Document:

DC7141.pdf -- Converted by SEC Publisher 4.2, created by BCL Technologies Inc., for SEC Filing

	
July 10, 2009

	
Fuel Systems Solutions, Inc.

3030 South Susan Street

Santa Ana, CA 92704

Re: Fuel Systems Solutions, Inc. - Committed Credit Facility

     We are pleased to advise you that Intesa Sanpaolo S.p.A., New York Branch, acting through its New York Branch at One William Street, New York, NY (the "Bank"), has approved the following credit
facility for Fuel Systems Solutions, Inc. located at 3030 South Susan Street, Santa Ana, CA 92704 (the "Parent Borrower") and its wholly-owned subsidiary, Impco Technologies Inc., also located at 3030 South Susan Street, Santa Ana, CA 92704 (the
“Co-Borrower”, and together with the Parent Borrower, each a “Borrower” and, collectively, the “Borrowers”): a committed unsecured line of credit available for borrowings for durations of up to six  months for general
corporate purposes (the “Facility”).

     The Bank's commitment to extend the Facility, which shall be deemed effective as of the Effective Date (as defined below), is specifically subject to the terms and conditions as stated herein
(the "Agreement") and shall terminate on the Maturity Date (as defined below).  This Agreement, together with each Note (as defined below), and any and all other agreements, instruments and documents related to any of the foregoing, are collectively
referred to herein as the "Facility Documents". This Agreement replaces that certain facility letter entered into by and between the Parent Borrower, the Co-Borrower and the Bank and dated as of December 17th, 2008 (the “Existing Facility”) and together with any promissory notes and collateral documents related thereto (the “Existing Facility Documents”). 

     1. Facility and Loans.   The aggregate principal amount of the Loans (as defined below) made in respect of such Facility shall
not at any time exceed U.S. $13,000,000.00 (Thirteen Million United States Dollars) (the “Committed Amount”; provided that such amount may be reduced from time to
time in accordance with Section 4 herein).  Each Loan made hereunder shall be in a minimum amount of $500,000 (Five Hundred Thousand United States Dollars).

     The Facility may be used only for the purposes specified in the description of such Facility above. The Facility will be a revolving credit facility, and the Borrowers may borrow, repay and
re-borrow or reutilize amounts during the continuation of the Facility and prior to the Maturity Date (as defined below), subject to the applicable provisions of this Agreement, provided that at no time may the aggregate outstanding principal amount
outstanding hereunder exceed the Committed Amount.

     Under the Facility the Bank will make Loans (as defined below) available to the Borrowers prior to the Maturity Date subject to the applicable provisions of this Agreement and each Note (as
defined below). Loans will bear interest in accordance with Section 2 hereinbelow.

     The Facility may be made available to the Borrowers and subject to the terms and conditions as contained herein until the earlier of (i) April 30, 2014 (the “Stated Maturity Date”) or
(ii) the date on which any Loans made hereunder are terminated in accordance with the provisions hereof (the "Maturity Date"). Each extension of credit made under the Facility (each a “Loan” and, collectively the “Loans”)" made
hereunder shall have a stated maturity not extending beyond the Stated Maturity Date. (Any Loan made hereunder may also be referred to as a “Loan” or, collectively, the “Loans”).

     When a Borrower desires to utilize the Facility, a duly authorized officer or representative of such Borrower shall advise the Bank in writing by the execution of a Notice of Borrowing in the
form of Exhibit A attached hereto. Each request for a Loan in respect of the Facility shall specify the following information: (i) the Facility and the date of the proposed Loan, (ii) the amount of the proposed Loan, which shall be in United States
Dollars, (iii) the stated maturity of the proposed Loan, (iv) the interest rate option applicable to the Loan (i.e., LIBOR Rate, Cost of Funds Rate, or Prime Rate) and if a LIBOR Loan, the LIBOR Interest Period, and (v) the bank account of the
Borrower to which the proceeds of such Loan should be paid.  In such case, once all of the conditions precedent set forth in Section 8 (in the case of the initial Loan hereunder) and Section 9 have been satisfied, the Bank will credit to the
specified bank account of the Borrower the amount of the Loan as requested by such Borrower (subject to the limitation of the Committed Amount).

     2. Interest on Loans. Each Loan under the Facility will have the following interest rate and maturity date options (subject to
the other provisions hereof) at the Borrower’s option and request:

(a) LIBOR Rate: Loans bearing interest at the LIBOR Rate (as defined below) from time to time may be made upon notification received by the Bank by 11:00 a.m., New York time, three Business Days prior to the date of borrowing
for fixed periods of 1, 2, 3, or six (one, two, three or six) months or any other period agreed by the Bank (each a “LIBOR Interest Period”); provided
that no Loan shall extend beyond the then applicable Stated Maturity Date.”).  Principal will be paid at the maturity of each Loan (but in no event later than the Maturity Date) in immediately available funds.
 Accrued interest shall be paid in immediately available funds and shall be calculated on the basis of the actual calendar days elapsed and a 360 day year and shall be due at the end of each LIBOR Interest Period, provided that (i) if any LIBOR
Interest Period would end on a day other than a Business Day, such LIBOR Interest Period shall end on the next succeeding Business Day, unless

such next succeeding Business Day would fall in the next calendar month, in which case such LIBOR Interest Period shall end on the next preceding Business Day and (ii) any LIBOR Interest Period that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such LIBOR Interest Period) shall end on the last Business Day of the last calendar month of such LIBOR Interest Period,
but in no event after the Stated Maturity Date.  The “LIBOR Rate” shall mean, with respect to an Interest Period (i) the rate for deposits in United States Dollars, for a
period approximately equal to such Interest Period which appears on Reuters BBA Libor Rates Page 3750, or other service providing a rate titled, “British Bankers’ Association Rates”, as of 11:00a.m., London time, on the day which is
two (2) Business Days prior to the commencement of such Interest Period plus (ii) 200 basis points 2.00%), subject to the conditions set forth in the second paragraph following subsection (c) of this Section 2

(b) Cost of Funds Rate:  Short-Term Loans bearing interest at the Costs of Funds Rate (as defined below) from time to time may be made upon notification received by the Bank by 2:30p.m, New York time, on the date of borrowing
for periods of the Borrower's option (each a “Cost of Funds Interest Period”), provided that no Loan shall extend beyond the then applicable Stated Maturity Date.”).  Principal will be paid at the maturity of each Loan (but in no
event later than the Maturity Date) in immediately available funds.  Accrued interest shall be paid in immediately available funds and shall be calculated on the basis of the actual calendar days elapsed and a 360 day year and shall be due at the
end of each Cost of Funds Interest Period, provided that (i) if any Cost of Funds Interest Period would end on a day other than a Business Day, such Cost of Funds Interest Period shall end on the next succeeding Business Day, unless such next
succeeding Business Day would fall in the next calendar month, in which case such Cost of Funds Interest Period shall end on the next preceding Business Day and (ii) any Cost of Funds Interest Period that commences on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Cost of Funds Interest Period) shall end on the last Business Day of the last calendar month of such Cost of Funds Interest Period,
but in no event after the Stated Maturity Date. The "Cost of Funds Rate" shall be (i) the rate per annum as determined by the Bank in good faith to represent its cost of funds in New York (on the date of the Borrower’s request) in the interbank
Eurodollar market plus (ii) 200 basis points (2.00%)

(c) Prime Rate:  Loans bearing interest at the Prime Rate (as defined below) from time to time may be made upon notification received by the Bank by 2:30p.m, New York time, on the date of borrowing for

periods of up to three (3) months (each a “Interest Period”). Principal will be paid at the maturity of each Loan (but in no event later than the Maturity Date) in immediately available funds. Accrued interest shall
be paid in immediately available funds and shall be calculated on the basis of the actual calendar days elapsed and a 360 day year and shall be due at the end of each Interest Period. The “Prime Rate” shall be the sum of (i) the prime
variable base rate of interest quoted (but not necessarily received) by the Bank to responsible and substantial corporate customers of the Bank as from time to time plus (ii) 100 basis points (1.00%).

(This is a floating rate so the interest on each Loan bearing interest at the Prime Rate will change as of 12:01 a.m. on the date of the corresponding variation in such rate but in no event shall such rate be higher than the
maximum permitted under New York law.) 

     To the extent that an interest rate with respect to any Loan is based upon a publication or announcement and on a particular day such publication is not available or such announcement is not
made, the applicable rate of interest for such day with respect to such Loan shall be calculated by reference to the rate of interest so published or announced on the immediately preceding day such rate was so published or announced. 

     If, for any reason, the LIBOR Rate for any Loan will not adequately reflect the cost to the Bank of making, funding or maintaining the Loan for any LIBOR Interest Period the Bank will (i) for
existing Loans: notify the Borrower, whereupon such Loan will automatically, on the last day of the then existing LIBOR Interest Period therefore, convert into a Loan bearing interest at the Cost of Funds Rate, and (ii) for new Loans: inform the
Borrower that the LIBOR Rate is not available. If the Borrower shall fail to select an interest rate option, Loans shall bear interest at the Cost of Funds Rate in effect from time to time.

     Interest on each Loan shall accrue daily at the applicable rate of interest from and including the date such Loan is made to such Borrower but excluding the date such Loan is paid in full and
shall be payable in arrears at the maturity of such Loan, unless otherwise agreed with respect to such Loan by the parties hereto.

     Any amounts that have become due and payable in accordance with this Agreement, any Facility Document or otherwise (whether at stated maturity, by acceleration or otherwise) and remain unpaid by
a Borrower shall accrue interest thereafter until payment in full of such amounts (both before and after judgment) at an interest rate per annum equal to 2% above the Prime Rate, and such interest shall be calculated on the basis of the actual
calendar days elapsed in a 360 day year and shall be payable upon the Bank's demand therefore. Notwithstanding any provision of this Agreement or any Facility Document to the contrary, the interest payable with

respect to any Loan shall in no event exceed the Committed Amount of interest permitted from time to time by applicable law.

