Exhibit 10.1

                               LICENSE AGREEMENT(1)
                               --------------------

THIS  AGREEMENT  made  and  entered  into of this 13th day of July, 2001, by and
between  Clean  Diesel  Technologies, Inc., a corporation organized and existing
under  the  laws  of  the  State of Delaware, having its principal office at 300
Atlantic  Street,  Stanford,  Connecticut,  U.S.A.  (hereinafter  referred to as
"Licensor")  and  Mitsui & Co., Ltd., a corporation organized and existing under
the  laws  of  Japan,  having  its  principal  office at 2-1, Ohtemachi 1-chome,
Chiyoda-ku,  Tokyo,  Japan  (hereinafter  referred  to  as  "Licensee"),

------------
1.  Portions  of  this  exhibit  denoted  with  three  asterisks (***) have been
omitted  pursuant  to  a  request  for  confidential  treatment.

                                   WITNESSETH:
                                   -----------

WHEREAS,  Licensor  has  developed  and  owns a certain patented system for urea
injection  with  the trademark "ARIS 2000" which reduces oxides of nitrogen from
the  emissions  of  diesel engines (hereinafter referred to as the "System") and
has  the  exclusive  right  to  grant  a  license  with  respect  to the System;

WHEREAS,  Licensee desires to manufacture and sell the Products as defined below
for  the diesel engine market, excepting the mobile engine market, in Japan, and

WHEREAS,  Licensee  desires  to  obtain,  and  Licensor  is willing to grant, an
exclusive  license to manufacture, sub-license, use, sell and lease the Products
within  such  market  in  Japan.

NOW,  THEREFORE,  the  parties  hereto  agree  as  follows:


                                    Article I
                                   Definitions
                                   -----------

1.01     Definitions
         -----------
As  used  in  this  Agreement,  the  following  terms  shall  have the following
respective  meanings:

     (a)  "Dollar"  or  the  symbol  "$"  shall  mean the currency of the United
          States  of  America.

     (b)  "Effective  Date"  shall  mean  the  date  first  written  above.

     (c)  "Federal Rate" shall mean the monthly rate of interest as published by
          the  Internal Revenue Service of USA pursuant to Internal Revenue Code
          Section  7520.

     (d)  "Field"  shall  mean  the  diesel  engine market, excepting the mobile
          engine  market,  in  Japan.


<PAGE>
     (e)  "Improvement"  shall  mean  any  new invention or change in the System
          made  or  developed by Licensor, Licensee, or its sublicensees whether
          patentable  or  not, provided that the System, after such invention or
          change,  is  substantially  similar  to  the  System.

     (f)  "Intellectual  Property"  shall  mean:
          (i)  All Patents, Improvements and patent applications and rights with
               respect  to  the  System;  and
          (ii) All trademarks with respect to the System as provided in Schedule
               A.
     (g)  "Net Selling Price" shall mean, in relation to royalties under Section
          5.01, the gross selling price of the Products as billed by Licensee or
          its sublicensees, less the following items to the extent that they are
          included  in  the  gross  selling  price  of  the  Products;
          (i)    sales,  excise  and  added  value  taxes;
          (ii)   customs  duties;
          (iii)  packaging,  transportation,  insurance  and  warehouse charges;
          (iv)   trade  and  quantity  discounts;  and
          (v)    credits  for  returned  Products.

     (h)  "Patents"  shall mean all Japanese patents or patent applications with
          respect  to  the  System  as  provided  in  Schedule  A.

     (i)  "Products"  shall mean the manufactured device of the System including
          injector,  sensors,  pump, valves, controls and software but excluding
          tankage,  catalyst,  engineering  and  installation.  -

     (j)  "Proprietary  Information"  shall mean all confidential information or
          other  material  including  trade  secrets,  business  and  technical
          information  and  data  regardless of its form, which is designated by
          the  party disclosing such information as confidential or proprietary.
          Provided,  however,  Proprietary  Information  shall  not include such
          information  if  such  information;
          (i)   was  known  to  party  receiving  the  information  (hereinafter
                referred to as the "receiving party") at the time of disclosure;
          (ii)  is  now  or becomes hereafter available to the public through no
                fault  of  the  receiving  party;
          (iii) may  be  hereafter  acquired by the receiving party from a third
                party  without  any  obligation  of  secrecy;
          (iv)  is ndependently developed by the receiving party without making
                use of  any  confidential information as shown by documentation.

