Document:

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>Exhibit 10.2

                              License Agreement(1)
                              --------------------

                         Clean Diesel Technologies, Inc.
                      Combustion Components Associates, Inc.

AGREEMENT  entered  into as of this 31st day of March, 2003 between Clean Diesel
Technologies,  Inc.  (CDT),  a Delaware corporation ("Licensor") of 300 Atlantic
Street,  Stamford,  CT 06901 and Combustion Components Associates, Inc. (CCA), a
Connecticut  corporation,  of  884  Main  Street,  Monroe,  CT  06468.

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

                                    Recitals
                                    --------

Licensor  has developed and owns its patented "ARIS (R) 2000" method of reducing
emissions  of  oxides  of  nitrogen from diesel engines (the "System"), which is
inclusive  of  its  entire circulation components, injectors, controls, sensors,
pumps  and  valves, tankage and other storage components, catalyst and the costs
of  engineering  and  installation.

Licensee  desires  to enter the business of manufacturing and selling Systems in
the  on-highway,  off-road  and  portable  retrofit  sectors.

Accordingly,  Licensor  and  Licensee  agree,  all  on  the terms and conditions
provided  below,  that  Licensor shall license non exclusively its ARIS 2000 NOx
reduction  Technology  to  Licensee for the uses and in the territories provided
below  (the  "License")  and  Licensee  accepts  the  License and shall make the
payments  provided  below  to  Licensor.

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

1.01  "Effective  Date"  means  the  date first written above in this Agreement.

<PAGE>
1.02  "Federal Rate" shall mean the monthly rate of interest as published by the
Internal  Revenue  Service  pursuant  to  Internal  Revenue  Code  Section 7520.

1.03  "Fields of Use" shall mean application of the Technology to diesel engines
used  in  on-highway  and,  off-road  mobile  retrofit applications and retrofit
applications  to  portable  diesel  engines.

1.04  "Retrofit"  shall  mean,  application  to  on-road,  off-road vehicles and
portable  diesel  engines  on  which  title  has passed from the original engine
manufacturer  to  a  distributor  or  end  user.

1.05     "Portable"  shall  mean  intended  for  use  at a site for less than 12
consecutive  months.

1.06  "Improvement"  means  any  new invention or change in the Technology made,
conceived  or  first  reduced  to  practice  hereunder  by Licensor or Licensee,
whether patented or not, which results in better products or a more efficient or
less expensive means of manufacturing or installing or using products, provided,
however,  that  the Technology after the improvement is substantially similar to
the  Technology  as  originally  licensed  hereunder.

1.07  "Intellectual  Property"  means:

(a)  All United States and Canadian patent applications (including United States
provisional applications) and any and all patents issuing therefrom or otherwise
corresponding  thereto,  letters  patent,  and  all  divisions,  continuations,
continuations-in-part,  reissues,  and  extensions  thereof,  describing  and/or
claiming  any  rights  with respect to the System and as set forth on Schedule A
attached  hereto  and  made  a  part  hereof  or  any  amendment  thereof;  and

(b)  All  trademarks  and  applications or registrations thereof relating to the
System and set forth on Schedule A attached hereto and made a part hereof or any
amendment  thereof.

1.08  "Term"  means  the  period  from  the  Effective  Date  until  the date of
expiration  of  the  last  of the patents on Schedule A to expire, unless sooner
terminated pursuant to the terms of this License or extended by agreement of the
parties.

1.09  "Licensor  Representatives"  means  those employees of Licensor identified
herein who shall be responsible for transfer and disclosure of the Technology to
Licensee.

1.10  "Licensee  Representatives"  means  those employees of Licensee identified
herein  who  shall  be responsible for receipt of the transfer and disclosure of
the  Technology  on  behalf  of  Licensee.

1.11  "Net  Sales"  means,  in relation to Running Royalties under Sec.4.01.2 of
this  License,  the  gross  sales  price as billed by Licensee of Products, less
discounts  and  allowed credits, returns, customs duties, excise taxes, sales or
value added taxes, transportation, crating and insurance charges, if any of such
items  shall  be included in the gross sales price. A Product shall be deemed to
be  sold  when  the  buyer  has  made  payment  for  such  Product.

