Exhibit 10.1

 

Clean Diesel Technologies, Inc.

 

DIRECTOR’S

CONVERTIBLE PROMISSORY NOTE

 

Principal Amount US$500,000.00

 

Oxnard, California

 

 

April 11 2016

 

For value received, the undersigned Clean Diesel Technologies, Inc., a Delaware
corporation (“Maker”), promises to pay to Lon E. Bell, Ph.D (“Payee”), or order,
the principal sum of 500 Hundred Thousand Dollars ($500,000.00), together with
interest at the rate hereinafter provided for on the unpaid principal balance of
this promissory note (this “Note”) from time to time outstanding until paid in
full.

 

Interest shall accrue on the unpaid and outstanding principal balance of this
Note commencing on the date hereof and continuing until repayment of this Note
in full at a rate per annum equal to Eight Percent (8.00%). The principal, along
with any accrued but unpaid interest shall be due and payable in full on
September 30, 2017 (the “Maturity Date”). This Note shall bear no prepayment
penalty.

 

Maker shall make all payments hereunder to Payee in lawful money of the United
States and in immediately available funds. Payments shall be applied first to
accrued and unpaid interest, then to principal.

 

Payee shall have the right to convert the principal balance of this Note and any
accrued interest thereon at any time before payment by written notice exercising
his optional right to convert the principal balance and any accrued interest
into the common stock of Maker at a conversion price equal to the lower of the
closing price of Maker on the date before the date of this Note or as of the
date when Payee sends written notice to Maker exercising his conversion right. 
Maker shall have the right to mandatorily convert the principal balance of this
Note plus any accrued interest into the common stock of Maker upon the Maturity
Date at a conversion price equal to the lower of the closing price of Maker on
the date before the date of this Note or the Maturity Date.  Maker shall also
have the right to mandatorily convert the principal amount of this Note plus
accrued interest concurrently with the closing of a Liquidity Event at a
conversion price equal to the lower of the closing price of Maker as of the date
immediately before the date of this Note or at a 25% discount to the Liquidity
Event price. A Liquidity Event shall be defined as a strategic investment in
Maker or a public stock offering by Maker.

 

The maturity of this Note may be accelerated by Payee upon the occurrence of any
one or more of the following:

 

(a)           A breach or default by Maker of any of the terms, conditions or
covenants of this Note or any other agreement of Maker with Payee or its
affiliates;

 

(b)           The institution by Maker of proceedings to be adjudicated as
bankrupt or insolvent, or the consent by it to institution of bankruptcy or
insolvency proceedings against it or the filing by it of a petition or answer or
consent seeking reorganization or release under the federal Bankruptcy Act, or
the consent by it to the filing of any such proceeding; or

 

--------------------------------------------------------------------------------

 

(c)           If, within sixty (60) days after the commencement of an action
against Maker (and service of process in connection therewith on Maker) seeking
any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar
relief under any present or future statute, law or regulation, such action shall
not have been resolved in favor of Maker or all orders or proceedings thereunder
affecting the operations or the business of Maker stayed, or if the stay of any
such order or proceeding shall thereafter be set aside, or if, within sixty (60)
days after the appointment without the consent or acquiescence of Maker of any
trustee, receiver or liquidator of Maker or of all or any substantial part of
the properties of Maker, such appointment shall not have been vacated.

 

Maker waives presentment, demand, notice of demand, protest, notice of protest
or notice of nonpayment in connection with the delivery, acceptance,
performance, default or enforcement of this Note or of any document or
instrument evidencing any security for payment of this Note.

 

Failure at any time to exercise any of the rights of Payee hereunder shall not
constitute a waiver of such rights and shall not be a bar to exercise of any of
such rights at a later date.

 

Maker agrees to pay all reasonable costs of collection and enforcement of this
Note, including but not limited to reasonable attorney’s fees and disbursements,
whether or not any lawsuit or other legal action is instituted to enforce this
Note, including without limitation if Payee seeks the advice or assistance of an
attorney as a result of or in connection with any default, or if Maker becomes
the debtor or otherwise becomes the subject of any bankruptcy, insolvency or
other proceeding for the readjustment of indebtedness.

 

No addition to or amendment of this Note shall be admissible, enforceable or
effective unless it is set forth in a writing duly executed by the party against
whom the addition or amendment is sought to be enforced.

 

Nothing contained in this Note shall be deemed to require the payment of
interest or other charges by Maker or any other person in excess of the amount
which the Payee may lawfully charge under the applicable usury laws. In the
event that Payee shall collect moneys which are deemed to constitute interest
which would increase the effective interest rate to a rate in excess of that
permitted to be charged by applicable law, all such sums deemed to constitute
interest in excess of the legal rate shall be credited against the principal
balance of this Note then outstanding, and any excess shall be returned to
Maker.

 

This Note will be governed by and construed under the laws of the State of
California. In any action brought under or arising out of this Note, the Maker
hereto hereby consents to the jurisdiction of any competent court within the
State of California and consents to service of process by any means authorized
by the laws of the State of California.

 

IN WITNESS WHEREOF, the undersigned has caused this Note to be duly executed in
California.

 

 

Maker:

 

 

 

CLEAN DIESEL TECHNOLOGIES, INC.

 

 

 

 

 

By:

 /s/ David Shea

 

 

Name: David Shea

 

 

Title: Chief Financial Officer

 

--------------------------------------------------------------------------------