Exhibit 10o



November 14, 2000

David  W.  Whitwell
Vice  President  &  CFO
Clean Diesel Technologies, Inc.
Suite  702
300  Atlantic  Street
Stamford  CT  06901


Re:  U.S.$1 Million Term Loan Facility with Warrants
     -----------------------------------------------

Dear  Mr.  Whitwell:

We  are  pleased to participate as Lenders in the above-captioned loan facility.
The  terms  and  conditions  of  this  facility  follow  and,  if  Clean  Diesel
Technologies,  Inc.  (the  "Company")  is  in  agreement  with  such  terms  and
conditions, kindly sign below where indicated and return one fully executed copy
of  this  letter  to  the  undersigned.

1.  The  Loan. The loan shall be up to the amount of $1 million from all Lenders
    ---------
(the  "Loan").  This  facility  shall  terminate  on  November  14,  2001.

2.  Borrowings. The Company may borrow and the Lenders shall lend up to the full
    ----------
amount  of  the Loan on seven (7) days notice from the Company to the Lenders to
the  attention  of  the  Lenders' representative(s) and at the addresses set out
below  (a  "Borrowing").  There  shall  be  no  more than five (5) Borrowings in
amounts  each  of not less than $200,000. Each Lender shall advance such portion
of  a  Borrowing as shall be in proportion to such Lender's participation in the
Loan  set  out  below.

3.  The  Notes. Each Borrowing shall be evidenced by a form of Senior Promissory
    ----------
Note  or Notes accruing interest at the rate of 10% per annum and with the terms
and  conditions  more  particularly  set  out in Schedule A attached hereto (the
"Notes").  The  sum  of  the principal amount of all Notes issued in a Borrowing
shall be equal to the amount of the Borrowing as set out in the Company's notice
to the Lenders. The Notes, regardless of issue date, shall be due and payable on
May  14,  2002. It is agreed that, as Senior Debt, the Notes shall rank ahead of
the  Company's Subordinated Debt and, as debt, shall rank ahead of the Company's
preferred  stock,  par  U.S.$0.05  per share and common stock, par U.S.$0.05 per
share  (the  "Common  Stock").

4.  The Warrants. The Company shall issue to the Lenders warrants with the terms
    ------------
and  conditions  including  registration  rights  more  particularly  set out in
Schedule  B  attached  hereto  (the  "Warrants").  The Warrants shall be for the
purchase  for  ten  (10)  years of up to 100,0000 shares of the Company's Common
Stock  at  the  exercise  price  of U.S.$2.00 per share. The Company shall issue
Warrants to the Lenders pro-rata in such proportion as 100,000 bears to the Loan
and  as  each Lender's participation bears to the Loan, as follows: (i) Warrants
for  50,000 shares pro-rata on the signing of this letter by the Company and all
Lenders  and  (ii)  Warrants  up to the amount of 50,000 shares pro-rata on each
Borrowing.

5.  Investment;  Securities Law. The Lenders represent to the Lenders now and on
    ---------------------------
each  Borrowing  that they are taking the Notes for investment with no intention
of  resale  or  distribution.  The  Lenders  covenant  that they shall not sell,
assign,  grant a security interest in, pledge, hypothecate or otherwise transfer
the  Notes except pursuant to the applicable provisions of the Securities Act of
1933,  as  amended,  of  the United States or the securities laws of the several
states  of  the  United  Sates  or  applicable  exemptions  there  from.

6.  Law.  This  facility  letter  and  the rights and obligations of the parties
    ---
hereto  shall  be  governed  by  the  internal  substantive laws of the State of
Delaware  U.S.A  with respect to contracts to be performed in that jurisdiction.


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7.  Counterpart Copies. This facility letter has been signed in counterparts and
    ------------------
each  counterpart  will  be considered for all purposes as an original agreement
but  all such counterparts shall in the aggregate constitute a single agreement.

