Fuel Systems Solutions, Inc. Enters Into Agreement to Acquire Alternative Fuel Systems (2004) Inc.

Fuel Systems Solutions, Inc. through its wholly owned subsidiary IMPCO Technologies, Inc. and Alternative Fuel Systems announced that they have entered into a support agreement pursuant to which IMPCO has agreed to offer to acquire, directly or indirectly, all of the outstanding common shares of AFS for Cdn.$0.50 in cash per share (the “Offer”). The purchase price under the Offer represents a 66.7% premium over the average closing price for the last 20 trading days of Cdn.$0.30. The transaction is valued at approximately Cdn.$9.4 million.

Following a thorough review by the board of directors of AFS, consultation with its financial and legal advisors and upon recommendation of the special committee of the board of directors, the board of directors of AFS has unanimously determined that the Offer is fair to the shareholders of AFS and is in the best interests of AFS and its shareholders, and unanimously recommends that shareholders of AFS accept the Offer.

Matthew Beale, Fuel Systems’ Co-President and Head of IMPCO Operations, said, “The acquisition of AFS will expand our technology platform and enhance our ability to address the high-growth commercial vehicle and stationary engine markets in Asia. Having partnered with AFS in the past, we have grown to admire their capabilities and perceive a strong cultural fit with our organization.”

Jim Perry, CEO of AFS, said, “While the strategic logic of the combination is compelling, we believe that the fully financed cash offer and attractive premium offers our shareholders outstanding value. We look forward to joining the Fuel Systems team and accelerating our growth strategy as part of a leading global player in our industry.”

AltaCorp Capital Inc. acted as advisor to the special committee of the board of AFS and provided an opinion that, as of the date hereof, the consideration to be received by AFS shareholders pursuant to the Offer is fair, from a financial point of view, to the AFS shareholders.

Concurrently with the execution of the Support Agreement, the directors and officers of AFS, as well as Remington Development Corporation, AFS’s largest shareholder, entered into lock-up agreements with IMPCO, pursuant to which they have agreed to deposit all AFS shares (including shares issuable upon exercise of any options held) under the Offer. The locked up shareholders own, in the aggregate 4,056,560 AFS shares and 968,000 options, representing approximately 26.5% of the AFS Shares on a fully diluted basis.

The Offer will be made in the form of a take-over bid. AFS has agreed to pay a non-completion fee of Cdn.$471,000 to IMPCO and to reimburse IMPCO for its expenses up to Cdn.$400,000 under certain circumstances. The Support Agreement also contains customary non-solicitation covenants and AFS has reserved the right to respond to superior proposals if certain conditions are met, subject to IMPCO’s right to match any such superior proposal.

The Offer will be subject to customary conditions, including at least two-thirds of the outstanding shares of AFS on a fully diluted basis having been validly deposited under the Offer and not withdrawn.

The full and important details of the Offer will be included in the formal offer and takeover bid circular, which is expected to be mailed to shareholders in the next 10 days, together with a directors’ circular which will set out the board of directors’ unanimous recommendations that shareholders accept the Offer. Once mailed, the take-over bid circular and the directors’ circular will be available on SEDAR at www.sedar.com.