EXHIBIT 10.1


                           PLEASE EXECUTE SIGNATURE PAGE AND FAX THE COMMITMENT
                           LETTER TO ANN B. RUPLE AT CLEAN DIESEL TECHNOLOGIES,'
                           INC., +1 203 323 0461

                         CLEAN DIESEL TECHNOLOGIES, INC.
                   OFFSHORE PRIVATE PLACEMENT OF COMMON STOCK
                                COMMITMENT LETTER

[INSERT  NAME],  a  [INSERT JURISDICTION] company ("Buyer"), of [INSERT ADDRESS]
hereby  agrees with Clean Diesel Technologies, Inc., a Delaware corporation (the
"Company") with a registered office at 300 Atlantic Street, Suite 702, Stamford,
Connecticut  06901, USA to purchase Shares of Company on the Closing Date and on
the  following  terms  and  conditions  as  to  which  Company  and Buyer agree.

Shares:             [INSERT  NUMBER  OF  SHARES],  being  the number  of  shares
                    of  Common  Stock,  par  $0.05  per  share,  of  the Company
                    ("CDT  Common")  which Buyer agrees to purchase from Company
                    and  Company  agrees to sell to Buyer for the Total Purchase
                    Price  at  the  Price  per  Share  (the  "Primary  Shares").

Price per Share:    USD $1.35 per Primary Share.

Total Purchase
Price:              [INSERT  FULL  PURCHASE  PRICE  IN  USD$]

Warrants:           Included  with the Primary Shares and for the Total Purchase
                    Price  shall  be  (i)  one  Warrant  for  the  purchase  of
                    [INSERT  NUMBER  EQUAL  TO 50% OF PRIMARY SHARES] of Warrant
                    Shares  at the exercise price of $2.00 per share (the "$2.00
                    Warrant  Shares")  and  (ii) one Warrant for the purchase of
                    [INSERT  NUMBER  EQUAL  TO 50% OF PRIMARY SHARES] of Warrant
                    Shares  at the exercise price of $2.50 per share (the "$2.50
                    Warrant  Shares").  The Warrants shall expire 180 days after
                    Closing  for  the  $2.00  Warrant  Shares and 360 days after
                    Closing  for  the $2.50 Warrant Shares. The form of Warrants
                    shall  be  that  of  Schedule  B attached to this Commitment
                    Letter.

Voting  Rights:     Primary  Shares  and  Warrant Shares shall have one vote per
                    share  in  accordance  with  Delaware  law.  Warrant  Shares
                    shall have no voting rights until the Warrants are exercised
                    and  the  Warrant  Shares  are  issued  and  outstanding.

Stock  Exchange
Listing:            The  Company  undertakes  promptly  to  apply  to  list  the
                    Shares  when  issued  on  the  Alternative Investment Market
                    of the London Stock Exchange, and, when listing requirements
                    are  satisfied,  The  American  Stock  Exchange,  or  at the
                    Company's  election, another recognized U.S. stock exchange.

Purpose:            Seller  shall  apply  the  Purchase  Price  of  the  Shares
                    toward  the  general  corporate  expenses  of  the  Company.


<PAGE>
Resale
Limitations:        The purchase and sale of the Shares is subject to Regulation
                    S of the U.S. Securities and Exchange Commission relating to
                    an  available  exemption  from  registration for the sale of
                    securities  by  U.S.  companies in offshore transactions. To
                    that  end  Buyer  represents and agrees that (i) it is not a
                    U.S  person  and is not acquiring the Shares for the account
                    or  benefit  of  any  U.S.  person, (ii) with respect to the
                    Primary Shares, Warrants and Warrant Shares, it shall comply
                    with  the  Transfer  Restrictions  set  out  on  Schedule  A
                    attached to this Commitment Letter, (iii) that such Transfer
                    Restrictions  shall be set out in a legend on certificate(s)
                    representing  the  Primary  Shares and Warrant Shares and on
                    the  Warrants, and (iv) that the Seller may refuse (or cause
                    its  transfer  agent  and  registrar to refuse) transfer and
                    registration  of  any  Primary  or Warrant Shares or Warrant
                    transferred  otherwise  than in accordance with the Transfer
                    restrictions.