     (k)  "Technical  Information"  shall  include Intellectual Property and all
          data,  designs,  software  and information in any form with respect to
          the  System.

     (l)  "Term"  shall  mean  the  period from the Effective Date to the latest
          date  of  expiry  of  the Patents unless sooner terminated pursuant to
          this  Agreement.


<PAGE>
                                   Article II
                                Grant of License
                                ----------------

2.01  Grant  of  License
      ------------------
     (a)  Licensor hereby grants Licensee an exclusive license of the System and
          Technical Information to manufacture, sub-license, use, sell and lease
          the  Products  within  the  Field  for  the  Term.
     (b)  Licensee  and  its  sublicensees may not solicit or procure sales from
          locations outside of Japan and Licensee and its sublicensees shall not
          knowingly  sell  to any third party who intends directly or indirectly
          to  export Products out of Japan unless such third party is a licensee
          or  permitted sublicensee of Licensor in the territory out of Japan to
          which  such  Products  are  to  be  exported.

2.02  Option  for  Mobile  License
      ----------------------------
     (a)  Subject  to execution and delivery of this License by both parties and
          payment  by  Licensee  to  Licensor  on  the  Effective  Date  of  the
          additional  sum  of  $***,  Licensee shall have an option until *** to
          enter  into a License from Licensor for the additional field of use of
          mobile  diesel  engines  in  Japan. "Mobile" shall mean diesel engines
          mounted  on vehicles, including on-road, off-road, marine and railroad
          uses.  Licensee shall exercise this option by notice to Licensor on or
          before *** stating its intention to exercise the option. The terms and
          conditions  of  the  mobile  license  shall  provide  for  a mandatory
          up-front license fee to Licensor in the amount of $*** and the payment
          of  unit  royalties  to  be  mutually  agreed.  The License shall also
          contain  other  terms and conditions substantially similar to those of
          this  License.  The License shall be executed and delivered within ***
          days  of  Licensee's  notice  of exercise or this option shall expire.

2.03  Sub-License
      -----------
Subject  to  payment  by  Licensee  to  Lincensor  of  the sub-license condition
provided  in  Schedule  B,  Licensee may grant a non-exclusive sublicense of the
System  to  any  third  party  to the extent of the license granted hereunder in
Japan,  provided  that Licensee shall ensure that the sublicense agreement to be
entered  into  between Licensee and sublicensee and shall require sublicensee to
report  sales  of the Product, and to be subject to audit by Licensee, under the
same  terms  ad  provided  in  this  Agreement  and  to pay to Licensee the same
royalties  and  fees  otherwise  payable  hereunder  by  Licensee to Licensor as
provided  in Schedule B. Licensee shall notify the Licensor of such sublicensing
within  ten  (10) days of entering into a sublicense agreement. Sublicensees may
not  sub-license.  Sublicensees  may not assign their sublicensees or any rights
thereunder.

2.04  Non-Exclusivity
      ---------------
2.04 Licensee  is  obligated to fulfill target royalty amounts of $***, $*** and
     $***  in,  respectively,  the  years  ending  on  the  ***,  ***,  and  ***
     anniversaries  of  this License and Licensor shall have the right to render
     the  License  non-exclusive  when the royalty amount in each such year does
     not reach to the target royalty amount. However, Licensor shall first grant
     the  Licensee  the  opportunity  to  make  voluntary  payments  in order to
     maintain  exclusivity.  Licensor and Licensee will review the target amount
     for  each  year within *** days after the *** anniversary of this agreement
     and  may  make  adjustments  subject  to  mutual  agreement.


<PAGE>
                                   Article III
           Transfer of Technical Information and Technical Assistance
           ----------------------------------------------------------

3.01  Transfer
      --------
Within  ninety  (90) days of the Effective Date, Licensor shall, at its own cost
and  expense, furnish Licensee with Technical Information by providing copies of
Technical  Information  by  mail  and  other methods agreed upon by the parties.
Licensor  shall  notify  Licensee  writing or e-mail when such transfer has been
made, and Licensee shall confirm such transfer by written notice upon receipt of
Technical  Information.