     3. Commitment Fee:  The Borrowers, during the continuation of the Facility, will pay to the Bank on a quarterly basis a
commitment fee (the "Commitment Fee") at a rate per annum (based on a 360-day year) equal to 50 basis points (0.50%) of the aggregate average daily unused total Committed Amount. The Commitment Fee is payable to the Bank quarterly in arrears on the
last Business Day of each March, June, September and December and on the Maturity Date.

4. Voluntary Reduction of Committed Amount.

     The Parent Borrower may at any time reduce the Committed Amount; provided that (i) each reduction of the Committed Amount
shall be in an amount that is an integral multiple of $500,000 and (ii) the Borrower shall not reduce the Committed Amount if, after giving effect to any concurrent prepayment of the Loans in accordance with Section 7 below, the then outstanding
principal amount of Loans made hereunder would exceed the Committed Amount.

     5. Notes. All of the Loans made hereunder by the Bank to a Borrower shall be evidenced by a promissory note in the form of
Exhibit B attached hereto (a “Note”).  Each of the Borrowers shall execute a Note and the Borrowers hereby confirm that the aggregate unpaid principal amount of each Note shall be as shown in the Bank’s confirmations from time to time
("Confirmations") and that such Confirmations shall be recorded and confirmed by the Bank and that Borrower agrees to send notice of any manifest error of any such Confirmations
within five (5) business days after receipt of any such Confirmation. All such Confirmations shall constitute prima facie evidence of the accuracy of the information so recorded and shall be conclusive and binding upon the Borrower in the absence of
manifest error.  Any failure to make any such notation, however, shall not limit or otherwise affect the obligations of such Borrower hereunder or under such Note. 

     6. Payments.  All borrowings, payments and repayments shall be made upon a day on which the Bank is open for business at its
offices in New York, New York, and, with respect to a Loan bearing interest at the LIBOR Rate, which is also a day on which the London branch of the Bank is open for business for dealings in the interbank dollar market (as applicable, each,
respectively a "Business Day".  If any payment of principal or interest in respect of a Loan or any other amount due in respect of the Facility or the Facility Documents becomes due on a day that is not a Business Day, such payment shall be made on
the next succeeding Business Day, and such extension of time shall be included in computing interest in connection with such payment. All payments shall be applied by the Lender first to interest and other charges then accrued under this Agreement
and then to principal of the Loan under this Agreement.

     All payments to the Bank hereunder shall be made by wire transfer to the Bank as follows: Account No: 35150840049 with Federal Reserve Bank – New York for account Intesa Sanpaolo S.p.A. -
New York Branch, ABA # 026005319 Ref.: Fuel System Solutions or Impco Technologies (as appropriate), in lawful money of the United States of America and in immediately available funds or as otherwise specified by the Bank to the Borrowers from time
to time.

	
7.      		
Optional and Mandatory Prepayments of Loans:	
	 
	 	
(a) Optional Prepayments: Any Loan may be prepaid in whole or in part prior	
	 

to the stated maturity thereof, together with accrued interest on the amount prepaid to the date of prepayment, upon the receipt by the Bank of five(5) Business Days' irrevocable prior written notice from the relevant
Borrower. Such Borrower shall, on the date of any prepayment (regardless of the reason for such prepayment and including a prepayment of any Loan upon the acceleration thereof by the Bank following an Event of Default), indemnify and compensate the
Bank for any and all losses, costs, expenses, damages, fees and other disbursements incurred or paid by the Bank resulting from or attributable to costs relating to the breaking of any funding arrangements of the Bank and all loss of margin with
respect to the redeployment of funds. The Bank shall provide to the relevant Borrower a certificate specifying such losses, costs, expenses, damages, fees and other disbursements, which certificate shall be conclusive and binding upon such Borrower
in the absence of manifest error.

     (b) Mandatory prepayments: The Borrowers shall prepay the Loans with 100% (one hundred percent) of the proceeds of the
following: (a) any issuance of shares of the Parent Borrower, excluding the US 30.000.000 under the Registration Statement on Form S-3 (File No. 333-159624) filed on June 1, 2009 as amended June 16, 2009, with the Security and Exchange Commission, (b) any issuance of bonds for the benefit of the Parent Borrower, (c) any sale of the assets of the Parent Borrower or its subsidiaries, not in the ordinary course of
business, in excess of US $2,000,000 (Two Million United States Dollars), and (d) any loans to the Parent Borrower by its shareholders.  If any prepayment required under this sub-Section 7(b) is due for a Loan which is bearing interest at the
LIBOR Rate or the Cost of Funds Rate, and such prepayment falls on a day other than a date which is the last day of a LIBOR Interest Period or a Cost of Funds Interest Period, such proceeds shall be deposited into a mandatory prepayment deposit
account in the Borrower’s name with the Bank until the end of such relevant interest period, at which point the account will be closed and any outstanding Loans hereunder will be reduced by the principal amount of the account. Amounts prepaid
under this sub-Section 7(b) may not be re-borrowed and the Committed Amount shall be reduced accordingly.

     8. Conditions Precedent to Initial. Prior to making the initial Loan to or for the account of any Borrower hereunder, the Bank
shall have received each of the following in form and substance satisfactory to the Bank:

	
(a)      		
executed originals of each of the Facility Documents, including, without limitation, this Agreement and each Note;	
	 
	
(b)      		
certified copies of the Borrowers’ articles of incorporation, bylaws, partnership agreement or other organizational documents;	
	 
	
(c)      		
a certified copy of resolutions of the Borrowers’ board of directors or other governing body authorizing the entering into of the Facility by the Borrowers and Borrowers’ incumbency certificate and the execution,
delivery and performance by the Borrowers of the Facility Documents;	
	 
	
(d)      		
executed original of the Agreement for Account for each Borrower;	
	 
	
(e)      		
a legal opinion of counsel to each Borrower and the Dutch Guarantor (as defined below) in such jurisdictions as may be required by the Bank, each such opinion to be in form and substance satisfactory to the Bank;	
	 
	
(f)      		
a representation from the Parent Borrower that there has been no material change in the consolidated indebtedness of the Parent Borrower since the latest published 10-Q; and	
	 
	
(g)      		
all other resolutions, authorizations, approvals, powers, consents, licenses and documents as may be necessary or otherwise required by the Bank.	
	 

     9. Conditions Precedent to Each Loan.  In addition to the conditions precedent specified in Section 8 with respect to the
initial Loan hereunder, prior to making any Loan to the Borrowers hereunder, the Bank shall be satisfied that each of the following conditions are met:

	
(a)      		
in the case of Loans, the amount of the requested Loan, together with all other amounts outstanding in respect of the Facility, shall not, when aggregated with all other Loans heretofore made and outstanding hereunder, exceed
the Committed Amount; and	
	 
	
(b)      		
at the time of making such Loan, and after giving effect thereto, no Event of Default (as defined below) or any event or circumstance which, with the giving of notice or the lapse of time or both, would constitute an Event of
Default (a "Default") has occurred or is continuing with respect to either of the Borrowers under any of the Facility Documents.	
	 
	 	
10. Guaranties. To induce the Bank to provide the financial accommodations	
	 

provided under the Facility Documents to the Borrowers, the Parent Borrower, the Co-Borrower and IMPCO Technologies B.V. (f/k/a IMPC Beru Holland), located at Distributieweg 9, 2645 EG DELFGAUW, The Netherlands (the
“Dutch Guarantor”), and for good consideration, give the following guaranties to the Bank:

     (a) The Parent Borrower Guaranty: The Parent Borrower hereby unconditionally and irrevocably guaranties to the Bank, its
successors and permitted assigns upon demand (a) the full and prompt payment of all of the Co-Borrower’s undertakings and obligations under the Facility Documents, whether due or to become due, secured or unsecured, joint or several; (b) the
performance of all of the Co-Borrower’s obligations under the Facility Documents, and (c) any and all reasonable costs and expenses incurred by the Bank in enforcing these Facility Documents against the Co-Borrower and/or the Parent Borrower.

     All amounts payable by the Parent Borrower hereunder shall be paid in full in the currency in which the underlying obligation is denominated, free and clear of any deduction or withholding of any
nature whatsoever. If the Parent Borrower is required by law to withhold any amounts, the Parent Borrower hereby agrees to pay such additional amounts as may be necessary to cause the actual amount received by the Bank to equal the amount which
would have been received if the withholding were not required, provided the Bank shall take all actions reasonably required for Parent Borrower to receive a refund of such amount withheld. This guaranty by the Parent Borrower is a guaranty of
payment and performance and not of collection. The Parent Borrower hereby agrees that the obligations of the Parent Borrower hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of this Agreement or any
transaction hereunder; the absence of any action to enforce the same; any waiver or consent by the Bank concerning any provisions hereof the rendering of any judgment against or any action to enforce the same; or any other circumstances that might
otherwise constitute a legal or equitable discharge of a guarantor or a defense of a guarantor. The Parent Borrower hereby waives diligence, presentment, protest, notice of protest, acceleration, and dishonor and all demands whatsoever, except as
noted herein. The Bank shall not be obligated, as a condition precedent to performance hereunder to file any claim relating to the obligations owing to it if the Co-Borrower becomes subject to a bankruptcy, reorganization, or similar proceeding and
the failure of the Bank to file a claim shall not affect the Parent Borrower’s obligations hereunder. If any payment to the Bank on account of any obligation must be returned for any reason whatsoever, the Parent Borrower shall remain liable
hereunder for such obligation as if such payment had not been made.

(b) The Co-Borrower Guaranty: The Co-Borrower hereby

unconditionally and irrevocably guaranties to the Bank, its successors and permitted assigns upon demand (a) the full and prompt payment of all of the Parent Borrower’s undertakings and obligations under the Facility
Documents, whether due or to become due, secured or unsecured, joint or several; (b) the performance of all of the Parent Borrower’s obligations under the Facility Documents, and (c) any and all reasonable costs and expenses incurred by
the

Bank in enforcing these Facility Documents against the Parent Borrower and/or the Co-Borrower. 