<PAGE>
1.12  "Product"  means  any object or device manufactured in whole or in part by
means  of  the  Technology  for  the  Application but excludes freight, storage,
catalyst,  ductwork  and  costs  of  engineering,  testing  and  installation.

1.13  "Proprietary Information" means information, or other material, regardless
of  its  form,  (a)  designated  by a party as "confidential," or "proprietary,"
whether or not owned or developed by the party making such designation, and, (b)
regardless  of  whether it has been specifically designated as "confidential" or
proprietary  (i) is proprietary to a party or (ii) is not generally available to
the  public about the business, products, plans, financial condition, customers,
methods of marketing, business systems or methods, proposals, policies, or trade
secrets  of  the  party.

1.14  "Technology"  means  the  Intellectual  Property  and any and all data and
information (in whatever format and whether or not subject to proprietary rights
protection  and  embodied  in  whatever  media)  relating  to  the  System.

1.15  "Territory"  means  the  United  States  of  America,  its possessions and
territories,  and  Canada.

                                   Article II
                                Grant of License
                                ----------------

2.01  Grant  of License. Licensor hereby grants to Licensee for the Term the non
      -----------------
exclusive  right  to  receive  the Technology and to make, use and sell Systems,
Products  and/or  services under or embodying or incorporating the Technology in
the  Territory  and  within  the  Fields  of  Use.

2.02 Sub-Licenses. Licensee may not sublicense or assign the Technology to other
     ------------
parties  (except  for  customers  to  use  Products).

<PAGE>
2.03  Loss  of  License.  If  the total annual Running Royalties due and payable
      -----------------
under  Sec.4.01.2 hereunder in the ***, and any subsequent year do not amount to
at  least  $*** per year, this License shall be terminated, if in its discretion
Licensor  by notice to Licensee terminates this License.  Licensee may, however,
make  voluntary  payments to maintain the License notwithstanding that royalties
are  not  due  and  payable  in  the  amounts  provided  above.

2.04  Licensee  Restriction.  In  order  to ensure commercial development of the
      ---------------------
System,  Licensee  shall  not  during  the  Term,  except  where the parties may
otherwise  agree,  make  use  or  sell  competing  systems to the System for the
Applications  in  the  Territory.

2.05  Purchase of Injectors. Licensee shall acquire injectors for use or sale in
      ---------------------
connection  with  the  System from AMBAC International, Inc. ("AMBAC") or CDT or
other  CDT  licensed manufacturers.  Licensor hereby consents to AMBAC's sale of
injectors  to  Licensee.  Licensee

<PAGE>
shall  include in reports furnished to Licensor under Sec.5.02 below, the number
of  injectors  purchased quarterly. Licensee shall also have the right itself to
manufacture  injectors  for  its  own  use  and sale for the Applications in the
Territory  or  to  other  CDT licensed manufacturers in the Territory during the
Term and shall furnish quarterly reports and pay the royalties due on the number
of  injectors  made  and  sold.

2.06 Cancellation. Licensee may in its sole discretion at any time after the ***
     ------------
anniversary  hereof  cancel  and  terminate  this  License on *** days notice to
Licensor,  provided,  however, that Licensee shall have made payment to Licensor
of all amounts accrued and unpaid and due to Licensor through the effective date
of  cancellation.

2.07     Trademark  Use.  Licensee shall identify the Trademark in Schedule A as
         --------------
a  registered  Trademark of Licensor and use the Trademark in product literature
and  advertising  as  mutually  agreed  with  Licensor.

                                   Article III
                        Technical Transfer and Assistance
                        ---------------------------------

<PAGE>
3.01  Technology  Transfer.  (a)  The Parties agree that upon the Effective Date
      --------------------
disclosure and transfer to Licensee of the Technology by Licensor will be deemed
to  have  been  completed.

3.02  Marketing  Assistance.  Throughout  the  Term  Licensor and Licensee shall
      ---------------------
consult  from  time to time as to methods of marketing to customers of Licensee.
Licensor  and  Licensee  may  from  time to time inform one another of potential
customers  for  Applications  of  Systems  and  Products  in  the  Territory.

3.03 Parties Independent. This Agreement is not intended in any manner to create
     -------------------
the  relationship  of  principal  and agent between Licensor on the one hand and
Licensee  on the other. This Agreement shall not be deemed to have established a
partnership  or  joint venture. 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 assume or create any obligation on behalf of the
other  party.