3.02  Technical  Assistance
      ---------------------
     (a)  Upon  reasonable  request of Licensee, Licensor shall send to Licensee
          qualified  personnel  of  Licensor  in  order  to  render  technical
          assistance  and services to Licensee for a period to be agreed upon by
          the  parties hereto. All expenses with respect to the dispatch of such
          personnel,  including  but  not  limited  to  traveling  expenses  and
          reasonable  living  expenses  but  excluding  salary  and  head office
          overhead  expenses,  shall  be paid by Licensee. Such assistance shall
          not  involve  more  than  two  visits per year or involve more than 10
          Mandays  per  year  only  for the first two years of the Agreement and
          only  if  other  methods  of  assistance  are  not  practical.
     (b)  Upon request of Licensee, Licensor shall permit a reasonable number of
          employees  of  the  Licensee  and/or  its  sublicensees  to  visit the
          facilities  of  Licensor where products with respect to the System are
          manufactured,  in  order  to  observe  the procedures of Licensor. All
          expenses  with  respect  to  such  visits  shall  be paid by Licensee.

3.03  Marketing  Assistance
      ---------------------
Licensor  and  Licensee shall discuss methods of marketing the System and/or the
Products within Japan, and Licensor shall inform Licensee of potential customers
of  the  Products  in  Japan.

                                   Article IV
                                    Royalties
                                    ---------

4.01  Royalties
      ---------
     (a)  In  consideration of all licenses and other rights granted by Licensor
          hereunder,  Licensee  shall  pay  to  Licensor  the  following  fees:
          (1)  an upfront license fee of ($495,000) four hundred and ninety five
               thousand  dollars including $***,which has paid to Licensor under
               the  Letter of Intent on 5th June, 2000, shall be regarded a part
               of  upfront  license  fee.  The  reminder, $***, shall be paid as
               follows;  $*** shall be paid on the Effective date and $*** shall
               be  paid  ***  days  after  the  Effective  Date;  and
          (2)  Running  royalties,  exhibited  in  Schedule  B, shall be paid by
               Licensee  and  sublicensee  to Licensor *** within *** days after
               each  ***  of  Licensee's  fiscal  year.
     (b)  Licensor  and  Licensee  shall  review  Running  Royalties  set out in
          Schedule  B  two  years from the Effective Date and every year on said
          date  thereafter  in  order  to  adjust  such amounts based on current
          market  conditions  subject  to  mutual  agreement.  Any  increase  or
          decrease  of the Running Royalty shall not cause any adjustment of the
          minimum  royalty  payments  as  stipulated  in  2.04  above.
     (c)  In  the  event  Licensee fails to pay Licensor the royalty provided in
          this  Section  4.01(a)(2) above, Licensor may terminate this Agreement
          or  render  the license granted to Licensee hereunder as non-exclusive
          after  giving  Licensee  written  notice  of  such  measure. Provided,
          however,  that  when  Licensee  disburses  to  Licensor the balance of
          royalty  due  within  ***


<PAGE>
          days of such notice, Licensee shall maintain the exclusive license and
          other  rights  granted  to  Licensee  herein.
     (d)  All  payments  set  forth in this Section 4.01 shall be carried out by
          wire  transfer  to  such  bank  account  of  Licensor as designated by
          Licensor.

4.02  No  Withholding
      ---------------
Licensee  shall  pay  the full amount of Royalties due hereunder regardless of a
withholding  tax,  if  any,  which  may from time to time be levied, assessed or
required  to be withheld and paid for the account of Licensor and Licensee shall
itself  bear  the  cost  of  such withholding tax. Licensee shall at the time of
royalty  payments  to  Licensor  provide  to  Licensor  appropriate  documentary
evidence  of  the  payment  by it of such withholding tax, if any, applicable to
such  royalty  payment;  provided, however, royalties due from Licensee shall be
increased  by  the amount of any withholding tax lawfully levied by the Japanese
tax  authorities  on any amount due to Licensor above those provided in Schedule
B.  When  Licensee deducts and pays any such tax, it shall without delay send to
Licensor  the  official  certificate  of  such  tax  payment.

4.03  Delinquency  Charges
      --------------------
In  event that payment of royalties as defined in Section 4.01 above is not made
within  thirty (30) days of the due date of payment, Licensee shall pay Licensor
delinquency  charges  at  the  Federal  Rate until such payment is made in full.


4.04  Non-Payment  and  Termination
      -----------------------------
***  days after notice to Licensee of Licensee's failure to pay Licensor amounts
due  hereunder,  Licensor  may  by  notice  to  Licensee terminate this License,
whereupon  this  License  shall be of no further force and effect except for the
obligation  of  Licensee  to pay to Licensor such amounts as are due to Licensor
through  such  termination.

