exv10w1






Exhibit 10.1









Clean Diesel Technologies, Inc.

10 Middle Street, Suite 1100

Bridgeport, CT 06604

Tel: (203) 416-5290

Fax: (203) 416-5188

www.cdti.com




May 13, 2010




Innovator Capital, Ltd.

4TH Floor

20 Dering Street

London, W1S 1AJ




          Re: Fee Arrangements




Dear Sirs:




     By your signature below, please confirm our understanding as to how to interpret our
current fee arrangements with you in respect of your investment banking services being
provided in connection with both the contemplated $1,000,000 Regulation S Placement (the
“Reg S Placement”) and the contemplated merger of the Company with a third party (the
“Merger”).



     1. Reg S Placement. The warrant to be issued to you will be in the same form as
the warrant being issued to investors in the Reg S Placement, except that the exercise price
would be 110% of the per share price (without assigning value to the warrants) at which our common
stock is sold in the Reg S Placement. The warrant would be exercisable for the number of shares
equal to $150,000 divided by the aforesaid per share price.



     2. The Merger. In calculating your fee for the Merger, we will “value” the deal
(i) in all events as if each party meets its maximum cash target (such that the base 60/40 ratio
is achieved), as spelled out in the contemplated merger agreement, whether or not they in
fact meet such targets; (ii) using the number of shares that we are issuing to the other side if
(i) above is in
fact true, or that we would issue to the other side if the assumptions in (i) above were
true; and
(iii) using a per-share value of our stock equal to the average closing trade of the
three trading
days prior to the announcement and the sixth, seventh and eighth trading days subsequent
to the
announcement. The same value per share calculated as per (iii) above would be used to
value the
shares of our common stock given to you in the event we elect to pay your fee for the
Merger, in
whole or in part, in shares of our stock.



     Your engagement by us, notwithstanding any scheduled termination, will continue as to
the Reg S Placement and the Merger until, in either case, we have either consummated or
abandoned the transaction. Except as specifically amended hereby, and only in the instances
of the Reg S Placement and the Merger, our retention of you to provide services, and your
compensation therefor, shall remain unchanged.



 









 





     Please acknowledge your agreement with the foregoing by countersigning this letter in the
space provided for such purposes below and returning it to us at your earliest convenience.



	 	 	 	 	 	 	 

	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	Clean Diesel Technologies, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael L. Asmussen
	 	 
	 

	 	 	 	 	 	 
	 	 	Michael L. Asmussen, Chief Executive Officer and	 	 
	 	 	President	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John B. Wynne
	 	 
	 

	 	 	 	 	 	 
	 	 	John B. Wynne, Interim Chief Financial Officer,	 	 
	 	 	Vice President and Treasurer	 	 






Agreed to and accepted as of the

date first set forth above.




Innovator Capital, Ltd.




	 	 	 	 	 	 	 

	By:

	 	/s/ Mungo Park	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Mungo Park	 	 
	 

	 	Title:
	 	Chairman