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

4.01 Royalties. In consideration of the rights granted hereunder, Licensee shall
     ---------
pay to Licensor License Fees and Running Royalties, as follows:

4.01.1  License  Fees.  License  Fees  shall be a payment in the amount of $***;
        -------------
payable  as $*** on signing this License and further amounts of $*** paid within
***  months  of  the  effective  date  less  a  total  credit  of up to $*** for
documented  unreimbursed  mobile  ARIS  development  expenditures

<PAGE>
for the *** months preceding and the *** months following the effective date and
a  further  amount  of  $***  paid  within  ***  months  of  the effective date.
Development  expenditures  shall  include  equipment  purchases,  third  party
development  expenses  and  unburdened  engineering  charges  directed  to  the
development  of  the  ARIS  mobile  system  by  CCA.

4.01.2  Running  Royalties.  Running Royalties shall be payments with respect to
        ------------------
Net Sales of Products by Licensee as set out on Schedule B.

4.02  Royalty  Review.  Licensor  and  Licensee  shall  in good faith review the
      ---------------
Running  Royalty  amounts  set  out  on Schedule B on the *** anniversary of the
Effective  Date  and every *** year anniversary thereafter of the Effective Date
with  a  view  toward  adjusting such amounts either up or down based on current
market  conditions.  The  maximum  increase  or  decrease per adjustment period,
however,  shall  be limited to ***% of the royalties set forth on Schedule B, as
adjusted.  Any  increase or decrease in the per unit royalty fee shall not cause
any  adjustment  in  the  minimum royalty payments stipulated in Sec.2.03 above.

4.03  Royalty  Payments.  Royalties  shall  be  paid to Licensor in U.S. dollars
      -----------------
within  *** days, with respect to Running Royalties, after each calendar quarter
with respect to Net Sales in that fiscal quarter. Such payments shall be made to
Licensor's address set out above or to such other address or by wire transfer to
Licensor's  bank  account  as  may  be  designated  by  notice  hereunder.

4.04  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.

4.05 Late Payments. In the event that payment is not made within *** days of the
     -------------
date  when  any amount is due to Licensor hereunder, Licensee shall pay interest
quarterly to Licensor on such amount at the Federal Rate at the place and in the
manner  required  for  the  payment  of  royalties.

4.06  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  Agreement whereupon this Agreement shall be of no
force  and  effect except for the obligation of Licensee to pay to Licensor such
amounts  as  have  accrued  hereunder  through  such  termination.

                                    Article V
                          Accounting, Reports and Audit
                          -----------------------------

5.01  Books  and Records. Licensee shall keep at its principal place of business
      ------------------
full  and  accurate  books  of  account  and  supporting  records containing all
particulars  necessary  for  computing

<PAGE>
accurately  the amounts to be paid to Licensor hereunder, all in accordance with
generally  accepted  accounting  principles.

5.02  Reports.  Each  payment of royalties by Licensee shall be accompanied by a
      -------
statement  signed  by  the  chief  accounting  officer of Licensee or other duly
authorized  officer  containing  such  information  as  may  be  necessary  for
computation  of  the  amount  payable  to  Licensor  hereunder and setting forth
separately  with  respect  to  each  sale sold by Licensee during the respective
quarter,  the  customer,  date and invoice number, quantity and sales price. The
form  of  such report may be provided by Licensor from time to time. If no sales
shall  be  made  during  any  quarter,  a  negative  report  shall be submitted.

5.03  Audits. Licensee during the Term shall upon *** days notice make the books
      ------
and  records  referred to in Section 5.01 above available for inspection by duly
authorized  representatives  of Licensor and for *** years thereafter. Moreover,
Licensor  may,  not  more often than *** in any *** -month period, elect to have
such  books and records audited at Licensor's expense by a certified independent
public  accountant  or  accounting  firm  selected  by  Licensor and approved by
Licensee (which approval shall not be unreasonably withheld) who may examine and
make such extracts from such books and records as may be necessary to verify the
computation  of  any  amount  payable  to Licensor hereunder. Such accountant or
accounting  firm shall not have performed regular services to either of Licensor
or  Licensee  and  may  be  licensed  by  any  state.  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 as confidential any
information  obtained  pursuant  to  this  Section  5.03  and  its accountant or
accounting  firm  shall  undertake  to  do  the  same.  If  any such audit shall
determine  that  the  amounts  payable  to Licensor have been understated by the
lesser  of (i) *** percent (***%) thereof or (ii) $***, Licensee shall reimburse
Licensor  the  cost  of  such  audit.