                                    Article V
                             Accounting and Reports
                             ----------------------

5.01  Books  and  Records
      -------------------
Licensee  shall,  at its principal place of business as defined above, keep full
and accurate records of the Products sold hereunder and other sufficient details
in  accordance  with generally accepted accounting principles in Japan to enable
the  calculation  of  the  amount of royalties payable to Licensor in accordance
with  generally  accepted  accounting  principles.  Licensor shall, upon notice,
permit  the  said  records  to  be  examined from time to time by an independent
accountant  or  accounting firm appointed by Licensor during reasonable business
hours  with prior written notice to the extent necessary to calculate the amount
of  royalties  to  be  paid to Licensor, provided that such examination shall be
made  at  the  expense  of  the  Licensor.

5.02  Reports
      -------
Each  quarterly payment of royalties made by Licensee to Licensor as provided in
Section  4.01 shall be accompanied by a written report containing information of
each  sale  made  by  Licensee  or


<PAGE>
sublicensee  during  such  quarter, including names of customers, date of sales,
invoice  numbers,  quantity  of  the  Products,  sales  prices.

5.03  Examination
      -----------
Licensee  shall,  upon reasonable notice, make the books and records as referred
to  in  clause  4.01  above  available  for  inspection  by  duly  authorized
representatives  of  Licensor.  Moreover,  Licensor  may,  not more than once in
twelve  months,  have  such books and records audited by a certified independent
public  accountant  or  accounting  firm  selected  by  Licensor and approved in
writing  by  Licensee  which approval shall not unreasonably be withheld, at the
expense  of  Licensor. Nothing herein shall be interpreted to mean that Licensor
shall have access to or the right to examine other business records of Licensee.
Licensor  shall  treat  any  information  obtained  pursuant  to  this clause as
confidential  and  its  accountant  or accounting firm shall undertake to do the
same.

                                   Article VI
                                   Improvement
                                   -----------

6.01  Title  and  License  of  Improvement
      ------------------------------------
The  party  hereto  whose  employees  or  agents have invented or developed such
Improvement  shall  possess all rights including but not limited to applying for
patents,  trade  marks,  granting  licenses  and  other  titles  related to such
Improvement.  Where  Licensor  shall have developed and shall be the owner of an
Improvement,  Licensee  shall  have a royalty-free right and license in Japan to
make,  use  and  sell  such Improvement according to the terms and conditions of
this  License.  Where  Licensee  shall  have  developed  and  be the owner of an
Improvement, Licensor shall have a perpetual, royalty-free, world-wide right and
license  to  such  Improvement.

6.02  Improvement  With  Other  Party
      -------------------------------
An  Improvement, if any, developed jointly or developed individually and without
the  participation  of  the  other party but with respect to the Patent shall be
owned  by  Licensor  but Licensee shall have a royalty free right and license to
make  use  and  sell  such  Improvement  in  Japan  according  to  the terms and
conditions  of  this  License.

6.03  No  License  Implied  to  Other  Technology
      -------------------------------------------
The  title  and  License  to  Improvements provided in Section 6.02 above to the
parties shall in itself imply no right or license whatsoever in any party to any
other  Technology  after  termination  of  the  Term  if required to practice an
Improvement  in  a  particular  territory  even though the lack of such right or
license  may  render  the  Improvement  valueless  in  the  hands  of  a  party.

                                   Article VII
                         Representations and Warranties
                         ------------------------------

7.01  General  Representations  and  Warranties
      -----------------------------------------
Each  party  represents  and  warrants  to  the  other  that it is a corporation
established and existing under the laws of incorporation and possesses corporate
power  and  authority  to  execute,  deliver  and  perform  this  Agreement.

7.02  Representations With  Respect to Intellectual Property
      ------------------------------------------------------
Licensor  hereby  makes the following representations, warranties and covenants,
and  acknowledges  that Licensee has relied thereon upon entering this Agreement
that:


<PAGE>
     (a)  Licensor  is  the sole and exclusive owner of the Patents excepting as
          identified  in Schedule A and Technical Information, and possesses the
          exclusive  right  to  grant  the  license  granted  hereunder  and has
          executed  no  agreement or taken any action in conflict herewith or in
          derogation  of  the  license  and  other  rights  granted  to Licensee
          hereunder;
     (b)  to  the  best  of  Licensor's  knowledge and belief, the System and/or
          Technical  Information  does not infringe any patents or rights of any
          third  party;
     (c)  to  the  best  of  Licensor's  knowledge  and  belief,  the  patent
                                                                       ------
          applications are valid under the relative laws of Japan, and there are
          ------------
          no  actions,  suits  or  proceedings  pending  or  threatened  against
          Licensor with respect to the Patents or patent applications before any
                                               ----------------------
          court  or  in  any  jurisdiction;  and
Licensor has and shall not enter into any agreement or commitment which prevents
Licensor from entering into and performing any obligations under this Agreement.