Registration:       The  Company  shall  promptly after  the completion  of  its
                    annual  audit  for  the  year  2006  prepare  a registration
                    statement  under  the  U.S.  Securities  Act of 1933 for the
                    registration  for resale by Buyer of the Primary Shares, the
                    Warrants and the Warrant Shares, and file the same not later
                    than  six  months after the Closing with the U.S. Securities
                    and  Exchange  Commission  and,  to  the extent commercially
                    practicable,  shall  use  its  best  efforts  to  cause such
                    registration to become effective, all on the terms set forth
                    on  Schedule  C  attached  to  this  Commitment  Letter.

Payment:            Payment  shall  be  made  on 29 December 2006  (the "Payment
                    Date")  by  wire  transfer  to  the  Company's  account,  in
                    U.S.  Dollars, to Bank of America N.A., One Landmark Square,
                    Stamford  CT  USA 06901, ABA # 26009593, F/b/o/ Clean Diesel
                    Technologies,  Inc.  A/C  #  0093698-10952

Closing:            Closing  shall  be  five (5) days following the Payment Date
                    and  shall be effected by delivering certificates evidencing
                    the  Primary  Shares and the Warrants registered in the name
                    and  address of the Buyer as set out above or in the name(s)
                    of  such  other  nominee(s) or designee(s) of Buyer as Buyer
                    shall  have  advised the Company in writing on or before the
                    Payment  Date  at  the  office  of  the Buyer set out above.

Law:                This  Commitment  Letter  and  the  purchase of the Primary
                    Shares,  the  Warrants  and  the  Warrant  Shares  shall  be
                    governed  by Delaware Law without reference to the conflicts
                    of  laws  rules  of  any  jurisdiction.

Signatures:         This Commitment Letter is signed by the following authorized
                    representatives  of  the parties as of the last date written
                    below.


                                        2
<PAGE>
This Commitment Letter to buy and sell Shares has been executed and delivered by
the  following  authorized  representatives  of  the  Buyer  and  the  Company.

Clean Diesel Technologies, Inc.              [INSERT NAME OF BUYER]


By:                                          By:

Name:                                        Name:

Title:                                       Title:

No. of Primary Shares:

No. of $2.00 Warrants:

No. of $2.50 Warrants:


                                        3
<PAGE>
                                   SCHEDULE A
                           NON-U.S. PRIVATE PLACEMENT
                              TRANSFER RESTRICTIONS

The Shares have not been registered under the U.S. Securities Act and may not be
offered  or  sold  within the United States or to, or for the account or benefit
of,  U.S.  persons,  except pursuant to an exemption from or in transactions not
subject  to  the  registration  requirements  of  the  U.S.  Securities  Act.

Accordingly, the Shares are being placed outside the U.S. to non-U.S. persons in
an  offshore  transaction  in reliance on Regulation S under the U.S. Securities
Act.  The terms United States and U.S. person have the respective meanings given
to  those  terms  in  Regulation  S  under  the  U.S.  Securities  Act.

Each  Holder of Shares will be deemed to have represented and agreed as follows:

A.   It is acquiring  the  Shares for its own account or an account with respect
     to  which  it exercises sole investment discretion and that it and any such
     account or person is a non-U.S. Person and is aware that the acquisition of
     Shares  is being made in reliance on Regulation S under the U.S. Securities
     Act.

B.   It acknowledges  that  the  Shares  have not been registered under the U.S.
     Securities  Act  and  may  not be offered or sold except as provided below.