                                   Article VI
                                  Improvements
                                  ------------

6.01  Disclosure  of  Improvements.  Licensor and Licensee shall during the Term
      ----------------------------
hereof  disclose  and  explain  to  one  another all Improvements subject to the
disclosing  Parties right, but not obligation, to file patent applications prior
to  any  such  disclosure.  Any  such disclosure shall be treated as Proprietary
Information  of  the  disclosing  party.

6.02 Title and License to Improvements. That party hereto who or whose employees
     ---------------------------------
or agents shall have invented or developed such Improvement shall have title and
ownership  of  such  Improvement  and the other party shall have no right to any
Improvement  by  the  other  party  other  than if a separate Agreement is made.

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

<PAGE>
any  other Technology required to practice such Improvement 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 (a) it is a corporation in good standing under the laws of the
state  of  its  incorporation  and  it  has all corporate power and authority to
conduct its business as now being conducted; (b) that the execution and delivery
of  this  Agreement  is  duly  authorized;  (c) when executed and delivered this
Agreement shall be binding on each party and enforceable according to its terms,
excepting  as laws relating to bankruptcy, insolvency and equitable remedies may
affect  such  enforceability; and (d) neither this Agreement nor the performance
thereof  is,  or  will be, in violation of any agreement or any order, decree or
award  of any court or other forum to which a party is subject or by which it is
bound.

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

     (a)  Licensor  is  the  sole and exclusive owner of the Technology, has the
right  to  grant  the license granted hereunder and has executed no agreement or
taken  any  action  in  conflict herewith or in derogation of the rights granted
hereunder;

     (b)  To  Licensor's knowledge, the Technology does not infringe any patents
or  rights  of  any  third  party;

     (c)  To Licensor's knowledge, no circumstances of any sort exist that could
in any way restrict Licensor from licensing the Technology to Licensee and there
is  no  (i) unauthorized use of the Technology, (ii) circumstance which prevents
Licensee  from  utilizing the Technology for the purposes provided for herein or
diminishes  the  value  to  Licensee  of  the  license  to  the  Technology; and

     (d)  Licensor  has  not and will not enter into any agreement or commitment
which  might  in  any way limit, restrict or prevent Licensor from entering into
and  performing  its  obligations  under  this  Agreement.

7.03  Disclaimer  of  Warranties.  Except  as  otherwise set forth above in this
      --------------------------
Article  VII  of  this Agreement, the parties disclaim any warranties whatsoever
whether express or implied, including any warranty of merchantability or fitness
for  a  particular purpose with respect to the Technology or that the Technology
may  be  able  to  be  effectively  utilized  in  Licensee's  business.

<PAGE>
                                  Article VIII
               Protection and Maintenance of Intellectual Property
               ---------------------------------------------------

8.01  Maintenance  Expense. Licensor shall be responsible at its own expense for
      --------------------
all fees, annuities and legal expense (excepting legal expense which is or might
be  associated  with  any  litigation  including  any  judicial,  arbitral,
administrative  or  investigative  proceeding)  reasonably required to obtain or
maintain in force the United States and Canadian patent applications and patents
and  the  trademark  on  Schedule  A.

8.02  Patent  Applications.  In  the  event  that  either  party with respect to
      --------------------
Improvements  as  to  which  it  has  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 application. When granted, the
applicant shall have title to such patent, subject to the rights, if any, of the
other  party  hereunder.

8.03  Trademarks.  Licensor does not intend to obtain any trademark with respect
      ----------
to  the Technology other than the trademark set forth on Schedule A. If Licensee
desires  to  obtain  a mark or marks with respect to its products in association
with  the  Technology  it  shall  consult  with  Licensor  prior  to applying at
Licensee's  expense  for such a mark or marks. When granted, Licensee shall have
title  to  such  marks.  In  the event that this License shall terminate for any
reason,  Licensor  shall  have  the  right  and  option  to purchase and take an
assignment of any such mark at its then amortized cost on the books of Licensee.