ARTICLE  VIII
                              Intellectual Property
                              ---------------------

8.01  Maintenance  Expense
      --------------------
Licensor  shall  be  responsible  for  all  fees,  annuities  and  legal expense
(excepting  legal  expense  which  is  or may be associated with any litigation,
including  but  not  limited  to,  juridical,  arbitral,  administrative  or
investigation)  required  to  obtain  and maintain Japanese patent applications,
patents  and  trademarks  as  set  forth  in  Schedule  A.

8.02  Registry  of  License
      ---------------------
Licensee  may,  at  its own expense, register exclusive licenses relevant to the
Patents  in  Japan  and  Licensor  shall  cooperate  with  Licensee  in  such
registration.

8.03  Patent  Applications
      --------------------
In the event that either party with respect to Improvements as to which it shall
have  the right to acquire title, seeks patent protection for such Improvements,
it  will  do so at its own expense (including any annuities or other maintenance
fees)  and it will receive the cooperation of the other party in the prosecution
of  such  patent  applications.  When granted, the applicant shall have title to
such  patent,  subject  to  the  rights,  if  any, of the other party hereunder.

8.04  Trademarks
      ----------
Licensor  does  not  intend  to  obtain any trademark with respect to the System
other  than the trademark set forth in Schedule A. If Licensee desires to obtain
a  mark or marks with respect to its products in association with the Technology
it  shall consult Licensor prior to application at the expense of Licensee. When
granted  such Trademark, Licensee shall possess all rights related to said mark.

8.05  Pending  Applications
      ---------------------
The parties shall take no action to jeopardize ongoing prosecutions or the final
issuance  of  pending  applications  of  the  Intellectual Property of the other
party.

8.06  Infringement
      ------------
     (a)  In  the  event  that  either  party  becomes aware of any infringement
          within  Japan  of  the


<PAGE>
          Products,  such  party shall immediately inform the other party of the
          fact  and discuss measures to remove such infringement. Licensor shall
          cooperate  with  Licensee  in  removing  such  infringement.
     (b)  All  expenses incurred and all damages awarded or otherwise payable to
     such  third  party  shall  be borne equally by the parties hereto but in no
     event  shall  Licensor  be  liable for expenses or damages in excess in any
     year  of ***% of running royalties paid to Licensor in such year under this
     Agreement.

                                   Article IX
TERM  AND  TERMINATION

9.01  Term
      ----
This  Agreement  shall  become  effective  on  the  date first above written and
continue  in  full  force  and be binding on each party until the latest date of
expiry  of  the  Patents.

9.02  Termination
      -----------
     (a)  Licensee may, at any time after the *** anniversary from the Effective
          Date  and  at  its sole discretion, terminate this Agreement by giving
          Licensor  ***  days prior written notice, provided that Licensee shall
          have  made  all payments due before such termination date with respect
          to  the  license  herein.
     (b)  In  the  event that Licensee fails to pay to Licensor any payment with
          respect  to the license hereunder within *** days after written notice
          is  made  by Licensor to Licensee of such failure of payment, Licensor
          may terminate this Agreement by giving Licensor *** days prior written
          notice.
     (c)  In  the  event that either party hereto files a petition in bankruptcy
          or  a petition in bankruptcy is filed against it, becomes insolvent or
          bankrupt,  makes  an arrangement for the benefit of creditors, or goes
          into  liquidation,  the  other  party  may terminate this Agreement by
          giving  such  party  a  written  notice.

9.03  Licensees right After  Termination
      ----------------------------------
After expiration or termination of this Agreement, all licenses and other rights
granted  to  Licensee  hereunder  shall  cease to exist; provided, however, that
Licensee  shall retain the license and rights hereunder to the extent of selling
or  otherwise  disposing  of any inventory Products and to fulfill all contracts
with  respect to the System and/or Products. In this case, Licensor and Licensee
shall  discuss  and  determine  the royalty payments to be made by Licnesee with
respect  to  such remaining rights, provided that the royalty amount provided in
Section  4.01  shall  be  the  upper  limit.