     All amounts payable by the Co-Borrower hereunder shall be paid in full in the currency in which the underlying obligation is denominated, free and clear of any deduction or withholding of any
nature whatsoever. If the Co-Borrower is required by law to withhold any amounts, the Co-Borrower hereby agrees to pay such additional amounts as may be necessary to cause the actual amount received by the Bank to equal the amount which would have
been received if the withholding were not required, provided the Bank shall take all actions reasonably required for Co-Borrower to receive a refund of such amount withheld. This guaranty by the Co-Borrower is a guaranty of payment and performance
and not of collection. The Co-Borrower hereby agrees that the obligations of the Co-Borrower hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of this Agreement or any transaction hereunder; the absence of
any action to enforce the same; any waiver or consent by the Bank concerning any provisions hereof the rendering of any judgment against or any action to enforce the same; or any other circumstances that might otherwise constitute a legal or
equitable discharge of a guarantor or a defense of a guarantor. The Co-Borrower hereby waives diligence, presentment, protest, notice of protest, acceleration, and dishonor and all demands whatsoever, except as noted herein. The Bank shall not be
obligated, as a condition precedent to performance hereunder to file any claim relating to the obligations owing to it if the Parent Borrower becomes subject to a bankruptcy, reorganization, or similar proceeding and the failure of the Bank to file
a claim shall not affect the Co-Borrower’s obligations hereunder. If any payment to the Bank on account of any obligation must be returned for any reason whatsoever, the Co-Borrower shall remain liable hereunder for such obligation as if such
payment had not been made.

     (c) The Dutch Guaranty: The Dutch Guarantor hereby unconditionally and irrevocably guaranties to the Bank, its successors and
permitted assigns upon demand (a) the full and prompt payment of all of the Borrowers’ undertakings and obligations under the Facility Documents, whether due or to become due, secured or unsecured, joint or several; (b) the performance of all
of the Borrowers’ obligations under the Facility Documents, and (c) any and all reasonable costs and expenses incurred by the Bank in enforcing these Facility Documents against the Borrowers or the Dutch Guarantor (which, with respect to the
Dutch Guarantor) shall be limited to this Section 10(c). 

     All amounts payable by the Dutch Guarantor hereunder shall be paid in full in the currency in which the underlying obligation is denominated, free and clear of any deduction or withholding of any
nature whatsoever. If the Dutch Guarantor is required by law to withhold any amounts, the Dutch Guarantor hereby agrees to pay such additional amounts as may be necessary to cause the

actual amount received by the Bank to equal the amount which would have been received if the withholding were not required, provided the Bank shall take all actions reasonably required for Dutch Guarantor to receive a refund
of such amount withheld. This guaranty by the Dutch Guarantor is a guaranty of payment and performance and not of collection. The Dutch Guarantor hereby agrees that the obligations of the Dutch Guarantor hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of this Agreement or any transaction hereunder; the absence of any action to enforce the same; any waiver or consent by the Bank concerning any provisions hereof the rendering of any
judgment against or any action to enforce the same; or any other circumstances that might otherwise constitute a legal or equitable discharge of a guarantor or a defense of a guarantor. The Dutch Guarantor hereby waives diligence, presentment,
protest, notice of protest, acceleration, and dishonor and all demands whatsoever, except as noted herein. The Bank shall not be obligated, as a condition precedent to performance hereunder to file any claim relating to the obligations owing to it
if either Borrower becomes subject to bankruptcy, reorganization, or similar proceeding and the failure of the Bank to file a claim shall not affect the Dutch Guarantor’s obligations hereunder. If any payment to the Bank on account of any
obligation must be returned for any reason whatsoever, the Dutch Guarantor shall remain liable hereunder for such obligation as if such payment had not been made.

     11. Representations and Warranties. The Borrowers represent and warrant to the Bank (which representations and warranties will
be deemed to be repeated by the Borrowers on each day on which any Loan, or other obligation of the Borrowers remains outstanding pursuant to the Facility Documents
that:

	
(a)      		
They are corporations duly organized, validly existing and in good standing under the laws of the jurisdiction of their organization or incorporation;	
	 
	
(b)      		
They are duly qualified, in good standing and authorized to do business in each jurisdiction to the extent required by applicable law, regulation or rule, except where the failure to do so does not in the aggregate have a
material adverse effect on the business or financial condition of each such Borrower and its subsidiaries taken as a whole;	
	 
	
(c)      		
They have the power to enter into the Facility and to execute each of the Facility Documents, to deliver each of the Facility Documents and to perform each of their obligations under each of the Facility Documents and have
taken all necessary action to authorize such execution, delivery and performance;	
	 
	
(d)      		
Each of the Facility Documents has been duly executed and delivered on behalf of the Borrowers;	
	 

	
(e)      		
The execution, delivery and performance of each of the Facility Documents by the Borrowers do not and will not violate or conflict with any law applicable to it, any provision of their organizational documents, any order or
judgment of any court or other agency of government applicable to them or any of their assets or any contractual restriction binding on or affecting it or any of their assets;	
	 
	
(f)      		
All governmental and other consents, authorizations, approvals, licenses and orders that are required to have been obtained by them with respect to the Facility Documents and the transactions contemplated thereby have been
obtained and are in full force and effect and all conditions of any such consents, authorizations, approvals, licenses and orders have been complied with;	
	 
	
(g)      		
They are not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulations G and U issued by the Board of Governors of the U.S.	
	 
	 	
Reserve System) (the “Margin Regulations”), and no proceeds of any Loan will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin
stock;	
	 
	
(h)      		
Their obligations under each of the Facility Documents constitute its legal, valid and binding obligations, enforceable in accordance with their respective terms (subject to applicable bankruptcy, reorganization, insolvency,
moratorium or similar laws affecting creditors' rights generally and subject, as to enforceability, to equitable principles of general application (regardless of whether enforcement is sought in a proceeding in equity or at law));	
	 
	
(i)      		
No Event of Default or Default has occurred or is continuing, and no such Event of Default or Default would occur as a result of its entering into or performing its obligations under any of the Facility Documents;	
	 
	
(j)      		
There is not pending or, to its knowledge, threatened against it or any of its subsidiaries any action, suit or proceeding at law or in equity or before any court, tribunal, governmental body, agency or official or any
arbitrator that is likely to affect (1) the legality, validity or enforceability against it of any of the Facility Documents or its ability to perform its obligations under any of the Facility Documents or (2) in a materially adverse way, the
operations, business, property or assets or financial or other condition of the Borrower and its subsidiaries, taken as a whole; and	
	 
	
(k)      		
Neither Borrower is listed on the Specially Designated Nationals and Blocked Persons List maintained by the Office of Foreign Asset Control,	
	 

Department of the Treasury (“OFAC”) pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001), and/or any other list maintained pursuant to any of the rules and regulations of OFAC or pursuant to
any other applicable Executive Orders or otherwise subject to any sanction imposed pursuant to an OFAC implemented regulation.

     12. Covenants. Each Borrower covenants to the Bank that, so long as either Borrower has or may have any obligation under any
of the Facility Documents:

	
(a)      		
It, and shall ensure that the subsidiaries of the Co-Borrower (each a “Subsidiary”, and, collectively, the “Subsidiaries”), will maintain in full force and effect and comply with all consents,
authorizations, approvals, licenses and orders of any governmental or other authority that are required to be obtained by it with respect to any of the Facility Documents or the transactions contemplated thereby and will use all reasonable efforts
to obtain any such consents, authorizations, approvals, licenses and orders that may become necessary in the future;	
	 
	
(b)      		
It, and shall ensure that the Subsidiaries, will comply in all material respects with all applicable laws and orders to which it may be subject if failure so to comply would materially impair its ability to perform its
obligations under any of the Facility Documents;	
	 
	
(c)      		
It will notify the Bank immediately upon the occurrence of a Default or an Event of Default;	
	 
	
(d)      		
It will provide to the Bank (i) audited consolidated annual report of the Parent Borrower as soon as available, and in any event within 120 days after then end of each fiscal year of the Parent Borrower, and all quarterly
financial reports, as soon as available, and in any event within 60 days after the end of each quarter of each fiscal year of the Parent Borrower, and (ii) unaudited consolidating financial statements of the Co-Borrower (and its subsidiaries, Impco
Technologies B.V. and Impco Japan) as soon as available, and in any event within 120 days after then end of each fiscal year of the Co-Borrower, and all quarterly consolidating financial reports, as soon as available, and in any event within 60 days
after the end of each quarter of each fiscal year of the Co-Borrower (and its subsidiaries, Impco Technologies B.V. and Impco Japan); all such reports shall be prepared in accordance with generally accepted accounting principles, consistently
applied, in the United States of America or the jurisdiction of such Borrower's incorporation or organization;	
	 
	
(e)      		
concurrently with any delivery of financial statements under clause (d) above, the Parent Borrower shall deliver a certificate on behalf of the Parent Borrower signed by the chief financial officer of the Parent	
	 

	 	
Borrower or another designated officer (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, and
(ii) setting forth reasonably detailed calculations demonstrating whether the Parent Borrower was in compliance with the Financial Covenants set forth in Section 13 herein.	
	 