8.04 Pending Applications. For any Intellectual Property that is during the Term
     --------------------
the  subject  of  any  pending  application, the parties shall take no action to
jeopardize  ongoing  prosecution  or  the  final  issuance  of  such  pending
Intellectual  Property.

8.05  Third  Party  Infringements.  (a)  During  the  Term  each  party  shall
      ---------------------------
immediately  inform  the  other  party,  if  it  becomes  aware of any actual or
potential infringement of the Technology, and the parties shall consult with one
another  concerning  such  infringement.

     (b)  During  the  Term  Licensor may but shall not be required to prosecute
infringements  within the licensed rights hereunder, so long as it shall deem it
practical  and  reasonable  to  do  so.

     (c)  If Licensor during the Term shall not prosecute an infringement within
the  licensed  rights  hereunder or shall cease such prosecution once commenced,
then  Licensees  may, but shall not be required to, prosecute such infringement,
so  long  as  it  deems  it  practical  and  reasonable  to  do  so.

     (d)  Licensor  and  Licensee  shall provide to one another such information
and  assistance  as may reasonably be requested in the course of any prosecution
of  infringements  whether  by  Licensor  or  Licensee.

<PAGE>
8.06  Infringement  Claims.  In  the event of any claim, demand, suit, action or
      --------------------
proceeding  brought  against  either  or  both  of  Licensor or Licensee, by any
person, firm or corporation, alleging or claiming that the Technology (in itself
and not in combination with other technology or art of Licensee) as practiced by
Licensee  or  its sublicensees, infringes on any patent right or misappropriates
any  trade  secret  of  such  claimant:

     (a)  Licensee  shall  promptly  notify  Licensor of any such claim, demand,
suit,  action,  or  proceeding  brought  against  Licensee.

     (b)  Licensor  shall  thereupon,  at its own expense, and in its discretion
either (i) render the Technology non-infringing, (ii) procure a license or right
from  the  claimant to enable Licensee to practice the patent or trade secret of
such  claimant,  or (iii) settle or defend on behalf of itself and Licensee, its
affiliates  and  their  agents,  employees, directors and permitted assigns such
claim,  demand,  suit,  action  or proceeding, and, in the event any judgment or
settlement  is  rendered  against  either  or  both of Licensor or Licensee, its
affiliates  and  their  agents,  employees, directors and authorized assigns for
damages  in  any  such  suit, action or proceeding, Licensor shall indemnify and
save  harmless  Licensee,  its affiliates and their agents, employees, directors
and  authorized assigns from all such costs and damages, but only in this regard
only  in  any  fiscal  year  of  Licensee to the extent of *** percent (***%) of
Running  Royalties  accruing  to  Licensor  in  such  year.

     (c)  If  Licensor  fails  to  timely dispose of the above mentioned claims,
demands,  suits,  actions,  or proceedings as provided in sub-section (b) above,
Licensee  shall  have  the  right,  upon  notification  to Licensor, but not the
obligation,  to  take all necessary action on behalf of itself and Licensor, and
deduct  up  to in any fiscal year not more than *** percent (***%) of reasonable
costs,  expenses  and  damages  arising in this regard in such year from Running
Royalties  payable  to  Licensor  by  Licensee.

                                   Article IX
                                 Confidentiality
                                 ---------------

9.01  Nondisclosure  Obligations.  (a)  Each  party  understands  that the other
      --------------------------
party's Proprietary Information constitutes valuable property rights. Therefore,
each  party coming into possession of Proprietary Information of the other party
agrees not to provide or otherwise make available, nor permit or otherwise allow
any  of  its  employees to provide or otherwise make available, the whole or any
portion of the other party's Proprietary Information, in any form, to any person
other  than  such  party's  employees  solely  for  purposes of carrying out the
rights,  duties  and  obligations of such party pursuant to this Agreement. Each
party  agrees  that  it  will  notify  its  employees  permitted  access  to the
Proprietary  Information  of  the  other  party  of their obligations under this
Agreement  with  respect  to  use,  reproduction, protection and security of the
other  party's  Proprietary  Information  and  cause its employees having access
thereto  to  execute  written  nondisclosure and confidentiality agreements with
such  party,  prohibiting  such  employees  from