C.   It understands  and  agrees:

     1.   that the  Shares  are  being  offered  only  outside the United States
          to  non-U.S.  Persons  in  an  offshore  transaction  in reliance upon
          Regulation  S  under  the  Securities  Act;  and

     2.   that it  shall  not  offer,  sell,  pledge  or  otherwise transfer the
          Shares  within  two  years  after the date of original issuance of the
          Shares  or,  in  the  case of an affiliate of the Company, at any time
          until  the  later of (i) two years after the date of original issuance
          of  the Shares or (ii) three months after it ceases to be an affiliate
          of the Company, except, in each case as indicated and certified by the
          transferor of the Shares in the Certificate of Transfer on the reverse
          of  the  certification  of  the  Shares:

     (a)  to  the  Company;
     (b)  pursuant  to  an  effective  registration  statement  under  the  U.S.
          Securities  Act  and in accordance with any applicable securities laws
          of  any  state  of  the  United  States;
     (c)  in an offshore  transaction  in  accordance  with  Regulation  S under
          the U.S. Securities Act provided by Rule 144, if applicable, under the
          U.S.  Securities  Act;  or
     (d)  pursuant  to  an  exemption  from  the  registration  requirements  of
          the  U.S.  Securities  Act;
     (e)  in a transaction  that  does  not  require  registration  under  the
          U.S.  Securities  Act  but  is  in  accordance  with  applicable state
          securities  laws and in relation to which the transferor has furnished
          to  the  Company  an opinion to such effect from counsel of recognized
          standing  in  form  and substance satisfactory to the Company prior to
          such  offer,  sale,  pledge  or  transfer.

D.   It understands  that in any resale and transfer of Shares it will, and each
     subsequent  holder  is  required  to  notify any purchaser of Shares of the
     resale  restrictions  referred  to  above,  if  then  applicable.  This
     notification  requirement will be satisfied, by virtue of the fact that the
     following  legend  will be placed on the certificates of the Shares, unless
     otherwise  agreed  to  by  the  Company:


                                        4
<PAGE>
          THIS  SECURITY  HAS  NOT  BEEN  AND WILL NOT BE REREGISTERED UNDER THE
          SECURITIES  ACT  OF  1933,  AS AMENDED, OR APPLICABLE STATE SECURITIES
          LAWS.  THE  HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE
          BENEFIT  OF  THE  COMPANY THAT THIS SECURITY MAY NOT BE OFFERED, SOLD,
          PLEDGED, OR OTHERWISE TRANSFERRED BY SUCH HOLDER PRIOR TO THE LATER OF
          THE  (X)  SECOND  ANNIVERSARY  OF  THE  ISSUANCE  HEREOF  OR  (Y)  IF
          APPLICABLE,  THREE  MONTHS  AFTER  IT CEASES TO BE AN AFFILIATE, OTHER
          THAN  (1)  TO  THE  COMPANY, (2) PURSUANT TO AN EFFECTIVE REGISTRATION
          STATEMENT  UNDER  THE  SECURITIES  ACT  AND  IN  ACCORDANCE  WITH  ANY
          APPLICABLE  LAWS OF ANY STATE OF THE UNITED STATES, (3) IN AN OFFSHORE
          TRANSACTION  COMPLYING WITH REGULATION S UNDER THE SECURITIES ACT, (4)
          PURSUANT  TO  AN  EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
          PROVIDED  BY  RULE 144, IF APPLICABLE, UNDER THE SECURITIES ACT OR (5)
          IN  A  TRANSACTION  THAT  DOES  NOT  REQUIRE  REGISTRATION  UNDER  THE
          SECURITIES  ACT  BUT IS IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
          LAWS  AND IN RELATION TO WHICH THE HOLDER HAS FURNISHED TO THE COMPANY
          AN  OPINION TO SUCH EFFECT FROM COUNSEL OF RECOGNISED STANDING IN FORM
          AND  SUBSTANCE  SATISFACTORY TO THE COMPANY PRIOR TO SUCH OFFER, SALE,
          PLEDGE  OR  TRANSFER.  THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
          REPRESENTS  AND  AGREES  FOR  THE  BENEFIT OF THE COMPANY THAT IT IS A
          NON-U.S.  PERSON, AND ACKNOWLEDGES THAT HEDGING TRANSACTIONS INVOLVING
          THESE  SECURITIES  MAY NOT BE CONDUCTED UNLESS CONDUCTED IN COMPLIANCE
          WITH  THE  SECURITIES  ACT.