	
(f)      		
It will use the proceeds of the Facility only for the purposes specified in the description of the Facility;	
	 
	
(g)      		
It will not use the proceeds of any Loan in any manner that would cause such borrowing or the application of such proceeds to violate the Margin Regulations or any other applicable law, rule or regulation;	
	 
	
(h)      		
It will keep all payment obligations under the Facility Documents to which it is a party unconditional, unsecured and unsubordinated general obligations that rank and will rank at least pari passu with all other present and
future unsecured and unsubordinated indebtedness of such Borrower;	
	 
	
(i)      		
It, and shall ensure that the Subsidiaries, will continue to engage in business of the same general type as conducted by it on the Effective Date (as defined below);	
	 
	
(j)      		
The Parent Borrower will directly or indirectly own up to at least 51% of the ordinary voting shares of the Co-Borrower and the Dutch Guarantor;	
	 
	
(k)      		
It, and shall ensure that the Subsidiaries, will not create or permit to subsist any mortgage, lien, charge, security interest, assignment or other encumbrance whatsoever in or over any of its property or assets now owned or
hereafter acquired by it or on any capital stock of any of its subsidiaries;	
	 
	
(l)      		
The Parent Borrower may continue to make dividend distributions to its shareholders; provided that such dividend distributions shall not be made in the
event either Borrower is in Default hereunder. Provided that no Default exists, the Co-Borrower shall be allowed to make dividend distributions to the Parent Borrower; or	
	 
	
(n)      		
Any loans made by shareholders to the Parent Borrower shall be subordinated to the Loans made hereunder; provided that the proceeds of any such loans made by shareholders shall be applied in accordance with sub-Section 7(b)
hereinabove;	
	 
	
(o)      		
It shall not (and shall ensure that no Subsidiaries will) acquire a company or any equity or interest in a business ; provided that; such limitation	
	 

shall not apply to an acquisition for cash of all or the majority of the issued share capital of a corporation in the event that:

	
no Default is continuing on the closing date of such acquisition (or would occur as a result of such acquisition);
	
the acquired company is engaged in a business substantially the same as (or ancillary or related to) that carried on by the Borrowers; and
	
the consideration (including associated costs and expenses) for the acquisition and any Debt (as defined in Section 13 hereinbelow) remaining in the acquired
company at the date of acquisition does not exceed in the aggregate US$20,000,000 (Twenty Million United States Dollars):

	
( p) 
		
 		
It shall not (and shall ensure that no Subsidiaries will) sell, transfer, 
	
	
 
		
 		
license or lease (including any sale and leaseback transaction) of any of 
	
	
 
		
 		
its property (“Dispose”), including any sale, assignment, transfer or 
	
	
 
		
 		
other disposal, with or without recourse, of any notes or accounts 
	
	
 
		
 		
receivable or any rights and claims associated therewith; except that, so 
	
	
 
		
 		
long as no Default exists or would result therefrom: 
	

	
(i)      		
any Subsidiary may Dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise),	
	 
	 	
(A)      		
to a Borrower, or	
	 
	 	
(B)      		
to another Subsidiary, or	
	 
	
(ii)      		
in the ordinary course of business, a Borrower or Subsidiary may Dispose of assets,	
	 
	 	
(A) of obsolete or redundant vehicles or equipment, or	
	 

	
(B)      		
of assets not falling in A above, provided that the aggregate value of such assets shall not exceed US $4,000,000 (Four million United States Dollars)
per year.	
	 

     13. Financial Covenants. The Parent Borrower must maintain the following Financial Covenants which shall be based upon the
consolidated financial statements of the Parent Borrower and its subsidiaries, all which have been prepared in accordance with generally accepted accounting principles in the jurisdiction of their incorporation (the “Consolidated
Financials”):

	
i.      		
A ratio of Net Debt/EBITDA for the then most recently concluded period of four consecutive fiscal quarters of the Parent Borrower to be less than 2;	
	 

	
ii.      		
A Consolidated Net Worth of at least $135,000,000 (One hundred and thirty five million United States Dollars).	
	 
	
iii.      		
The Parent Borrower shall not, and shall not permit any of its subsidiaries to create, incur, assume or permit to exist any Debt other than (i) Debt of any such subsidiary owing to any other subsidiary or to the Parent
Borrower or (ii) Debt for borrowed money in a total aggregate principal amount, the U.S. Dollar equivalent of which does not exceed US$75,000,000(Seventy five Million United States Dollars).	
	 

	 	
For the purposes hereinabove:

“Consolidated Net Worth" means, as of the date of any determination, the total of shareholders' equity as computed under the Consolidated Financials of
the Parent Borrower.

 “EBITDA” means, for any period, net income (or net loss) calculated before the cumulative effect of accounting changes plus the sum of a)
interest expenses, b) income tax expense, c) extraordinary losses not attributable to operations and attributable to non-cash charges or write-offs included in net income d) depreciation expense, and e) amortization expense all as shown in the
financial statements.”

“Net Debt” shall mean the sum of short term Debt (as defined below) and long term Debt, less cash and cash equivalents (as represented in the
Parent Borrower’s consolidated financial statements).

“Debt” means (A) indebtedness for borrowed money or for the deferred purchase price of property or services; (B) financial obligations evidenced
by bonds debentures, notes or other similar instruments, (C) financial obligations as lessee under leases which have been or should be, in accordance with generally accepted accounting principles, recorded as capital leases; and (D) obligations
under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise or assure a creditor against loss in respect of, indebtedness or financial obligations or others of the kind
referred to in clauses (A) through (D) above; provided that such calculation shall not include any intercompany indebtedness.

     14. Events of Default and Remedies. The occurrence of any of the following events or conditions shall constitute an event of
default (an "Event of Default") with respect to the Borrowers under this Agreement:

	
(a)      		
Any amounts due under any of the Facility Documents are not paid (i) when due or (ii) with respect to other amounts within five (5) days after the due date thereof;	
	 
	
(b)      		
(i) Any event of default occurs and is continuing with respect to any of the Facility Documents other than this Agreement or (ii) the failure or refusal of the Borrowers to properly perform, observe or comply with clause
12(a) or 12 (j) after written notice thereof from the Bank, or (ii) the failure or refusal of the Borrowers to properly perform, observe or comply with any condition, obligation, covenant or agreement (other than an obligation specified in clause
12(a) or 12 (j)) to be performed, observed or complied with by the Borrowers in any of the Facility Documents, and such failure or refusal continues for a period of thirty (30) days, or for such lesser period as stipulated in any of such Facility
Documents, after written notice thereof from the Bank;	
	 
	
(c)      		
A representation made or repeated or deemed to have been made or repeated by either of the Borrowers in this Agreement proves to have been incorrect or misleading in any material respect when made or repeated or deemed to
have been made or repeated;	
	 
	
(d)      		
Either of the Borrowers (i) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (ii) becomes insolvent or is unable or fails to pay its debts or admits in writing its inability generally to pay its
debts as they become due; (iii) makes a general assignment, arrangement or composition with or for the benefit of its creditors; (iv) institutes or has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other
relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation which is not dismissed, discharged, stayed or restrained within thirty (30) days of the
institution or presentation thereof; (v) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); (vi) seeks or becomes subject to the appointment of an
administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets; (vii) has a distress, execution, attachment, sequestration or other legal process levied,
enforced or sued on or against all or substantially all its assets and such process is not dismissed, discharged, stayed or restrained, in each case within thirty (30) days thereafter; (viii) causes or is subject to any event with respect to it
which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in clauses (i) to (vii) (inclusive); or (ix) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the foregoing acts;	
	 

	
(e)      		
The Parent Borrower or any of its subsidiaries defaults in the observance or performance of any condition, obligation, covenant or agreement relating to any of its Material Indebtedness (as defined below) (which may, but not
need be, owing to the Bank) (and such default continues for a period sufficient to permit the acceleration of the maturity thereof, whether or not such acceleration occurs); for the purposes of this sub-Section, “Material Indebtedness”
shall mean indebtedness in an amount of at least US$2,000,000 (Two Million United States Dollars);	
	 
	
(f)      		
Without the prior written consent of the Bank, either Borrower or any subsidiary of the Co-Borrower is a party to any merger, amalgamation, spin-off, carve-out or consolidation (other than an intra-group merger, or
amalgamation or consolidation) where it is not the surviving entity or transfers all or substantially all its assets to another person or entity;	
	 
	
(g)      		
The occurrence of any event or circumstance that would reasonably be expected to have a material adverse effect on (i) the business or financial condition of either Borrower, (ii) the ability of either Borrower to meet its
payment obligations under this Agreement; (iii) the validity or enforceability of this Agreement; or (iv) the validity or enforceability of the Bank’s rights or remedies under this Agreement;	
	 
	
(h)      		
The failure or refusal of the Parent Borrower and the Dutch Guarantor to properly perform, observe or comply with Guaranty; or	
	 
	
(i)      		
The Parent Borrower no longer directly or indirectly owns 51% or more of the ordinary voting shares of the Co-Borrower and the Dutch Guarantor;	
	 

     Upon the occurrence and during the continuance of an Event of Default, the Bank will have the option, upon notice to the Parent Borrower, of taking one or more of the following actions: (i)
declaring any or all unpaid Loans, together with unpaid accrued interest thereon, and any or all other amounts payable to the Bank under the Facility Documents or otherwise to be immediately due and payable and/or (ii) immediately terminating the
Facility.

     15. Increased Costs.  If the Bank determines in its sole discretion that the effect of the adoption of or any change in, after
the date of this Agreement, any applicable law, treaty or governmental regulation, guideline, rule or order or the interpretation thereof by any governmental authority charged with the administration thereof (such as, for example, a change in
official reserve requirements that the Bank is required to maintain in respect of loans or deposits or other funds procured for funding such loans) is to (i) increase the cost to the Bank of making any Loan hereunder  or otherwise funding,
performing or maintaining any of its obligations under the Facility or any Facility Document, (ii) reduce the amount of any payment of principal or interest or any other amount receivable by the Bank or (iii) reduce the rate of return of the Bank's
capital as a consequence of its obligations to the Parent

Borrower or of any Loan to the Borrowers pursuant to this Agreement or otherwise to a level below that which the Bank could have achieved but for such adoption or change, then the Borrowers will pay to the Bank on demand such
additional amounts as the Bank may determine to be required to compensate the Bank for such additional cost or reduction. Any such demand pursuant to this Section 15 shall be accompanied by a certificate of the Bank specifying the amount so
demanded, which certificate shall be conclusive and binding on the Borrowers in the absence of manifest error.