                                    Article X
                                 Confidentiality
                                 ---------------

10.01  Nondisclosure  Obligations
       --------------------------
(a)  The  parties understand that the Proprietary Information of the other party
constitutes valuable property rights. Therefore, the party receiving Proprietary
Information agrees not to provide or otherwise make available any portion of the
Proprietary  Information  in any form to anyone other than employees and outside
consultants  solely  for  purposes  of  carrying  out  the  rights,  duties  and
obligations  of  such  party  pursuant  to  this Agreement. Each party agrees to
notify  its  employees


<PAGE>
permitted  access  to the Proprietary Information, of the obligations under this
Agreement.  The  parties  shall  also  cause  such  employees thereto to execute
written  nondisclosure  and confidentiality agreements with the receiving party,
prohibiting  such  employees  from  further  disclosure  of  the  other  party's
Proprietary  Information  or use of such Proprietary Information for the benefit
of  any  person  other  than  Licensor  or  Licensee.

(b)  Each  party  shall  safeguard appropriately all documents, items of work in
process  and  work  products  that  embody  Proprietary Information of the other
party.  A  party  having  knowledge  of  loss  or  theft  of  the  other party's
Intellectual  Property  or  Proprietary Information shall immediately notify the
other  party  thereof.

10.02  Survival  of  Confidentiality  Obligations
       ------------------------------------------
The  non-disclosure  obligations  set forth in clause 10.01 above shall continue
for  ***  years  after  the  termination  of  this  Agreement.

10.03  Exceptions  to  Non-Disclosure  Obligations
       -------------------------------------------
The  confidentiality  and  non-disclosure  obligations set forth in clause 10.01
above  shall  not  apply  to  such  information  if:  (a)  any  such Proprietary
Information  is  in  public  knowledge  at  the  time of disclosure (b) any such
Proprietary Information that subsequently becomes public through no fault of the
receiving  party;  or  (c) any such Proprietary Information that is subsequently
disclosed  to  the  receiving  party  by third parties that have no confidential
obligations.  With  respect  to  public use, however, the parties understand and
agree  that  Proprietary  Information  of  a  party shall not be deemed to be in
public  use  or  publicly  available  merely  because  it  may  be  derived from
combinations  of  public  information.

                                   Article XI
                              Government Approvals
                              --------------------

11.01  Approvals
       ---------
Licensee shall, at its own expense, apply for all government approvals which may
be  required  for  the  execution  of  the  transactions  contemplated  in  this
Agreement,  and  shall furnish written Licensor with evidence of such approvals.

11.02  Export  Controls
       ----------------
Licensee  acknowledges that the further transfer of the Technical Information or
the sale of Products by Licensor to persons outside of the United States and the
further  transfer by Licensee of the Technical Information may from time to time
be  governed  by  specific  regulations  related to the Technical Information or
Products and Licensee agrees to comply with such specific regulations and at its
own  expense  and  from  time to time to obtain such consents, if any, as may be
required  to  so  comply.

                                   Article XII
                                  Miscellaneous
                                  -------------

12.01  Non-Assignment
       --------------


<PAGE>
Neither  this Agreement nor any right or obligation hereunder may be assigned or
transferred  to any third party by either party in whole or in part, without the
prior  written  consent  of  the  other  party.

12.02  No Joint  Venture
       -----------------
This Agreement shall not imply any establishment of partnership or joint venture
between  the  parties.  Neither  party  hereto  shall  act  or attempt to act or
represent  itself,  directly  or by implication, as having the power to bind the
other  party  or  in  any manner to create any obligation on behalf of the other
party.

12.03  Notices
       -------
Any  notice  or  other communication shall be given or sent hereunder in writing
and  delivered personally, sent by prepaid registered post, fax, or e-mail (with
electronic  confirmation  of delivery) to either party at the following address,
fax  number  or  such  other  address  or  fax number as either party shall have
provided  to  the  other  party  pursuant  to  this  Section.

     if to Licensor:  Airmail:   Clean  Diesel  Technologies,  Inc.
                                  300  Atlantic  Street,
                                  Stanford,  CT,  U.S.A.
                                            Attention:  James  M.  Valentine
                                 Chief Operating Officer
                                 Fax:       +1-203-323-0461
                                 E-mail:    jvalentine@cdti.com

     if to Licensee:             Airmail:   Mitsui  &  Co.,  Ltd.
                                            2-1,  Ohtemachi  1-chome,
                                            Chiyoda-ku,  Tokyo,  Japan
                                                         Attention:  Yuji  Shiro
                                            General  Manager
                                            Research  &  Development  Group
                                            Inorganic  Raw  Materials  Division
                                 Fax:       +81-3-3285-9149
                                 E-mail:     Y.Shiro@xm.mitsui.co.jp
                                             -----------------------

12.04  Successors
       ----------
This  Agreement  shall  be  binding  upon  the  parties and their successors and
permitted  assignees.