8.  Notice.  Notice  hereunder  shall  be  in  writing  and,  if  electronically
    ------
confirmed,  may  be  given  by  facsimile  transmission.

9.  Signature  and Authority. This facility letter has been signed and delivered
    ------------------------
as  of  the  date  first above written by the representatives of the parties who
represent  that  they  are  duly  authorized  to  do  so.


FUEL TECH, INC.
    (Lender)                         Participation    $250,000


By:  /s/  S. M. Schecter
   ---------------------------
     Scott M. Schecter
     Vice  President,  Treasurer
     &  CFO
     Suite 703, 300 Atlantic Street
     Stamford  CT  06901  U.S.A


S  G  ASSOCIATES  LIMITED
(Agent for several Lenders)          Participation    $450,000


By:  /s/  D. R. Gray
   ---------------------------
     Derek  R.  Gray
     Managing  Director
     45  Queen  Anne  Street
     London  W1G  9JF  U.K.


   TREVOR  NEWMAN
 (Agent  for  Lender)                Participation     $300,000

/s/  Trevor  Newman
------------------------------

CLEAN DIESEL TECHNOLOGIES, INC.
        (Borrower)


By:  /s/  D.W.  Whitwell
   ---------------------------
     David  W.  Whitwell
     Vice  President,  Treasurer
     &  CFO


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                       Senior Promissory Note                         Schedule A

$                                                               December  , 2000
 ------------

     Clean  Diesel  Technologies,  Inc.,  a Delaware corporation (the "Company")
hereby  promises  to  pay  to  the  order  of___________________________________
(the  "Lender")  at  its  home  office,________________,  the  principal sum  of
______________  Thousand  &  no/100  Dollars  ($______),  in lawful money of the
United States on May 14, 2002 ("Maturity"). This Note shall bear interest on the
unpaid principal amount hereof at the rate of ten percent (10%) per annum on the
basis  of  a  year  of  365 days from the date hereof until Maturity or upon any
permitted  prepayment.

     The  loan in part evidenced by this Note (the "Loan") is pursuant to one of
a  series  of  Notes  authorized by that certain Letter Agreement as of November
14,  2000  (the  "Facility")  all of which Notes shall rank parri passu with one
another  regardless  of date of issue and each such Note shall be Senior Debt of
the  Company  and  the Company covenants that any monies borrowed by the Company
subsequent  to  the date of the Facility shall be Subordinated Debt and shall be
subordinated  to and shall rank behind such Senior Debt. "Monies borrowed" shall
not  include  amounts  owed  for  goods,  services,  taxes and other obligations
incurred  in  the  ordinary  course  of  business.

     The  Loan  may be prepaid without penalty or premium in full at any time or
in  part  in  multiples  of principal of not less than $200,000 (pro-rata to the
Notes  including  this  Note)  from  time  to  time with accrued interest on the
principal  so prepaid at the home office of the Lender on seven (7) days notice.

     In  the  event  of non-payment of principal or interest hereunder when due,
the  Company  waives presentment, notice of protest and notice of dishonor, and,
in  any enforcement proceeding, trial by jury. The Company further agrees to pay
all  expenses (including reasonable legal expenses and attorney's fees) of every
kind  of  or  incidental  to  the  collection  or  enforcement  of  this  Note.

     Notwithstanding  the  stated maturity of this Note, it shall be immediately
due  and  payable,  if  the  Company shall make an assignment for the benefit of
creditors,  or  shall  admit  in  writing its inability to pay its debts as they
become  due,  or  shall  file  a  voluntary  petition in bankruptcy, or shall be
adjudicated  a  bankrupt  or  insolvent,  or  shall  file any petition or answer
seeking  for  itself any reorganization, arrangement, composition, readjustment,
liquidation,  dissolution or similar relief under any present or future statute,
law  or  regulation,  or  shall  file any answer admitting or not contesting the
material  allegations  of  a  petition  filed  against  the  Company in any such
proceeding,  or  shall seek or consent to or acquiesce in the appointment of any
trustee,  receiver  or  liquidator  of  the  Company.