<PAGE>
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)  Notwithstanding  the  foregoing,  each  party  shall have the right to
disclose  the  other party's Proprietary Information to its outside consultants,
if  any,  having  a  need  to  know such Proprietary Information for purposes of
carrying  out  the  rights,  duties  and  obligations  of  such party under this
Agreement; subject, however, to the conditions that any such outside consultants
execute  written  nondisclosure  and confidentiality agreements with such party,
prohibiting  such  outside  consultants  from  further  disclosure  of the other
party's  Proprietary  Information  or  use  of  the  other  party's  Proprietary
Information  for  the  benefit  of  any person other than Licensor and Licensee.

     (c) Each party will appropriately safeguard 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.

9.02  Survival  of  Confidentiality  Obligations.  Each  party  agrees  that its
      ------------------------------------------
nondisclosure  obligations  set  forth in Section 9.01 above will continue after
the termination of this Agreement for any reason whatsoever, and until such time
as  the  other  party,  its  licensors,  successors  or  assigns hold no patent,
copyright,  trade  secret  or  any other proprietary right in such other party's
Proprietary  Information,  or  any  portion  thereof.

9.03  Exceptions  to  Non-Disclosure  Obligations.  The  confidentiality  and
      -------------------------------------------
nondisclosure  obligations of Section 9.01 above shall not apply with respect to
the  other  party's  Proprietary  Information that falls within the scope of the
following:(a)  any such  Proprietary Information that is in the public domain at
the  time  of  disclosure  to  the  receiving  party;  (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 having no obligation to the disclosing
party,  or  to  any  other  parties  to  maintain  the  confidentiality  of such
Proprietary  Information.  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 embraced by a
more  general  disclosure, or merely because it may be derived from combinations
of  disclosures  in  public  use.

                                    Article X
                              Government Approvals
                              --------------------

10.01  Approvals. Licensee shall at its own expense apply in a timely manner for
       ---------
all government approvals, if any, which may be required for the execution of the
transactions  contemplated by this Agreement, and shall furnish evidence of such
approvals  to  Licensor  or  shall  advise  Licensor  that  no  such approval is
required.

<PAGE>
10.02  Export  Controls.  Licensee acknowledges that the further transfer of the
       ----------------
Technology  or the sale of Products by Licensor to persons outside of the United
States  may  from  time  to  time  be  governed  by  the export control laws and
regulations  of  the  United States and Licensee agrees to comply with such laws
and  regulations  at  its  own  expense  and  from  time  to time to obtain such
consents,  if  any,  as  may  be required to enable Licensee to so comply.  This
acknowledgement relates to home office sales by Licensee to third parties within
the  Territory  for  export and is not intended to grant any right or license to
make,  use  or  sell  outside  of  the  Territory.

                                   Article XI
                                  Miscellaneous
                                  -------------

11.01  Assignment.  Neither  this  Agreement nor the Technology nor any right or
       ----------
obligation  hereunder  is assignable or transferable by either party in whole or
in  part  without  the  prior  written  consent  of the other party and any such
purported assignment without such consent shall be void, except, however, upon a
sale  or  transfer  by  a party of all or substantially all of its business as a
going  concern  wherein  the purchasing or acquiring party assumes and agrees to
perform  all  of  the  obligations  of the assigning party under this Agreement.

11.02  Successors and Assigns. This Agreement shall benefit and bind the parties
       ----------------------
and their permitted successors and assigns.

11.03  Integration.  This  Agreement  contains  a  complete  statement  of  all
       -----------
arrangements  between  the parties relating to its subject matter and supersedes
all existing agreements or understandings related thereto.

11.04  Modifications;  Amendments.  This  Agreement  may  only  be modified or a
       --------------------------
provision  hereof waived by a writing signed by the parties which refers to this
Agreement  and  states that it is an amendment or waiver of a provision thereof.
The  failure  of  a  party to insist on strict adherence to any provision hereof
shall  not  be  construed  as  a  waiver  thereof.

11.05  Force  Majure. Neither party shall incur any liability to the other party
       -------------
on  account of any loss or damage resulting from any delay or failure to perform
all  or  any  part  of  this  Agreement,  where  such delay or failure is caused
principally  by  events,  occurrences or causes beyond the reasonable control of
the  parties.