E.   It acknowledges  that  the  foregoing  restrictions  apply  to  holders  of
     beneficial  interests  in  the  Shares  as  well  as  to holders of Shares.

F.   It shall not engage in any hedging transactions involving the Shares unless
     in  compliance  with  the  U.S.  Securities  Act.


                                        5
<PAGE>
                                   SCHEDULE B
                                 FORM OF WARRANT

                                                       NO.

NEITHER  THIS  WARRANT  NOR  THE  SHARES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
REGISTERED  UNDER  THE  SECURITIES  ACT  OF  1933  OR  QUALIFIED UNDER ANY STATE
SECURITIES LAWS.  THIS WARRANT OR SAID SECURITIES MAY NOT BE SOLD OR OFFERED FOR
SALE,  PLEDGED,  HYPOTHECATED  OR  OTHERWISE  TRANSFERRED  IN  THE ABSENCE OF AN
EFFECTIVE  REGISTRATION STATEMENT UNDER SAID ACT AND APPLICABLE STATE SECURITIES
LAWS  OR  UNLESS  AN  EXEMPTION  TO  SUCH  REGISTRATION  AND  QUALIFICATION  ARE
AVAILABLE.

[INSERT DATE]

[INSERT NO. OF SHARES] SHARES

WARRANT FOR PURCHASE OF COMMON STOCK
OF CLEAN DIESEL TECHNOLOGIES, INC.
(A DELAWARE CORPORATION)

    This  Certifies  that  [INSERT  NAME] (the "Holder") of [INSERT ADDRESS] for
value  received  and subject to the provisions hereinafter set forth is entitled
to purchase from Clean Diesel Technologies, Inc. (the "Company"), [INSERT NO. OF
SHARES] SHARES of the Common Stock of the Company, par value $.05 per share (the
"Shares"),  at  a  price  of [INSERT EITHER $2.00/2.50] per share (the "Exercise
Price")  on  or before 5:00 p.m. local time at the then executive offices of the
Company  on  [INSERT  DATE  EITHER 180 OR 360 DAYS AFTER THE CLOSING DATE]. This
Warrant  shall  be  void  unless  exercised  on  or  before  such time and date.

1. Commitment Letter. This Warrant is issued pursuant to that certain Commitment
   -----------------
Letter  and related correspondence, relating to the private placement on [INSERT
CLOSING  DATE]  of  common  shares  of  the Company, between the Company and the
Hol1der  providing  for  the  issuance  to the Holder of Warrants evidencing the
right  of  the  Holder  to  purchase  shares  of  Common  Stock  of the Company.

2. 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 tender of this Warrant at the
then  executive office of the Company with a written notice signed by the Holder
to  the  attention  of  the  Company Secretary expressing the Holder's intent to
exercise  the same together with payment to the Company of the Exercise Price of
the Shares stated in the notice 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.

3. Reserved.
   ---------

4. No  Stockholder  Rights. This Warrant does not confer  upon the Holder or the
   -----------------------
Holder's  permitted  Assignees  any  right  whatsoever  as  a stockholder of the
Company,  including  without limiting the generality of the foregoing, the right
to  vote,  to  receive  notices and the right to receive dividends, prior to the
exercise  of  the  Holder's  rights  to  purchase the Shares as provided herein.