     16. Taxes and Expenses. (a) All payments made by the Borrowers in respect of principal of, and interest on, all Loans and all
other amounts payable under the Facility Documents or otherwise will be made without set-off, counterclaim or other defense and will be made free and clear of, and without deduction or withholding for, any present or future taxes, levies, imposts,
duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any jurisdiction or by any political subdivision or taxing authority thereof or therein and all interest, penalties or similar liabilities with respect thereto
other than Excluded Taxes (collectively, the "Taxes").  The Borrowers shall pay on demand all stamp, documentary and other similar duties and taxes, if any, to which any Facility Document from time to time may be subject or give rise. If either
Borrower is required by applicable law to make any deduction or withholding on any payment as described above in respect of Taxes or otherwise, such Borrower shall (i) promptly notify the Bank of such occurrence; (ii) pay to the relevant taxation or
other authorities the full amount of the deduction or withholding within the time allowed; (iii) furnish to the Bank within thirty (30) days of such payment, an official receipt from such authorities for all amounts so deducted or withheld; and (iv)
pay to the Bank an additional amount so that the Bank receives on the due date of such payment the full amount the Bank would have received had no such deduction or withholding taken place. “Excluded Taxes” means (a) taxes imposed on or
measured by Bank’s overall net income and franchise taxes imposed on it by the jurisdiction or any political subdivision thereof under the laws of which Bank is organized or in which its principal office is located or in which its applicable
lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar jurisdiction imposed by any other jurisdiction in which either Borrower is located, and (c) if Bank is organized under the laws of a
jurisdiction other than the United States of America, any withholding tax that is imposed on amounts payable to Bank by such other jurisdiction.

     Subject to the Bank's compliance with its obligations to deliver certain forms, certificates and documents as set forth in this paragraph, the relevant Borrower will indemnify and hold harmless
the Bank, and reimburse the Bank upon its written request, for the amount of any Taxes so levied or imposed and paid by the Bank. Upon demand by such Borrower, the Bank shall, as soon as practicable, deliver to such Borrower or to such government or
taxing authority as such Borrower reasonably directs, any form, certificate or document which the Bank is entitled as a matter of law to deliver that may be requested in order to allow such Borrower to make payments in respect of the Loans and all
other amounts payable in respect of the

Facility Documents without any deduction or withholding for or on account of any Taxes or with such deduction or withholding at a reduced rate.

     (b)  The Borrowers agree to pay on demand all of the Bank's costs and expenses, including, without limitation, reasonable attorneys' fees, in connection with the collection of any sums due to the
Bank and the enforcement, protection or perfection of its rights or interests hereunder and under the Facility Documents.

     17. Termination. (a) The Parent Borrower may terminate this Agreement by providing thirty (30) days' prior written notice to
the Bank (which notice, once given, shall be irrevocable) specifying a maturity date.  If a Loan(s) is outstanding and is scheduled to mature after such specified maturity date, the relevant Borrower shall prepay such Loan, together with all accrued
interest thereon to the date of such prepayment and all amounts payable under Section 7 hereof in respect of such prepayment, on such maturity date.

     18. GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.

     20. Jurisdiction. With respect to any suit, action or proceeding relating to this Agreement or any of the other Facility
Documents, the Borrowers irrevocably (a) submit to the non-exclusive jurisdiction of the courts in the State of New York and the United States District Court located in the Borough of Manhattan in New York City; and (b) waive any objection which
they may have at any time to the laying of venue of any such suit, action or proceeding brought in any such court, waives any claim that any such suit, action or proceeding have been brought in an inconvenient forum and further waive the right to
object with respect to any such suit, action or proceeding that such court does not have any jurisdiction over it.

     Nothing contained in this Section 20 shall limit or impair the right of the Bank to institute any suit, action, motion or proceeding in any other court of competent jurisdiction, nor shall the
taking of any suit, action or proceeding in one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not.

     21. Service of Process. The Borrowers hereby irrevocably consents to the service of any and all process in any suit, action or
proceeding relating to this Agreement or any of the other Facility Documents to which they are a party in such New York State or Federal Court sitting in New York City by the mailing of copies to them at their address specified below.

     22. WAIVER OF JURY TRIAL.  THE BORROWERS HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER FACILITY DOCUMENTS.

     23. Right of Set-Off. In addition to any rights or remedies now or hereafter granted under applicable law or otherwise, the
Bank, without any notice whatsoever to the Borrowers, may (but shall not be obliged to) set-off against any obligation of the Borrowers due and payable by the Borrowers under any of the Facility Documents any moneys held by the Bank for the account
of the Borrowers and in any currency whether or not such monies are then due and payable.

     24. Amendments, Modifications, Waivers, Etc. No amendment, modification or waiver of any provision of this Agreement or any of
the other Facility Documents and no consent by the Bank to any departure therefrom shall be effective unless such amendment, modification or waiver shall be in writing and signed by two duly authorized officers of the Bank, and the same shall then
be effective only for the period and on the conditions and for the specified instances specified in writing. No failure or delay by the Bank in exercising any right, power, remedy or privilege hereunder or under any of the Facility Documents shall
operate as a waiver thereof; nor shall any single or partial exercise thereof preclude any subsequent or further exercises thereof or the exercise of any other right, power, remedy or privilege. The rights, powers, remedies and privileges provided
in this Agreement and the other Facility Documents to the Bank are cumulative and not exclusive of any rights, powers, remedies and privileges provided by law or otherwise.

     25. Notices. All notifications, requests, demands and other communications hereunder to either the Bank or either Borrower
shall be in writing (unless otherwise specified herein) and given to the address(es) or facsimile number(s) or telex number(s) set forth under the signatures of the parties hereto.  Such notifications, requests, demands and other communications
shall be deemed effective (a) if sent by mail five Business Days after having been deposited in the mails first class postage prepaid (airmail if international) in an envelope addressed as aforesaid, or (b) if sent to an officer of the recipient, at
the time of delivery to such officer, or (c) if sent by facsimile, when that transmission is received by the recipient in legible form or if sent by telex, when the recipient's answerback is received.  Furthermore, the Borrower authorizes the Bank
to execute any of Borrower’s duly signed instructions sent to the Bank via fax without need for further confirmation. The Bank reserves the right to verify, from time to time, at its sole discretion, such instructions directly by
telephone.

     26. Entire Agreement.  This Agreement and the other Facility Documents constitute the entire agreement and understanding of
the parties with respect to the subject matter hereof and thereof and supersedes all oral communication and prior writings with respect thereto.

     27. Counterparts.  This Agreement may be executed and delivered in counterparts, each of which, when so executed and
delivered, will be deemed an original and all of which, taken together, shall constitute one instrument.

     28. Successors and Assigns. This Agreement and the Notes shall be binding and inure to the benefit of the parties hereto and
their respective successors and assigns, provided that, the Borrowers may not assign any of their rights or delegate any of their obligations under this Agreement or any of the other Facility Documents (or any part thereof) without the prior written
consent of the Bank.

     29. USA PATRIOT Act. The Bank hereby notifies the Borrowers that pursuant to the requirements of the USA PATRIOT Act (Title
III of Pub. L. 107-56 (signed into law October 26, 2001) (the “Act”), it is required to obtain, verify and record information that identifies the Borrowers, which information includes the name and address of the Borrowers and other
information that will allow the Bank to identify the Borrowers in accordance with the Act.

     30. Effective Date.  This Agreement shall become effective as of the date hereof (the "Effective Date"), if accepted by the
Borrowers as herein provided. If this Agreement is not accepted by the Borrower as herein provided, this Agreement shall not become effective and the offer set forth herein shall be deemed withdrawn. If the Borrowers desires to accept this
Agreement, an authorized officer or other representative of the Borrowers shall date and execute a copy of this Agreement where indicated below and return such copy to the undersigned on or before the Effective Date.

	
Respectfully,

INTESA SANPAOLO S.p.A., NEW YORK BRANCH

	
By: _/s/ Antonia Perrino_________

Name: Antonia Perrino

Title: Vice-President

By: _/s/ Giancarlo Baiocchi______

Name: Giancarlo Baiocchi

Title: First Vice-President

	
Bank's Address: 
		
 		
One William Street 
	
	
 
		
 		
New York, New York 10004 
	
	
Telephone: 
		
 		
(212) 
		
 		
607-3888 
	
	
Facsimile: 
		
 		
(212) 
		
 		
607-3727 
	
	
Attention: 
		
 		
Antonia Perrino 
	

	
AGREED AND ACCEPTED

as of July 10, 2009:

Fuel Systems Solutions, Inc., as Parent Borrower

By: _/s/ Rebecca H. Yang____________________

	
              Name: 
		
 		
Rebecca H. Yang 
	
	
              Title: 
		
 		
Treasurer 
	
	
 
	
	
Borrower's Address: 
		
 		
3030 South Susan Street 
	
	
 
		
 		
 
		
 		
Santa Ana, CA 97204 
	
	
Telephone: 
		
 		
 
		
 		
(714) 656-1300 
	
	
Facsimile: 
		
 		
 
		
 		
(714) 646-1401 
	
	
Attention: 
		
 		
 
		
 		
Rebecca H. Yang, Treasurer 
	

IMPCO Technologies, Inc., as Co-Borrower

By: _/s/ Rebecca H. Yang_____________________

	
              Name: 
		
 		
Rebecca H. Yang 
	
	
              Title: 
		
 		
Treasurer 
	
	
 
	
	
Borrower's Address: 
		
 		
3030 South Susan Street 
	
	
 
		
 		
 
		
 		
Santa Ana, CA 97204 
	
	
Telephone: 
		
 		
 
		
 		
(714) 656-1200 
	
	
Facsimile: 
		
 		
 
		
 		
(714) 646-1401 
	
	
Attention: 
		
 		
 
		
 		
Rebecca H. Yang, Treasurer 
	

IMPCO Technologies B.V., as Dutch Guarantor

By: _/s/ Robert M.U. Frings_____________________

	
              Name: 
		
 		
Robert M.U. Frings 
	
	
              Title: 
		
 		
Managing Director 
	
	
 
	
	
Address: 
		
 		
Distributieweg 9, 
	
	
 
		
 		
2645 EG DELFGAUW 
	
	
 
		
 		
The Netherlands 
	
	
 
	
	
Telephone: 
		
 		
011 31 15 274 2552 
	
	
Facsimile: 
		
 		
011 31 15 274 2599 
	
	
Attention: 
		
 		
Robert M.U. Frings, Managing Director 
	

	
Exhibit A

	
NOTICE OF BORROWING

	
[Insert Date]

Intesa Sanpaolo S.p.A.