     Notice  hereunder  shall  be given by a facsimile message in writing to the
home  office  of  the  Lender,  electronically  confirmed.

     This Note and the obligations of the Company hereunder shall be governed by
the  internal  substantive  laws  of  the  State  of  Delaware.

CLEAN  DIESEL  TECHNOLOGIES,  INC.


By:                                       Attest:
   --------------------------                    ----------------------
   Name:   David W. Whitwell              Name:    Charles W. Grinnell
   Title:  Vice  President                Title:   Secretary

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OF THE UNITED
STATES  (THE "ACT") OR QUALIFIED UNDER THE SECURITIES LAWS OF THE SEVERAL STATES
OF  THE  UNITED  STATES  ("LAWS")AND  NO  SALE,  ASSIGNMENT,  GRANT  OF SECURITY
INTEREST,  PLEDGE, HYPOTHECATION, OR OTHER TRANSFER OF THE NOTES MAY BE EFFECTED
WITHOUT REGISTRATION OR QUALIFICATION UNDER OR EXEMPTIONS FROM SUCH ACT OR LAWS.


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                                                                     Schedule  B

_______, 20__.                    ___________ Shares, exercisable subject to the
                                              provisions  set  forth  below.

                      Warrant for Purchase of Common Stock
                                       of
                         Clean Diesel Technologies, Inc.
                            (a Delaware Corporation)

    This Certifies that _________________________________________ (the "Holder")
of,  for  value  received and subject to the provisions hereinafter set forth is
entitled  to  purchase  from  Clean  Diesel  Technologies, Inc. (the "Company"),
_________  shares  of  the Common Stock of the Company, par value $.05 per share
(the  "Shares"),  at  a  price  of  $2.00 per share (the "Exercise Price") on or
before  November  14,  2010  (the  "Expiration  Date").

1. Exercise. This Warrant may be exercised from time to time by the Holder as to
   --------
the  whole  or any lesser number of the Shares upon surrender of this Warrant at
the  then  executive  office  of the Company with a written notice signed by the
Holder expressing the Holder's intent to exercise the same together with payment
to  the  Company  of  the  Exercise Price of the Shares to be purchased. If this
Warrant  is  exercised  in respect of less than all of the Shares, the number of
Shares  not purchased shall be endorsed hereon by the Company Secretary and this
Warrant as so endorsed shall be returned by the Company Secretary to the Holder.
Fractional  Shares  may  not  be  purchased.

2.  Series.  This  Warrant is one of a series of duly authorized Warrants issued
   -------
pursuant  to  that  certain Letter Agreement as of November 14, 2000 between the
Company  and  certain  Lenders  (the "Commitment") providing for the issuance to
such  Lenders  on  the terms stated in the Commitment of Warrants evidencing the
right  of  the Lenders as Holders of Warrants to purchase shares of Common Stock
of  the  Company.

3.  Title.  This  Warrant  is issued subject to the condition that title to this
   ------
Warrant  and  all  rights hereunder shall be non-transferable and non-assignable
and  that  the  Company  and all persons dealing with this Warrant may treat the
Holder  hereof as the registered and absolute owner hereof for all purposes, any
notice  to the contrary notwithstanding; provided, however, that the Holder may,
with  the prior written consent of the Company granted in the Company's absolute
discretion,  assign this Warrant to  any recognized charitable institution under
the  laws  of  any  jurisdiction, and, if the Holder is a natural person, to any
immediate  family  member,  or,  if  the  Holder  is  a corporate entity, to its
affiliates  or  shareholders  ("Permitted  Assignees").

     4.     Covenants.  The  above  provisions  are  subject  to  the following:
            ---------

    (a)        This Warrant does  not  confer  upon  the  Holder or the Holder's
Permitted  Assignees  any  right  whatsoever  as  a  stockholder of the Company.