5. Compliance  with  Securities Laws. 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


                                        6
<PAGE>
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  (unless pursuant to an effective
registration  statement  under  the  Act)  shall  bear  the  following  legend:

          THIS  SECURITY  HAS  NOT  BEEN  AND  WILL  NOT BE REGISTERED UNDER THE
          SECURITIES  ACT  OF  1933,  AS AMENDED, OR APPLICABLE STATE SECURITIES
          LAWS.  THE  HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE
          BENEFIT  OF  THE  COMPANY THAT THIS SECURITY MAY NOT BE OFFERED, SOLD,
          PLEDGED, OR OTHERWISE TRANSFERRED BY SUCH HOLDER PRIOR TO THE LATER OF
          THE  (X)  SECOND  ANNIVERSARY  OF  THE  ISSUANCE  HEREOF  OR  (Y)  IF
          APPLICABLE,  THREE  MONTHS  AFTER  IT CEASES TO BE AN AFFILIATE, OTHER
          THAN  (1)  TO  THE  COMPANY, (2) PURSUANT TO AN EFFECTIVE REGISTRATION
          STATEMENT  UNDER  THE  SECURITIES  ACT  AND  IN  ACCORDANCE  WITH  ANY
          APPLICABLE  LAWS OF ANY STATE OF THE UNITED STATES, (3) IN AN OFFSHORE
          TRANSACTION  COMPLYING WITH REGULATION S UNDER THE SECURITIES ACT, (4)
          PURSUANT  TO  AN  EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
          PROVIDED  BY  RULE 144, IF APPLICABLE, UNDER THE SECURITIES ACT OR (5)
          IN  A  TRANSACTION  THAT  DOES  NOT  REQUIRE  REGISTRATION  UNDER  THE
          SECURITIES  ACT  BUT IS IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
          LAWS  AND IN RELATION TO WHICH THE HOLDER HAS FURNISHED TO THE COMPANY
          AN  OPINION TO SUCH EFFECT FROM COUNSEL OF RECOGNISED STANDING IN FORM
          AND  SUBSTANCE  SATISFACTORY TO THE COMPANY PRIOR TO SUCH OFFER, SALE,
          PLEDGE  OR  TRANSFER.  THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
          REPRESENTS  AND  AGREES  FOR  THE  BENEFIT OF THE COMPANY THAT IT IS A
          NON-U.S.  PERSON, AND ACKNOWLEDGES THAT HEDGING TRANSACTIONS INVOLVING
          THESE  SECURITIES  MAY NOT BE CONDUCTED UNLESS CONDUCTED IN COMPLIANCE
          WITH  THE  SECURITIES  ACT.

6. Sale;  Assignment.  (a)  This  Warrant may not be transferred,  sold, or made
   -----------------
subject  to  a  security interest or charge, pledged, hypothecated, or otherwise
transferred  absent compliance with the transfer restrictions set forth above in
this  Warrant.

(b) Upon such compliance with the transfer restrictions and upon the delivery to
the  Company at its executive office of this Warrant along with a duly completed
Assignment  Form substantially in the form of Exhibit A hereto (and the required
legal  opinion,  if  there  shall be no registration under the Act), the Company
shall  execute  and deliver a new Warrant in the form of this Warrant (including
the legend set forth above on the first page hereof, unless registered under the
Act  and any applicable State Laws), but registered in the name of the assignee,
to  purchase  the number of Shares or that fraction of the Shares issuable under
the  original Warrant assigned to the assignee.  In case the Holder shall assign
this  Warrant  with respect to less than all of the Shares that may be purchased
under  this Warrant, the Company shall execute a new warrant in the form of this
Warrant  for  the balance of such Shares or the remaining fraction of the Shares
issuable  under the original Warrant and deliver such new warrant to the Holder.


                                        7
<PAGE>
(c)  Any  transfer  or  sale  or  attempted  transfer or sale of this Warrant in
violation  of any provision of this Warrant shall be void, and the Company shall
not  record  such transfer on its books or treat any purported transferee of the
Warrant  as  the  owner  of  the  Warrant  for  any  purpose.

7. Representations of Holder. The Holder represents to the Company by acceptance
   -------------------------
of  this  Warrant,  as  follows:

     (a)  That  the Holder is not a U.S. Person and is not acquiring the Warrant
for  the  account  or  benefit  of  any  U.S.  Person.

     (b)  The  Holder  acquired  this  Warrant from the Company and will acquire
Shares  issuable  upon  exercise  hereof,  for  its  own account, for investment
purposes  only  and  not  with a view to the resale and distribution thereof, in
whole  or  in  part.