12.05  Entire  Agreement
       -----------------
This Agreement constitutes the entire agreement between the parties with respect
to  the  subject  matter  hereof  and  supersedes  all  prior  communications,
understandings  and  agreements  relating  thereto except as expressly otherwise
herein  provided.

12.06  Amendments
       ----------
No  amendment  to  or  modification of this Agreement shall be effective for any
purpose  whatsoever,  if  not  confirmed  in  writing  by  the  duly  authorized
representative  of  each  of  the  parties.

12.07  No  Waiver
       ----------
The  failure  of one party at any time to require performance by the other party
of  any  provision  hereof, shall in no way affect such party's right to require
full  performance  thereof  at  any time thereafter, nor shall the waiver by one
party  of  a  breach  of  any  provision  hereof  be  taken  or  held  to


<PAGE>
be  a  waiver  by  such party of any succeeding breach of such provision or as a
waiver  of  the  provision  itself.

12.08  Section  Headings
       -----------------
Section  headings  as  used in this Agreement are for convenience only and shall
not  effect  the  construction  or  interpretation  of  this  Agreement.

                                  Article XIII
ARBITRATION  AND  GOVERNING  LAW

13.01  Arbitration
       -----------
Any  controversy  or claim arising out of or relating to this Agreement shall be
determined  by  arbitration  under  the  International  Arbitration Rules of the
American  Arbitration Association. The arbitration shall take place in New York,
U.S.A.,  and  shall  be  conducted  in  the  English  language. The award of the
arbitrator(s)  shall  be  final  and  binding  on  both  parties.

13.02  Governing Law
       -------------
This  Agreement  and  the  rights  and  obligations  of  the  parties under this
Agreement shall be governed by, construed and interpreted in accordance with the
laws  of  the  State  of  New  York provided however, that issues related to the
validity  and  enforcement  of  the  Patents  shall be governed by Japanese law.

                                   Article IX
                            Former License Agreement
                            ------------------------

14.01  Former  License  Agreement
       --------------------------
The  parties hereby agree that the former license agreement entered into between
the  parties  on  the  5th day of  June 2000 with respect to the System shall be
automatically  terminated  and superseded by this Agreement in its entirety upon
execution  of  this  Agreement.

14.02  Notices
       -------
All  notices  hereunder  shall be deemed effective when made in writing when (a)
upon  receipt  when  delivered  by  hand  or  by  facsimile  transmission  and
acknowledged  electronically  or by air courier and the courier records delivery
or  (b)  three  days after deposit in the U.S.A mail when transmitted by postage
pre-paid  certified  or registered mail return receipt requested, in either case
to  the  addresses  for  the  parties set out herein and to the attention of the
person  signing  below for such party or to such other address and person as may
by  such  notice  be  given.

14.03  Counterparts
       ------------
This  License may be executed in any number of counterparts and each counterpart
shall  be  considered  for  all  purposes  as an original agreement but all such
counterparts  shall  in  the  aggregate  constitute  a  single  agreement.

IN  WITNESS  WHEREOF,  the  parties  have duly executed this Agreement as of the
Effective  Date.

CLEAN DIESEL TECHNOLOGIES, INC.         MITSUI & CO., LTD


<PAGE>
/s/  James  M.  Valentine               /s/  Jiro  Tamagawa
--------------------------------        -----------------------------------
James  M.  Valentine                    Jiro  Tamagawa
Chief  Operating  Officer                    General  Manager
                                        Inorganic  Row  Material  Division



                                   SCHEDULE A

PATENTS




JP App. No.     542874/1998   Tarabulski       Reducing NOx emissions from an
                                               engine  while  maximizing  fuel
                                               economy,  EGR/SCR.

WO  00/18491  (P1030A)        CDTI and AMBAC   Nozzle  design  (Injector).

PCT/US00/40111 (P7001A)       FT and CDTI      Urea supply controlled with the
                                               aid  of  SCR  fluorescence.