    (b)        This  Warrant  and  the Shares have not been registered under the
Securities Act of 1933 (the "Act") or qualified under the securities laws of the
several  states of the United States ("State Laws"). This Warrant and the Shares
have  been  purchased  for  investment  and  not  with a view to distribution or
resale,  and  may  not be assigned, sold or made subject to a security interest,
pledged,  hypothecated,  or  otherwise  transferred  without  an  effective
registration  statement  for  such  Warrant  or  Shares  under  the  Act  and
qualification  under  State  Laws  or  an opinion of counsel satisfactory to the
Company  that  such  registration and qualification are not required. Any shares
issued  upon  the  exercise  of  this  Warrant  shall bear the following legend:

               "The  shares  represented  by  this  Certificate  have  not  been
               registered  under  the  Securities  Act  of  1933  (the "Act") or
               qualified  under the securities laws of the several states of the
               United States ("State Laws"). These shares have been acquired for
               investment and not with a view to distribution or resale, and may
               not  be  assigned,  sold  or made subject to a security interest,
               pledged,  hypothecated,  or  otherwise  transferred  without  an
               effective  registration  statement  for such shares under the Act
               and  qualification  under  State  Laws  or  an opinion of Counsel
               satisfactory  to  the  Issuer  that  such  registration  and
               qualification  are  not  required."


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    (c)        The  Holder  shall  have  an  unlimited  number  of  incidental
registration  rights  with  respect  to  the  Shares  but  only until the second
anniversary  of the issue date of this Warrant, if such rights shall be required
for  a sale by the Holder of the Shares because (i) no exemption is available to
the  Holder  under  the Act with respect to a proposed sale or (ii) a sale under
Rule  144  of the Securities and Exchange Commission shall not enable the Holder
to  effect  a  proposed  sale.  An  incidental  registration  right shall mean a
registration  under the Act of securities of the Company on its own behalf or on
behalf  of sellers other than the Holder (other than for employee benefit plans,
employee  stock  options or the like) in which the Holder shall participate as a
selling stockholder. In any such incidental registration the Holder shall pay or
absorb  costs  which  (i) may be voluntarily assumed, such as legal fees for the
Holder's  own  counsel  or,  (ii)  are  associated  with  the task of furnishing
information  concerning  selling  stockholders  required  to  be included in the
registration  statement or (iii) relate to the fees, commissions or discounts of
underwriters  ratably  to  the Shares. In exercising the incidental registration
rights  hereunder the Holder agrees to be guided as to the timing and quantities
of  Shares to be offered by the Holder by the independent advice of the managing
underwriter  of  the  proposed  offering.

    (d)        In  the  event that, at any time prior to the Expiration Date and
prior  to  the  exercise  thereof,  the  Company  shall  effect a subdivision or
consolidation  of  shares  or  other  capital readjustments or other increase or
reduction  of  the  number  of  shares  of  its common stock outstanding without
receiving  compensation  therefor  in money, services or property, the number of
the  Holder's  or  Permitted Assignees' Shares shall be proportionately adjusted
and  the  number  of  Shares with respect to which this Warrant may be exercised
shall  (i)  in  the  event of an increase in the number of outstanding shares of
common  stock,  be  proportionately increased and the cash consideration payable
per Share shall be proportionately reduced; and (ii) in the event of a reduction
in  the number of outstanding shares of common stock, be proportionately reduced
and the cash consideration payable per Share shall be proportionately increased.

5.  Expiration.  This  Warrant  shall  be  void  unless  exercised  on or before
    ----------
the  Expiration  Date.

   WITNESS  the  seal  of  the  Company and the signature of its duly authorized
officers  as  of  the  date  first  written  above.


CLEAN  DIESEL  TECHNOLOGIES,  INC.


By:__________________________               Attest:__________________
Name:   David W. Whitwell                   Name:  Charles W. Grinnell
Title:  Vice  President                     Title:   Secretary


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