     (c)  The  Holder  shall comply with the transfer restrictions set out above
and the Holder understands that this Warrant and the Shares issuable on exercise
hereof  must  be  held indefinitely unless subsequently registered under the Act
and  qualified  under  any  applicable  State  Laws,  or  unless exemptions from
registration  and  qualification  are  otherwise  available.

     (d)  The  Holder  acknowledges  that  hedging  transactions  involving this
Warrant  or  the  Shares  issuable  upon  exercise  of  this  Warrant may not be
conducted  unless  conducted  in  compliance  with  the  Act.

8. Capital Adjustments.  The Exercise Price and the number of Shares purchasable
   -------------------
hereunder  are  subject  to  adjustment  from  time  to  time,  as  follows:

(a)  If at any time there shall be a merger or consolidation of the Company with
or  into  another corporation when the Company is not the surviving corporation,
then, as part of such merger or consolidation, lawful provision shall be made so
that  the  Holder  shall thereafter be entitled to receive upon exercise of this
Warrant,  during  the  period specified herein and upon payment of the aggregate
Exercise Price then in effect, the number of shares of stock or other securities
or  property  of  the  successor  corporation  resulting  from  such  merger  or
consolidation,  to  which  the Holder would have been entitled in such merger or
consolidation, if this Warrant had been exercised immediately before such merger
or  consolidation.

(b)  If  the  Company  at  any  time  shall,  by  subdivision,  combination  or
reclassification  of  securities or otherwise, change any of the Shares into the
same  or  a  different  number of securities of any other class or classes, this
Warrant  shall thereafter represent the right to acquire such number and kind of
securities as would have been issuable as the result of such change with respect
to  the  Shares  immediately  prior  to  such  subdivision,  combination,
reclassification  or  other  change.

(c)  If  the  Company at any time shall split or subdivide its Common Stock, the
Exercise  Price  shall  be  proportionately  decreased  and the number of Shares
issuable  pursuant  to  this Warrant shall be proportionately increased.  If the
Company  at any time shall combine its Common Stock, the Exercise Price shall be
proportionately  increased  and  the  number of Shares issuable pursuant to this
Warrant  shall  be  proportionately  decreased.

9. Governing  Law.  This  Warrant  shall  be  governed by and construed for  all
   --------------
purposes  by  in  accordance  with  the  laws  of  the State of Delaware without
reference  to  the  conflicts  of  laws  rules  of  any  jurisdiction.

10. Notices.  Any  notice  effecting  an  exercise of this Warrant shall,  if in
    -------
writing,  be  effective  upon  receipt  by the Company of the Warrant, notice of
exercise  and payment of the Exercise Price. Other notices shall, if in writing,
be  effective  on  receipt, if delivered in person or by facsimile transmission,
or,  if given by mail, four (4) days after deposit in the mail service, air-mail
postage pre-paid, in any case to the then executive office of the Company to the
attention  of  the Company Secretary, or, if to the Holder, to the address given
above  or  to  such  other  address  by  notice  so  given.


                                        8
<PAGE>
11. Holidays.  If the last or appointed day for the  taking of any action or the
    --------
expiration  of  any right required or granted herein shall be a Saturday, Sunday
or a legal holiday, then such action may be taken or such right may be exercised
on  the  next  succeeding  day  not  a  Saturday,  Sunday  or  a  legal holiday.

12. Lost  Warrants. The  Company covenants with the Holder that, upon receipt of
    --------------
evidence  reasonably satisfactory to the Company of the loss, theft, destruction
or  mutilation  of  this  Warrant  and,  in  the case of any such loss, theft or
destruction,  upon  receipt  of  an  indemnity  reasonably  satisfactory  to the
Company,  or in the case of any such mutilation, upon surrender and cancellation
of  such Warrant, the Company will make and deliver a new Warrant of like tenor,
in  lieu  of  the  lost,  stolen,  destroyed  or  mutilated  Warrant.

