreements remain in full force and effect in accordance with their respective
        terms.

       

      (e)  No
        modification or waiver of or with respect to any provision of this Amendment
        and
        all other agreements, instruments, and documents delivered pursuant hereto
        or
        referred to herein, nor consent to any departure by any party hereto or thereto
        from any of the terms or conditions hereof or thereof, will in any event
        be
        effective, unless it is in writing and signed by each party hereto, and then
        such waiver or consent will be effective only in the specific instance and
        for
        the purpose for which given.

       

      (f)  This
        Amendment, together with all of the other agreements, instruments, and documents
        referred to herein, embodies the entire agreement and understanding among
        the
        parties hereto with respect to the subject matter hereof and thereof and
        supersedes all prior agreements and understandings relating to the subject
        matter hereof.

       

      (g)  Without
        in any way limiting Paragraph
        14(r)
        of the
        Loan Agreement, the Borrower shall pay all of the Lenders’ and the Agent’s fees,
        costs, and expenses incurred in connection with this Amendment and the
        transactions contemplated hereby, including without limitation, the Lenders’ and
        the Agent’s legal fees and expenses incurred in connection with the preparation,
        negotiation, consummation, and, if required, the enforcement, of this Amendment
        and the other Amendment Documents.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      (h)  This
        Amendment may be signed in any number of counterparts with the same effect
        as if
        the signatures thereto and hereto were upon the same instrument.

       

      (i)  EACH
        OF
        THE PARTIES TO THIS AMENDMENT HEREBY WAIVE ALL RIGHTS TO TRIAL BY JURY IN
        ANY
        ACTION OR PROCEEDING THAT PERTAINS DIRECTLY OR INDIRECTLY TO THIS AMENDMENT,
        ANY
        OF THE OTHER AGREEMENTS, THE LIABILITIES, THE COLLATERAL, ANY ALLEGED TORTIOUS
        CONDUCT OF THE BORROWER, THE AGENT, OR THE LENDERS OR THAT, IN ANY WAY, DIRECTLY
        OR INDIRECTLY, ARISES OUT OF OR RELATES TO THE RELATIONSHIP AMONG THE BORROWER,
        THE AGENT, AND/OR THE LENDERS. IN NO EVENT WILL THE AGENT OR ANY LENDER BE
        LIABLE FOR LOST PROFITS OR OTHER SPECIAL OR CONSEQUENTIAL DAMAGES.

       

      (j)  This
        Amendment is governed by and must be construed in accordance with the applicable
        law pertaining in the State of New York, other than those conflict of law
        provisions that would defer to the substantive laws of another
        jurisdiction.

       

      (k) The
        parties to this Amendment prefer that any dispute between or among them be
        resolved in litigation subject to a jury trial waiver as set forth above.
        If a
        pre-dispute jury trial waiver of the type provided for above is unenforceable
        in
        litigation to resolve any dispute, claim, cause of action or controversy
        under
        this Amendment, the Loan Agreement or any of the Other Agreements (each,
        a
“Claim”)
        in the
        venue where the Claim is being brought pursuant to the terms of this Amendment,
        then, upon the written request of any party, such Claim, including any and
        all
        questions of law or fact relating thereto, shall be determined exclusively
        by a
        judicial reference proceeding. Except as otherwise provided in this Section
        17
        above, venue for any such reference proceeding shall be in the state or federal
        court in the County or District where venue is appropriate under applicable
        law
        (the “Court”).
        The
        parties shall select a single neutral referee, who shall be a retired state
        or
        federal judge. If the parties cannot agree upon a referee within 15 days,
        the
        Court shall appoint the referee. The referee shall report a statement of
        decision to the Court. Notwithstanding the foregoing, nothing in this paragraph
        shall limit the right of Agent or Lenders to exercise self-help remedies,
        foreclose against collateral or obtain provisional remedies (including without
        limitation, requests for temporary restraining orders, preliminary injunctions,
        writs of possession, writs of attachment, appointment of a receiver, or any
        orders that a court may issue to preserve the status quo, to prevent irreparable
        injury or to allow a party to enforce its liens and security interests).
        The
        parties shall bear the fees and expenses of the referee equally unless the
        referee orders otherwise. The referee also shall determine all issues relating
        to the applicability, interpretation, and enforceability of this Section
        17(k).
        The parties acknowledge that any Claim determined by reference pursuant to
        this
        Section 17(k) shall not be adjudicated by a jury.

       

      [Remainder
        of Page Intentionally Left Blank]

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      

      IN
        WITNESS WHEREOF,
        the
        parties hereto have duly executed this Amendment as of the date first above
        set
        forth.

      
        	 	 	 
	 	
                LASALLE
                  BUSINESS CREDIT, LLC, 

                as
                  a
                  Lender and as Agent

              
	 
 	 
 	 
 
	 	By:  	/s/ Darren
                Hirata
	 	Name:  	
                
Darren
                Hirata
	 	Title:	Vice
                President

      

       

      
        	 	 	 
	 	
                IMPCO
                  TECHNOLOGIES, INC.,

                as Borrower

              
	 
 	 
 	 
 
	 	By:  	/s/ Thomas
                M.
                Costales
	 	Name:  	
                
Thomas
                M. Costales
	 	Title:	Chief
                Financial Officer

      

       

       

      
        
          
          

        

        
          8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00107-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00107-of-00352.parquet"}]]