JP App. No. 541923/1998       Peter-Hoblyn     Heat and pressure applied to NOx
(P1021C)                      Balles           reducing  material  prior  to
                              Hofmann          Introduction into  exhaust  by
                                               Return  flow injection  system.
                                               (Fundamental return-flow concept)

WO  00/21881  (P1021D)        Tarabulski       In-tank module for urea solution
                              Knapper          control  and  feed.
                              Peter-Hoblyn
                              Valentine



                                   SCHEDULE B

                                Royalties & Fees
                                ----------------
                           (Stationary Diesel Engines)


          Standard  ARIS  2000  stationary  unit (1 Injector)  $***


<PAGE>
          2  Injector  ARIS  2000  stationary  unit            $***

          3  Injector  ARIS  2000  stationary  unit            $***
          (Includes  required  control  upgrade)

          4  Injector  ARIS  2000  stationary  unit            $***

          Spare  Injector                                $***


     Royalties  on  field-engineered  systems  will  be
     $***  per  Injector  plus  ***%  of  Net  Sales  on  all
     other  ARIS  2000  components  including  controls,
     sensors,  pumps  and  valves.  Field  engineered
                                    -----------------
     systems  shall  be  those  systems  using  other  than
     ------------------------------------------------------
     standard  modular  ARIS  units.
     -------------------------------



                             Upfront Sublicense Fees
                             -----------------------

          Licensor  shall  receive  ***%  of  any  Upfront
     Sublicense  Fee  charged  by  Licensee  to
     Sublicensees.


<PAGE>
                   AMENDMENT NO. 1 TO THE LICENSE AGREEMENT OF
                      JULY 13, 2001 BETWEEN MITSUI AND CDT
     DATED  DECEMBER  18,  2002


1)   Under the Agreement of July 13, 2001 (the "Agreement") between the parties,
     Mitsui  acquired  an option on a license for the mobile ARIS technology for
     Japan.  Subject  to  the  following specific terms and conditions including
     up-front  license  fees, royalties and minimums for the continuation of the
     mobile  license,  CDT  and  Mitsui  do  hereby  agree  to amend the License
     Agreement  of  July  13, 2001 to incorporate the previously excluded Mobile
     Engine  Market  as  a licensed Field in Japan consistent with the Terms and
     Conditions  of  the  Agreement.

2)   Royalties  for  Mobile  ARIS

     a.   Up  Front  License Fees: Mitsui will pay to CDT the amount of $250,000
          as  an  upfront  license payment on or before ***. Mitsui will further
          undertake  design, engineering, development and demonstration programs
          in  Japan of at least $*** in cost to further the commercialization of
          the  ARIS  mobile  technology  over the *** month period commencing on
          ***.  Mitsui  will  report  to  CDT on such expenditures on a mutually
          agreed  basis  no  later  than  ***.

     b.   Running  Royalties  shall  be  paid by License and sublicensees at the
          following  rates  for  ARIS  mobile  urea  SCR Systems manufactured or
          caused to be manufactured by Licensee or sublicensee or purchased from
          CDT  licensed  manufacturers  as  below:

          Cumulative Injectors     Unit Royalty
          --------------------     ------------
               1 - 1,000               $***
            1,001 - 100,000            $***
               100,001 +               $***

     c.   Licensee and each sublicensee shall pay a separate royalty of $*** per
          application  for each use of EGR/SCR combination following issuance of
          a  Japanese  patent  to CDT or its assignee if such combination is not
          used  in  conjunction  with the ARIS System covered by royalties under
          2b.

     d.   In  addition  to  targeted  royalty  amounts  specified in 2.04 of the
          Agreement,  Licensee shall pay to Licensor additional targeted royalty
          amounts  of  $***, $*** and $*** on the ***, *** and *** anniversaries
          of  this  Amendment  and  Licensor shall have the right to render this
          mobile  License non exclusive if Licensee shall not make such payments
          within  ***  days  of  each  of  such  anniversary  dates.

     e.   License  shall  pay  to Licensor ***% of any sublicensee fees, if any,
          collected  by  Licensee  from  sublicensees  of  the  ARIS technology.


<PAGE>
/s/  James  M.  Valentine                   /s/  Yuji  Shiro
-----------------------------------         --------------------------------
CLEAN  DIESEL  TECHNOLOGIES,  INC.          MITSUI  AND  CO.


<PAGE>