One William Street

New York, NY 10004

Attn: Antonia Perrino

Via Facsimile: (212) 607-3727

     The undersigned, [insert name of relevant Borrower], refer to the facility letter dated as of July 10, 2009, as the same may be amended or otherwise modified from time to time (the
“Agreement” the terms defined therein being used herein as therein defined), by and among Intesa Sanpaolo S.p.A., New York Branch, acting through its New York Branch at One William Street, New York, NY (the "Bank") and the Borrowers
thereto, and hereby gives you notice, irrevocably, pursuant to Section 1 of the Agreement that the undersigned hereby requests a Loan under the Agreement, and in that connection sets forth below the information relating to such Loan as required by
Section 1 of the Agreement:

	
(i)      		
the date of the proposed Loan is [__/__/____],	
	 
	
(ii)      		
the amount of the proposed Loan is [$
___________
],	
	 
	
(iii)      		
the stated maturity of the proposed Loan is [__/__/____],	
	 
	
(iv)      		
the interest rate option applicable to the Loan is [choose one: LIBOR Rate, Cost of Funds Rate, or Prime Rate], and	
	 
	
(v)      		
the bank account of the Borrower to which the proceeds of such Loan should be paid is [insert identifying account information and outgoing wire instructions].	
	 

     The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the date of the proposed Loan:

	
(A)      		
the Representations and Warranties contained in Section 11 are correct before and after giving effect to the proposed Loan and to the application of the proceeds therefrom, as though made on and as of such date;
and	
	 
	
(B)      		
no event has occurred and is continuing, or would result from such proposed Loan or from the application of the proceeds therefrom, which constitutes a Default or Event of Default.	
	 

	 	
[insert name of Borrower]

_________________________________

By:

Title:

	
Exhibit B

Date of Issue: 
__________________

	
MASTER SHORT-TERM NOTE

For value received, the undersigned (the "Borrower"), HEREBY PROMISES TO PAY to the order of Intesa Sanpaolo S.p.A., New York Branch ("Intesa Sanpaolo") the aggregate unpaid principal amount of this note as shown(COMMENT: SEE PARAGRAPH 5 NOTES) in Intesa Sanpaolo's confirmations from time to time ("Confirmations") together with interest computed as set forth in the Agreement (as defined below) on the then outstanding unpaid principal amount of this note on the Maturity Date as defined in the
facility letter dated as of [insert date] by and between the Borrower and Intesa Sanpaolo (the “Agreement”).  Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Agreement. This note shall replace that certain note entered into between the undersigned and the Bank on December 17th, 2008.  Any amount
outstanding thereunder shall be due hereunder without novation.

The Borrower has designated, and may from time to time re-designate, in writing to Intesa Sanpaolo one or more "Authorized Representatives" who are authorized to request and commit with Intesa Sanpaolo to the terms (including
applicable interest rates) of loans by Intesa Sanpaolo to Borrower (each an "Loan") by telephone and in writing.  Such Authorized Representatives will confirm all telephone
transactions in writing to Intesa Sanpaolo the same day that they are entered into but failure so to confirm shall not affect the Borrower's obligations hereunder.

Each Loan with the date thereof, and each payment made on account of principal hereof, shall be recorded and confirmed by Intesa Sanpaolo and, prior to any transfer hereof, copies of the Confirmations reflecting then unpaid
obligations shall be attached hereto. The interest rate applicable to each Loan will be shown in the Confirmations as a stated annual percentage. Interest will be calculated on the basis of the number of days actually elapsed in a 360 day year and
paid on the maturity date of each Loan as shown in its initial Confirmation. Both principal and interest are payable as shown in Intesa Sanpaolo’s Confirmations but if not so stated then in lawful money of the United States of America to the
account of Intesa Sanpaolo’s New York Branch No. 026005319 at Federal Reserve Bank, New York, New York in immediately available funds. In the event the Borrower does not repay the loan at maturity, Borrower authorizes Intesa Sanpaolo to charge
Borrower’s accounts with Intesa Sanpaolo for any amounts due hereunder.

This Note is a Note referred to in the Agreement and is entitled to the benefits thereof. In the absence of manifest error and prompt notice thereof from Borrower, which Borrower agrees to send to Intesa Sanpaolo within three
business days after receipt of any Confirmation, the contents of the Confirmations are conclusive and binding on the Borrower as to the existence and amounts of the Borrower's obligations recorded thereon but Intesa Sanpaolo's failure to complete
and send Confirmations

shall not impair its rights or reduce Borrower's obligations hereunder all of which shall be determined from Intesa Sanpaolo's books and records. The Borrower hereby waives presentment, demand, notice, protest and all other
demands or notices in connection with the delivery, acceptance, performance, default or enforcement of this Note. The Borrower agrees to pay on demand all reasonable costs and expenses, including attorneys’ costs and fees, incurred or paid by
the Bank in connection with the enforcement of this Note.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

	
[insert name of Borrower]

	 	
By:

Name:

Title:

By
_____________________________________
 Name: Title:ex10-1.htm

    Exhibit
10.1

     

    NEITHER
THIS NOTE NOR THE SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

     

     

    
      	 No. HM
      -1 	
               Principal
      Amount       $
  100,000

            
	 	
               Original
      Issue Date:  July __,
2009

            

    

     

     

    INVO
BIOSCIENCE, INC.

     

    12%
SENIOR SECURED CONVERTIBLE PROMISSORY NOTE

     

    FOR VALUE
RECEIVED, the Company promises to pay to the order of ______or its registered
assigns (the “Investor”), in United States
Dollars, the principal sum of  $100,000, on the first to occur of (i)
one (1) year following the Original Issue Date (as defined below), or (ii) the
follow on financing of at least $2,500,000 (as defined below), (in each case,
the “Maturity Date”),
and to pay interest to the Investor on the principal amount of this Note
outstanding in accordance with the provisions hereof.  All holders of
Notes are referred to collectively, as the “Investors.”  The
Company shall have the right to prepay this Note, in part or in whole, at any
time and from time to time, without any prepayment penalty or other
fee.  In the event that the Maturity Date occurs on a date that is not
a Business Day (as defined below), then all payments due on such date shall be
payable on the next succeeding Business Day.

     

    So long
as this Note remains outstanding, it is subject to the following additional
provisions:

     

    1. Definitions.                                In
addition to the terms defined elsewhere in this Note: (a) capitalized terms that
are used but not otherwise defined herein have the meanings given to such terms
in the Purchase Agreement, dated as of July __, 2009, among the Company and the
Investors identified therein (the “Purchase Agreement”), and (b)
the following terms have the meanings indicated below:

     

    “Bankruptcy Event” means any
of the following events:  (a) the Company commences a proceeding under
any bankruptcy, reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction relating to the Company; (b) there is commenced against the Company
any such case or proceeding described in the foregoing clause (a) that is not
dismissed within sixty (60) days after commencement; (c) by an order of a court
of competent jurisdiction, the Company is adjudicated insolvent or bankrupt; (d)
a custodian or receiver has been appointed for all or any substantial part of
its to the Company’s property, and such custodian or receiver is not discharged
or stayed within sixty (60) days from the appointment date thereof; (e)
under applicable law, the Company makes a general assignment for the benefit of
creditors; (f) the Company calls in writing a meeting of its creditors with a
view to arranging a composition, adjustment or restructuring of its debts; or
(g) the Company, by any act or failure to act, expressly in writing indicates
its consent to or approval of any of the foregoing or takes any corporate or
other action for the purpose of effecting any of the foregoing.

     

    “Business Day” means any day
except Saturday, Sunday and any day that is a federal legal holiday or a day on
which banking institutions in the State of New York are authorized or required
by law or other governmental action to close.

     

        “Common Stock” means the
common stock of the Company, $0.0001 par value per share, and any securities
into which such common stock may hereafter be reclassified.

     

    “Conversion Date” means the
date a Conversion Notice together with the Conversion Schedule is actually
received by the Company in proper and completed form in accordance with Section 6(a) of the
Note.

     

    “Conversion Notice” means a
written notice in the form attached hereto as Exhibit
A.

     

    “Conversion Price” means $.10
per share.

     

    “Default” means any event or
condition which constitutes an Event of Default or that upon notice, lapse of
time or both would, unless cured or waived, become an Event of
Default.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

         

       “Event of
Default” means any one of the following events (whatever the reason and
whether it shall be voluntary or involuntary or effected by operation of law or
pursuant to any judgment, decree or order of any court, or any order, rule or
regulation of any administrative or governmental body):

     

    (i) any
default in the payment, when the same becomes due and payable, of principal
under or interest in respect of this Note;

     

    (ii) the
Company experiences, an event of default (which has not been cured in accordance
with the terms thereof and is continuing) and acceleration of payment
obligations under, any currently existing or hereafter arising material
agreement, debenture (other than a Note) or any mortgage, credit agreement or
other facility, indenture agreement, factoring agreement or other instrument
under which there may be issued, or by which there may be secured or evidenced,
any Indebtedness or under any long term leasing or factoring arrangement, if the
aggregate amount of the obligations and liabilities of the Company under the
Indebtedness in such default exceeds  $100,000 (each of the foregoing,
a “Material Debt
Agreement”);

     

    (iii)           the
occurrence of a Bankruptcy Event; or

     

    (iv)           any
breach of any material covenant, agreement or representation and/or warranty in
any of the Transaction Documents (as described in the Purchase
Agreement)

     

    “Follow-On-Financing” shall
mean the offer and sale of securities of the Company.

     

    “Fundamental Transaction”
means the occurrence of any of the following in one or a series of related
transactions: (i) the Company effects any merger or consolidation of the Company
with or into another Person (other than a reincorporation and/or similar
transaction), (ii) the Company effects any sale of all or substantially all its
assets, (it being understood that a sale (but not a license (unless the license
results in the Company business and/or revenues resulting substantially from
licensing revenues)) of any patents related to the Company’s technology shall
constitute a Fundamental Transaction) .or (iii) any Person acquires at least
50.01% of the issued and outstanding voting stock of the Company.