11.06 Invalid Provisions. Any provision of this Agreement which is prohibited or
      ------------------
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to  the  extent of such prohibition or unenforceability without invalidating the
remaining  provisions hereof, and any such prohibited or unenforceable provision
shall  be  valid  in  any  other  jurisdiction.

<PAGE>
ll.07  Section  Headings.  The  section  headings used in this Agreement are for
       -----------------
convenience  of  reference  only and are not to effect the construction or to be
taken  into  consideration  in  the  interpretation  hereof.

11.08  Law.  This  Agreement and the rights and obligations of the parties under
       ---
this Agreement shall be governed by, and construed and interpreted in accordance
with  the  internal substantive laws of the State of Connecticut with respect to
contracts  to  be  performed  in  that  jurisdiction.

11.09 Arbitration. This Agreement and all questions of its interpretation or any
      -----------
claims  or  disputes with respect to any of the transactions contemplated herein
shall  be  determined exclusively in binding arbitration before a single neutral
arbitrator  under  the  rules  then  in  force  of commercial arbitration of the
American  Arbitration Association ("AAA"). The location of the arbitration shall
be  Stamford, Connecticut. Any award in such arbitration may be entered in or an
order of enforcement obtained from any court having jurisdiction. The arbitrator
acting  hereunder shall have the power only to award compensatory damages. Prior
to  the  commencement of any arbitration proceeding, the parties agree to engage
in  mediation  under  the  AAA  rules then in effect. The parties agree to share
equally  the costs of the AAA and of any mediator or arbitrator and otherwise to
bear  their own costs. Notwithstanding the foregoing, claims or disputes between
the  parties  hereto shall be determined judicially when such claims or disputes
arise  from a judicial proceeding brought by a third party against either one or
both  of the parties hereto and one party hereto seeks or may seek reimbursement
or  indemnity  from the other party hereto for the claims asserted by such third
party  in  such  judicial  proceeding.

11.10  Remedies.  Except  as  may  otherwise  be  provided in Section 8.06 above
       --------
concerning  infringements  and  except  for  such  equitable  remedies as may be
required  to  enforce  the  nondisclosure  obligations  in Article IX above, the
remedies  of  the  parties  hereunder  shall be limited to compensatory damages.

11.11  Notices.  All  notices  hereunder  shall be deemed effective when made in
       -------
writing (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. 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.

11.12 Counterparts. This Agreement may be executed in any number of 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.

<PAGE>
IN  WITNESS  WHEREOF,  the  parties  have  executed  this  Agreement  as of the
Effective  Date  by  their  officers  thereunto  duly  authorized.

CLEAN  DIESEL  TECHNOLOGIES,  INC.

By:  /s/  James  M.  Valentine

-----------------------------------
NAME:  JAMES  M.  VALENTINE

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

Title:  President  &  C.O.O.

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

COMBUSTION  COMPONENTS  ASSOCIATES,  INC.

By:  /s/  Edward  H.  Bird

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

Name:  Edward  H.  Bird

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

Title:  V.P.  Finance  &  Adm.

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

<PAGE>
                                   SCHEDULE A
                                   ----------

                                Licensed Patents
                                ----------------
                               (CDT/CCA Agreement)

A.     US  Patent  5,976,475   Process  patent.  Return
                                        flow  injection  system
                                        for  urea  using  reagent
                                        for  injector  cooling
                                        single  fluid  or  air
                                        assisted.

B.     US  Patent  6,063,350   Continuation  in  part  of
                                        A  above.  Method  to
                                        operate  and  control  the
                                        return  flow  system.
                                        Modular  in-tank  assembly
                                        identified  embodiment.

C.     US  Patent  6,279,603   Reagent  cooled  injector

D.     US  Patent  5,924,280   EGR/SCR  -  Reducing  NOx
                                        while  maximizing  fuel  economy.

     US  Trademark  No.  2,368,220     ARIS  (R)  2000  urea
                                   injection  system

                                   SCHEDULE B
                                   ----------

                                Running Royalties
                                -----------------

Licensee  shall pay to Licensor a royalty of $***/injector sold plus ***% of the
sales  price  of  other  system  components sold by Licensee excluding catalyst,
start-up  services,  testing  services,  installation  and  freight.

<PAGE>

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