13. Fractional Shares. Fractional Shares may not be purchased hereunder. In lieu
    -----------------
of  fractional  Shares  the  Holder  shall be entitled to receive a cash payment
equal  to  the  fair  market  value for such fractional share. Fair market value
shall  be  the average of the high and low trading prices of a Share both (i) in
the  US,  on  the  over  the  counter  market  (OTC-BB) or on a recognized stock
Exchange,  if  listed,  and (ii) also in the U.K., on the Alternative Investment
Market  (AIM)  on  the  date  of  exercise, or if there shall be no such trading
prices  in  either  location,  then  the  average  of  the bid and asked prices.


                                        9
<PAGE>
                                   SCHEDULE C
                        ADDITIONAL PROVISIONS RELATING TO
                         REGISTRATION OF PRIMARY SHARES

The  Company's  undertaking to register the Primary Shares and Shares underlying
the  Warrants with the Securities and Exchange Commission (the "Commission"), is
subject  to  the  following  terms  and  conditions:

1.  Effective  Period.  The effectiveness of the registration statement covering
    -----------------
the  Primary  Shares  (the "Statement") shall be maintained until the earlier of
(i)  the second anniversary of the Closing or (ii) the eligibility for resale of
the  Primary  Shares  by  the  several Buyers thereof within the volume and time
restrictions  of  Commission  Rule  144  under  the  Act.

2.  Expenses.  The  Company  shall  pay  all  expenses  related  to  the filing,
    --------
effectiveness  and  maintenance of the effectiveness of the Statement; provided,
however,  the  Buyer shall assume all expenses, fees and commissions, if any, of
its  own  attorneys, accountants and financial or other advisors with respect to
the  Statement  or  any  resale  of  the  Primary  Shares.

3.  Amendments.  The Company shall from time to time file such amendments to the
    ----------
Statement  as,  in the opinion of the Company, shall be necessary or appropriate
for  purposes of resale of the Primary Shares by the Buyers thereof or otherwise
to  comply  with  applicable  law.

4.  Buyer  Information.  Buyer shall furnish to the Company all such information
    ------------------
concerning  Buyer  as shall be required for inclusion in the Statement and Buyer
hereby  indemnifies  the  Company and its Directors and Officers against any and
all  liability accruing to the Company arising out of a material misstatement or
omission  of  a  material  fact with respect to such required information in the
form  furnished  by  Buyer.

5.  Blue  Sky Law. The Company shall undertake to qualify the Primary Shares for
    -------------
resale  under  the securities laws of the several states of the United States in
those  jurisdictions where, in the opinion of the Company, it will substantially
facilitate  the  resale  of  the  Primary  Shares  and  it shall be commercially
practicable  to  do so; provided, however, that Company shall not be required to
effect  any  such qualification in any jurisdiction, if such qualification shall
require  the Company to qualify to do business in a jurisdiction where it is not
so  qualified,  or to consent to general service of process in any jurisdiction,
or  to  require  any  of  its  directors or officers to register as a securities
dealer  or  investment  advisor  in  any  jurisdiction,  or to subject itself to
taxation  in  any  such  jurisdiction.


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<PAGE>
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:
   ---------------------------------
   Name: Ann B. Ruple

   Title: Vice President & Treasurer


Attest:
   Name: Charles W. Grinnell

   Title: Secretary


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<PAGE>
                                    Exhibit A
                                    ---------

                               Form of Assignment
            [To be executed only upon permitted transfer of Warrant]


To: Clean Diesel Technologies, Inc.


For  value  received,  the undersigned registered holder of the attached Warrant
hereby  sells, assigns and transfers unto pursuant to and in accordance with the
terms  of such Warrant, the right represented by such Warrant to purchase Shares
of  Clean  Diesel  Technologies, Inc. to which such Warrant relates and appoints
Attorney  to  make such transfer on the books of Clean Diesel Technologies, Inc.
maintained  for  such  purpose, with full power of substitution in the premises.




Warrant  Holder

By:

Name:

Title:


Signed  in  the  presence  of:


Date:


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