     

    “Indebtedness” of any Person
shall mean, without duplication, (a) all obligations of such Person for borrowed
money or with respect to deposits or advances of any kind, (b) all
obligations of such Person evidenced by bonds, Notes, notes or similar
instruments, (c) all obligations of such Person upon which interest charges are
customarily paid, (d) all obligations of such Person under conditional sale or
other title retention agreements relating to property or assets purchased by
such Person, (e) all obligations of such Person issued or assumed as the
deferred purchase price of property or services (other than unsecured accounts
payable incurred in the ordinary course of business and no more than ninety (90)
days past the date of the invoice therefor), (f) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the obligations secured thereby have
been assumed, (g) all obligations of such Person in respect of interest rate
protection agreements, foreign currency exchange agreements or other interest or
exchange rate hedging arrangements that exceed amounts necessary to hedge the
Company’s cross-currency exposure, (h) all obligations of such Person as an
account party in respect of letters of credit and bankers’ acceptances, and (i)
the Indebtedness of any partnership in which such Person is a general
partner.

     

    “Original Issue Date” has the
meaning set forth on the face of this Note.

     

    “Person” means an individual
or corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or an
agency or subdivision thereof) or other entity of any kind.

     

    “Proceeding” means an action,
claim, suit, investigation or proceeding (including, without limitation, an
investigation or partial proceeding, such as a deposition), whether commenced or
threatened.

     

    “Underlying Shares” means the
Common Stock issuable upon conversion of the Notes.

     

    “Warrants” means the Common
Stock purchase warrants issued pursuant to the Purchase Agreement.

     

    “Warrant Shares” means the
shares of Common Stock issuable upon exercise of the Warrants.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2. Interest.

     

    (a)           The
Company shall pay interest in cash in United States dollars to the Investor on
the aggregate unconverted and then outstanding principal amount of this Note at
the rate of twelve percent (12%) per annum.  All interest shall accrue
and be payable on the maturity date, the interest will be payable in common
stock shares.  Interest shall be compounding and shall be calculated
on the basis of a 360-day year for the actual number of days elapsed and shall
accrue daily commencing on the Original Issue Date.

     

    (b)           Maximum Rate. In the
event that it is determined that, under the laws relating to usury applicable to
the Company or the indebtedness evidenced by this Note (the “Applicable Usury Laws”), the
interest charges and fees payable by the Company in connection herewith or in
connection with any other document or instrument executed and delivered in
connection herewith cause the effective interest rate applicable to the
indebtedness evidenced by this Note to exceed the maximum rate allowed by law
(the “Maximum Rate”),
then such interest shall be recalculated for the period in question and any
excess over the Maximum Rate paid with respect to such period shall be credited,
without further agreement or notice, to the principal amount outstanding
hereunder to reduce said balance by such amount with the same force and effect
as though the Company had specifically designated such extra sums to be so
applied to principal and the Investor had agreed to accept such extra payment(s)
as a premium-free prepayment. All such deemed prepayments shall be applied to
the principal balance payable at maturity. In no event shall any agreed-to or
actual exaction as consideration for this Note exceed the limits imposed or
provided by Applicable Usury Laws in the jurisdiction in which the Company is
resident applicable to the use or detention of money or to forbearance in
seeking its collection in the jurisdiction in which the Company is resident and
any funds received in excess of such limits shall be so applied as provided
herein or held in trust.

     

    3. Registration of
Notes.  The Company shall register the Note upon records
maintained by the Company for that purpose (the “Note Register”) in the name
of each record Investor thereof from time to time. The Company may deem and
treat the registered Investor of this Note as the absolute owner hereof for the
purpose of any conversion hereof or any payment of interest hereon, and for all
other purposes, absent actual notice to the contrary from such record
Investor.

     

    4. Registration of Transfers
and Exchanges.  The Company shall register the transfer of any
portion of this Note in the Note Register upon surrender of this Note to the
Company at its address for notice set forth herein. Upon any such registration
or transfer, a new Note, in substantially the form of this Note (any such new
note, a “New Note”),
evidencing the portion of this Note so transferred shall be issued to the
transferee and a New Note evidencing the remaining portion of this Note not so
transferred, if any, shall be issued to the transferring Investor. The
acceptance of the New Note by the transferee thereof shall be deemed the
acceptance by such transferee of all of the rights and obligations of a holder
of a Note.  The Company agrees that its prior consent is not required
for the transfer of any portion of this Note; provided, however, that the
Company shall be entitled to reasonable written assurance, including an opinion
of counsel reasonably acceptable to the Company that such transfer complies with
applicable federal and state securities laws.  This Note is
exchangeable for an equal aggregate principal amount of Note of different
authorized denominations, as requested by the Investor surrendering the same. No
service charge or other fee will be imposed in connection with any such
registration of exchange.

     

    5. Conversion.  All
or any portion of the principal amount of this Note outstanding at any time,
together with any accrued and unpaid interest hereunder, shall be convertible
into shares of Common Stock at the Conversion Price, at the option of the
Investor.  The Investor may effect conversions under this Section 5 by
delivering to the Company a Conversion Notice together with a schedule in the
form of Schedule
1 attached hereto (the “Conversion
Schedule”).  If the Investor is converting less than all of the
principal amount represented by this Note, the Company shall honor such
conversion and shall no later than three (3) Business Days thereafter, deliver
to the Investor a Conversion Schedule indicating the principal amount which has
not been converted and a new Note in the principal amount not so
converted.

     

    6. Mechanics of
Conversion.

     

    (a) The
number of Underlying Shares issuable upon any conversion hereunder shall equal
(i) the outstanding principal amount of this Note to be converted, together with
any accrued but unpaid interest upon such principal amount being converted,
divided by (ii)
the Conversion Price in effect on the Conversion Date.

     

    (b)  Conversion
Price adjustment, if the Company issues new stock within twenty-four months (24)
of executing this note at a price point below the conversion price as outlined
in this document, then the conversion price will be automatically modified to
reflect the new lower price per share.

     

    (c) The
Company shall no later than ten (10) Business Days following the Conversion Date
promptly issue or cause to be issued and cause to be delivered to or upon the
written order of the Investor and in such name or names as the Investor may
designate in the Conversion Notice, a certificate for the Underlying Shares
issuable upon such conversion.  The Investor, or any Person so
designated by the Investor in the Conversion Notice to receive Underlying
Shares, shall be deemed to have become holder of record of such Underlying
Shares as of such Conversion Date.

     

    (d) The
Investor must deliver the original Note (or a lost note certificate) in order to
effect a conversion hereunder.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    7. Events of
Default.

     

    (a) At any
time or times following the occurrence and during the continuance of an Event of
Default, the Required Investors may elect to declare, by written notice to the
Company (an “Event
Notice”), all or any portion of the outstanding principal amount of this
Note, due and payable.

     

    (b) Subject
to Section 7(a)
above, in connection with any Event of Default, the Investor need not provide
and the Company hereby waives any presentment, demand, protest or other notice
of any kind (other than the Event Notice), and the Investor may immediately
enforce any and all of its rights and remedies hereunder and all other remedies
available to it under applicable law. Any such declaration may be rescinded and
annulled by the Investor at any time prior to payment hereunder. No such
rescission or annulment shall affect any subsequent Event of Default or impair
any right consequent thereto.

     

    8. Ranking.  This
Note ranks junior to
the SBA $50,000 Century Bank Line of Credit Loan. This Note, together with all
other Notes now or hereafter issued pursuant to the Transaction Documents, shall
rank senior in all respects to all existing and hereafter created Indebtedness
of the Company.

     

    9. Reservation of Underlying
Shares.  Until the Maturity Date, commencing as of the date of
the Offering, the Company covenants that it will at all times reserve and keep
available out of the aggregate of its authorized but unissued and otherwise
unreserved Common Stock, solely for the purpose of enabling it to issue
Underlying Shares as required hereunder, the number of Underlying Shares which
are then issuable and deliverable upon the conversion of (and otherwise in
respect of) this entire Note, free from preemptive rights or any other
contingent purchase rights of persons other than the
Investor.  Assuming due and proper conversion of this Note, the
Company covenants that all Underlying Shares so issuable and deliverable shall,
upon issuance in accordance with the terms hereof, be duly and validly
authorized, issued and fully paid and nonassessable.

     

    10. Certain
Adjustments.  The Conversion Price is subject to adjustment
from time to time as set forth in this Section
10.

     

    (a) Stock Dividends and
Splits.  If the Company, at any time following the Offering and
while this Note is outstanding: (i) pays a stock dividend on its Common Stock or
otherwise makes a distribution on any class of capital stock that is payable in
shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into
a larger number of shares, or (iii) combines outstanding shares of Common Stock
into a smaller number of shares, then in each such case the Conversion Price
shall be multiplied by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding immediately before such event and of which
the denominator shall be the number of shares of Common Stock outstanding
immediately after such event.  Any adjustment made pursuant to clause
(i) of this paragraph shall become effective immediately after the record date
for the determination of shareholders entitled to receive such dividend or
distribution, and any adjustment pursuant to clause (ii) or (iii) of this
paragraph shall become effective immediately after the effective date of such
subdivision or combination.

     

    (b) Pro Rata
Distributions.  If the Company, at any time following the
Offering and while this Note is outstanding, distributes to all holders of
Common Stock any security, asset(s) or other property of the Company (in each
case, “Distributed
Property”), then upon any conversion of this Note, the Investor shall be
entitled to receive, in addition to the Underlying Shares otherwise issuable
upon such conversion, the Distributed Property that the Investor would have been
entitled to receive in respect of such number of Underlying Shares had the
Investor been the record holder of such Underlying Shares immediately prior to
the record date for any distribution of Distributed
Property.  Notwithstanding the foregoing, this Section 10(b) shall
not apply to any distribution of rights or securities in respect of adoption by
the Company of a shareholder rights plan, which events shall be covered by Section
10(a).

     

    (c) Reclassifications; Share
Exchanges.  At any time following the Offering and while this
Note is outstanding, in case of any reclassification of the Common Stock, or any
compulsory share exchange pursuant to which the Common Stock is converted into
other securities, cash or property (other than compulsory share exchanges which
constitute Change of Control transactions), the Investors of the Notes then
outstanding shall have the right thereafter to convert such shares only into the
shares of stock and other securities, cash and property receivable upon or
deemed to be held by holders of Common Stock following such reclassification or
share exchange, and the Investors shall be entitled upon such event to receive
such amount of securities, cash or property as a holder of the number of shares
of Common Stock of the Company into which such shares of Notes could have been
converted immediately prior to such reclassification or share exchange would
have been entitled. This provision shall similarly apply to successive
reclassifications or share exchanges.

     

    (d) Calculations.  All
calculations under this Section 10 shall be
made to the nearest cent or the nearest 1/100th of a share, as applicable. The
number of shares of Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Company, and the disposition
of any such shares shall be considered an issue or sale of Common
Stock.

     

    (e) Notice of
Adjustments.  Upon the occurrence of each adjustment pursuant
to this Section
10, the Company at its expense will promptly compute such adjustment in
accordance with the terms hereof and prepare a certificate describing in
reasonable detail such adjustment and the transactions giving rise thereto,
including all facts upon which such adjustment is based. Upon written request,
the Company will promptly deliver a copy of each such certificate to the
Investor.

     

    (f) Notice of Corporate
Events.  If, at any time while this Note is outstanding, the
Company (i) declares a dividend or any other distribution of cash, securities or
other property in respect of its Common Stock, (ii) authorizes and publicly
approves, or enters into any agreement contemplating or solicits shareholder
approval for any Fundamental Transaction, or, (iii) issues Additional Stock
(hereafter defined) (iii) publicly authorizes in writing the voluntary
dissolution, liquidation or winding up of the affairs of the Company, then the
Company shall deliver to the Investor a notice describing the material terms and
conditions of such transaction, at least 20 calendar days prior to the
applicable record or effective date on which a Person would need to hold Common
Stock in order to participate in or vote with respect to such transaction;
provided, however, that the failure to deliver such notice or any defect therein
shall not affect the validity of the corporate action required to be described
in such notice.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    11. Fractional
Shares.  The Company shall not be required to issue or cause to
be issued fractional Underlying Shares on conversion of this Note. If any
fraction of an Underlying Share would, except for the provisions of this
Section, be issuable upon conversion of this Note or payment of interest hereon,
the number of Underlying Shares to be issued will be rounded to the nearest
whole share.

     

    12. Notices.  Any
and all notices or other communications or deliveries hereunder (including
without limitation any Conversion Notice) shall be in writing and shall be
deemed given and effective on the earliest of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
specified in this Section prior to 5:30 p.m. (New York City time) on a Business
Day, (ii) the next Business Day after the date of transmission, if such notice
or communication is delivered via facsimile at the facsimile number specified in
this Section on a day that is not a Business Day or later than 5:30 p.m. (New
York City time) on any Business Day, (iii) the Business Day following the date
of mailing, if sent by nationally recognized overnight courier service, or (iv)
upon actual receipt by the party to whom such notice is required to be given.
The addresses for such communications shall be: (i) if to the Company, to100
Cummings Center, Suite 421E, Beverly, MA 01915,
facsimile:  978-878-9505, attention: Chief Financial Officer, (ii) if
to the Placement Agent, to Hallmark Investments, Inc. 420 Lexington Avenue,
8th
Floor, New York, NY  10170, facsimile: (212) 661-2055 and (iii) if to
the Investor, to the address or facsimile number appearing on the Company's
shareholder records or such other address or facsimile number as the Investor
may provide to the Company in accordance with this Section.

     

    13. Miscellaneous.

     

    (a) This Note
shall be binding on and inure to the benefit of the parties hereto and their
respective successors and assigns that are permitted pursuant to this
Note.

     

    (b) Subject
to Section
13(a), above, nothing in this Note shall be construed to give to any
person or corporation other than the Company and the Investor any legal or
equitable right, remedy or cause under this Note. This Note shall inure to the
sole and exclusive benefit of the Company and the Investor.

     

    (c) All
questions concerning the construction, validity, enforcement and interpretation
of this Note shall be governed by, construed and enforced solely and exclusively
in accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of law thereof.  Each party agrees that
all Proceedings shall be commenced exclusively in the state and federal courts
sitting in the County, City and State of New York, (the “New York
Courts”).  Each party hereto hereby irrevocably agrees and
submits to the exclusive jurisdiction of the New York Courts for any Proceeding,
and hereby irrevocably waives, and agrees not to assert in any Proceeding, any
claim that it is not personally subject to the jurisdiction of any New York
Court or that a New York Court is an inconvenient forum for such
Proceeding.  Each party hereto hereby irrevocably waives personal
service of process and consents to process being served in any such Proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Note and agrees that such service shall constitute good and
sufficient service of process and notice thereof.  Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law.  Each party hereto hereby irrevocably waives,
to the fullest extent permitted by applicable law, any and all right to trial by
jury in any legal Proceeding.  The prevailing party in a Proceeding
shall be reimbursed by the other party for its reasonable attorneys’ fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such Proceeding.

     

    (d) The
headings herein are for convenience only, do not constitute a part of this Note
and shall not be deemed to limit or affect any of the provisions
hereof.

     

    (e) In case
any one or more of the provisions of this Note shall be invalid or unenforceable
in any respect, the validity and enforceability of the remaining terms and
provisions of this Note shall not in any way be affected or impaired
thereby.

     

    (f) No
provision of this Note may be waived or amended except (i) in accordance with
the requirements set forth in the Purchase Agreement, and (ii) in a written
instrument signed, in the case of an amendment, by the Company and the Investor
or, in the case of a waiver, by the party against whom enforcement of any such
waiver is sought. No waiver of any default with respect to any provision,
condition or requirement of this Note shall be deemed to be a continuing waiver
in the future or a waiver of any subsequent default or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
either party to exercise any right hereunder in any manner impair the exercise
of any such right.

     

    (g) To the
extent it may lawfully do so, the Company hereby agrees not to insist upon or
plead or in any manner whatsoever claim, and will resist any and all efforts to
be compelled to take the benefit or advantage of, usury laws wherever enacted,
now or at any time hereafter in force, in connection with any claim, action or
Proceeding that may be brought by any Investor in order to enforce any right or
remedy under the Notes. Notwithstanding any provision to the contrary contained
in the Notes, it is expressly agreed and provided that the total liability of
the Company under the Notes for payments in the nature of interest shall not
exceed the Maximum Rate, and, without limiting the foregoing, in no event shall
any rate of interest or default interest, or both of them, when aggregated with
any other sums in the nature of interest that the Company may be obligated to
pay under the Notes exceed such Maximum Rate. It is agreed that if the maximum
contract rate of interest allowed by law and applicable to the Notes is
increased or decreased by statute or any official governmental action subsequent
to the date hereof, the new maximum contract rate of interest allowed by law
will be the Maximum Rate of interest applicable to the Notes from the effective
date forward, unless such application is precluded by applicable law. If under
any circumstances whatsoever, interest in excess of the Maximum Rate is paid by
the Company to any Investor with respect to indebtedness evidenced by the Notes,
such excess shall be applied by such Investor to the unpaid principal balance of
any such indebtedness or be refunded to the Company, the manner of handling such
excess to be at such Investor’s election.

     

    (h)           All
rights and benefits, including, but not limited to, the right to receive notice
of certain events set forth in the Purchase Agreement, are expressly
incorporated by reference into this Note as if made directly in this
Note.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

        

    IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly
authorized officer as of the date first above indicated.

     

    INVO BIOSCIENCE, INC

     

    By:           

     

               Name:
Kathleen T. Karloff

     

               Title:
Chief Executive Officer

     

    Name of
Investor:

     

    Principal
Amount of This Note:  $100,000

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A

     

    CONVERSION
NOTICE

     

     (To
be Executed by the Registered Investor

     

    in order
to convert Notes)

     

    The
undersigned hereby elects to convert the principal amount of Note indicated
below, into shares of Common Stock of INVO Bioscience, Inc., as of the date
written below. If shares are to be issued in the name of a Person other than
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto and is delivering herewith such certificates and opinions as reasonably
requested by the Company in accordance therewith. No fee will be charged to the
Investor for any conversion, except for such transfer taxes, if any. All terms
used in this notice shall have the meanings set forth in the Note.

     

    

    
      	
               
      

            	
              Conversion
      calculations:

            

    

    
      	
               
      

            	
              Date
      to Effect Conversion

            

    

     

    
      	
               
      

            	 

    

    
      	
               
      

            	
              Principal
      amount of Note owned prior to
conversion

            

    

     

    
      	
               
      

            	 

    

     

    
      	
               
      

            	
              Principal
      amount of Note to be Converted

            

    

     

    

     

    
      	
               
      

            	 

    

     

    
      	
               
      

            	
              Aggregate
      amount of Interest to be Converted

            

    

     

    
      	
               
      

            	 

    

     

    
      	
               
      

            	
              Principal
      amount of Note remaining after
Conversion

            

    

     

    

    
      	
               
      

            	 

    

     

    
      	
               
      

            	
              Number
      of shares of Common Stock to be
Issued

            

    

     

    
      	
               
      

            	
              $0.10 per Common Stock
      share

            

    

     

    
      	
               
      

            	
              Applicable
      Conversion Price

            

    

     

    
      	
               
      

            	 

    

     

    
      	
               
      

            	
              Name
      of Investor

            

    

     

    
      	
               
      

            	
              By:

            	 	 

    

     

    
      	
               
      

            	
              Name:

            

    

     

    
      	
               
      

            	
              Title:

            

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Schedule
1

     

    INVO
Bioscience, Inc.

     

    10%
Senior Secured Convertible Promissory Notes

     

    CONVERSION
SCHEDULE

     

    This
Conversion Schedule reflects conversions made under the above referenced
Notes.

     

    Dated:

    

    
      	
              Date
      of Conversion

            	
              Amount
      of Conversion (Including Interest)

            	
              Aggregate
      Principal Amount Remaining Subsequent to Conversion

            	
              Applicable
      Conversion Price

            
	 
      	 
      	 
      	
              $0.10

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