-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MvhtFJYjpAjldoGciBQEBHDsyh8TrKDLCVS0VgDKhauvATu++ufMFZKlQ1MoH/RV WhEcYMAKl/nZ/Yn7b1wpiA== 0001140361-07-000920.txt : 20070110 0001140361-07-000920.hdr.sgml : 20070110 20070110104611 ACCESSION NUMBER: 0001140361-07-000920 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20061229 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070110 DATE AS OF CHANGE: 20070110 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CLEAN DIESEL TECHNOLOGIES INC CENTRAL INDEX KEY: 0000949428 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL INORGANIC CHEMICALS [2810] IRS NUMBER: 061393453 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-27432 FILM NUMBER: 07522186 BUSINESS ADDRESS: STREET 1: 300 ATLANTIC ST STREET 2: STE 702 CITY: STAMFORD STATE: CT ZIP: 06901 BUSINESS PHONE: 2033277050 MAIL ADDRESS: STREET 1: 300 ATLANTIC ST STREET 2: STE 702 CITY: STAMFORD STATE: CT ZIP: 06901 8-K 1 form8-k.txt CLEAN DIESEL TECHNOLOGIES, INC. 8-K 12-29-2006 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): December 29, 2006 CLEAN DIESEL TECHNOLOGIES, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 000-27432 06-1393453 - -------------------------------- ----------------- ------------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) SUITE 702, 300 ATLANTIC STREET, STAMFORD, CT 06901 - ------------------------------------------------ -------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number including area code: (203) 327-7050 - -------------------------------------------------- ---------------- Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT. On December 29, 2006, Clean Diesel Technologies, Inc. (the "Company") entered into material definitive agreements with 36 investors (32 non-U.S. investors and 4 U.S. investors) for the purchase in private placements by such investors of seven million (7,000,000) of the Company's common shares, par value $0.05, and warrants for the purchase of an additional seven million (7,000,000) shares of its common stock, all for the total gross sales price of $9,450,000.35. Of these investors, Ruffer LLP and Hawkwood Capital LLP hold five percent (5%) or more of the Company's issued and outstanding shares of common stock. These private placements qualified for the exemptions from registration under the Securities Act of 1933, as amended, (the "Act") afforded by Regulation S and Regulation D under the Act. A more detailed description of such private placements is set out under Item 3.02 below of this current report on Form 8-K. The material terms of the agreements are that: (i) The Company sold and the investors bought units of one share of common stock and warrants to buy one share of common stock for the consideration of $1.35 per unit; (ii) The investors represented that they were acquiring the shares, the warrants and the shares of common stock underlying the warrants for their own accounts as an investment, and undertook with respect to these securities to comply with the transfer restrictions of Regulation S or Regulation D, as the case may be; (iii) The Company undertook to apply for the listing of (i) the 7,000,000 shares sold in this private placement on the Alternative Investment Market of the London Stock Exchange, and, (ii) the listing of its outstanding shares on the American Stock Exchange or another recognized U.S. stock exchange at such time as the Company should satisfy the applicable listing requirements; and (iv) The Company undertook to use its best efforts to the extent commercially practicable to effect the registration under the Act of the shares and the shares of common stock underlying the warrants following completion of the audit of its financial statements for the year 2006. The texts of the agreements are set out as Exhibits 10.1 (Regulation S for Non-U.S. Investors) and 10.2 (Regulation D for U.S. Investors) in this current report on Form 8-K. ITEM 3.02. UNREGISTERED SALES OF EQUITY SECURITIES. On December 29, 2006, the Company secured subscription commitments for the purchase of 7,000,000 shares of the Company's common stock, par value $0.05, and warrants for the purchase of an additional 7,000,000 shares of common stock for aggregate gross cash proceeds of $9,450,000.35. The securities were sold in units consisting of one share of common stock, one Class A Warrant and one Class B Warrant at a purchase price of $1.35 per unit. The Warrants are immediately exercisable. The Class A Warrants entitle the holder until July 2, 2007 to purchase, at a price of $2.00 per share, one share of common stock for every two shares acquired in the offering. The Class B Warrants entitle the holder until December 29, 2007 to purchase, at a price of $2.50 per share, one share of common stock for every two shares acquired in the offering. In connection with this offering, the Company incurred expenses including commissions to the placement agent of approximately $410,000. In addition, the Company will issue five-year warrants to purchase 837,994 shares of the Company's common stock, at an exercise price of $1.6875 per share, to the placement agent as additional compensation for its services, subject to the availability of authorized capital not otherwise committed. Of the total shares sold, 6,690,689 were sold to offshore investors, primarily in the United Kingdom, and in connection therewith, the Company claims the exemption from registration provided by Regulation S of the Act. Of the total shares sold, 309,312 were sold to investors in the United States, and in connection therewith, the Company claims the exemption from registration provided by Regulation D of the Act. Directors and senior management invested $106,321 for a total of 78,756 common shares and 78,756 warrants. 2 Attached as Exhibit 99.1 is the Company's press release issued on January 3, 2007 announcing the transaction. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits
Exhibit No. Description of Exhibit ------------ ---------------------- Exhibit 10.1 Form of Commitment Letter by and between the Company and Non-U.S. Purchasers of Units consisting of shares of common stock and warrants. Exhibit 10.2 Form of Commitment Letter by and between the Company and U.S. Purchasers of Units consisting of shares of common stock and warrants. Exhibit 99.1 Press Release dated January 3, 2007.
SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CLEAN DIESEL TECHNOLOGIES, INC. By: /S/ Ann B. Ruple ---------------------------------------- Ann B. Ruple Its: Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) Dated: January 10, 2007 3 EX-10.1 2 ex10_1.txt EXHIBIT 10.1 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. 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 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 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 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 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 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 (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 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 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. 10 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 11 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: 12 EX-10.2 3 ex10_2.txt EXHIBIT 10.2 EXHIBIT 10.2 PLEASE EXECUTE SIGNATURE PAGE AND FAX THE COMMITMENT LETTER TO ANN B. RUPLE AT CLEAN DIESEL TECHNOLOGIES, INC., 203-323-0461 CLEAN DIESEL TECHNOLOGIES, INC. UNITED STATES 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 principal place of business at 300 Atlantic Street, Suite 702, Stamford, Connecticut 06901 to purchase Shares of the Company on the Closing and on the following terms and conditions as to which Company and Buyer agree. 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: USD $ Warrants: Included with the Primary Shares and for the Total Purchase Price shall be (i) one Warrant for the purchase of 74,074 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 74,074 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. 1 Resale Limitations: The purchase and sale of the Shares is subject to Regulation D of the U.S. Securities and Exchange Commission relating to an available exemption from registration for the sale of securities by U.S. issuers in private transactions. To that end Buyer represents and agrees that (i) it is an "Accredited Investor" within the meaning of Regulation D, (ii) it is acquiring the Shares for its own account with no present intention to sell or distribute the Shares, Warrants or Warrant Shares, (iii) 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, (iv) 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 (v) that the Company 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 December 29, 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 06901 USA, 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 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 SCHEDULE A REGULATION D PRIVATE PLACEMENT TRANSFER RESTRICTIONS The Shares have not been registered under the Securities Act of 1933 (the Act") and may not be offered, sold, pledged or otherwise transferred except pursuant to an exemption from or in transactions not subject to the registration requirements of the Act. Accordingly, the Shares are being placed in a private transaction in reliance on Regulation D the Act. Each U.S. Holder of Shares represents and agrees, as follows: A. It is an "Accredited Investor" within the meaning of Regulation D and is acquiring the Primary Shares and the Warrants and Warrant Shares for its own account or an account with respect to which it exercises sole investment discretion and that it has no present intention of any further sale or distribution of the Primary Shares, Warrants or Warrant Shares and is aware that the acquisition of Shares is being made in reliance on Regulation D under the U.S. Securities Act. B. It acknowledges that the Shares have not been registered under the Act and may not be offered or sold except as provided below. C. It understands and agrees: 1. that the Shares are being offered in a private placement in reliance upon Regulation D under the 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: (a) to the Company; (b) pursuant to an effective registration statement under the Act and in accordance with any applicable securities laws of any state of the United States; (c) in an offshore transaction complying with Regulation S under the Act; (c) in a transaction in accordance with Rule 144 under the Act, if applicable under the Act; (d) pursuant to an exemption from the registration requirements of the Act; or (e) in a transaction that does not require registration under the 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 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. E. It acknowledges that the foregoing restrictions apply to holders of beneficial interests in the Shares as well as to holders of Shares. 5 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 Holder 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. 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. 4. 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 present intention as to distribution or resale, and may not be assigned, sold or made subject to a security 6 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. 5. 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. (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 6. Representations of Holder. The Holder represents to the Company by acceptance ------------------------- of this Warrant, as follows: (a) 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 present view to the resale and distribution thereof, in whole or in part. (b) 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. 7. 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. 8. 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. 9. 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. 10. 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. 8 11. 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. 12. 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 U.S., 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 SCHEDULE C ADDITIONAL PROVISIONS RELATING TO REGISTRATION OF PRIMARY SHARES The Company's undertaking to register the Primary Shares and the 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. 10 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 11 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: 12 EX-99.1 4 ex99_1.txt EXHIBIT 99.1 EXHIBIT 99.1 (Company Logo) NEWS RELEASE FOR JANUARY 3, 2007 at 2:30 AM EST AND 7:30 AM GMT - --------------------------------------------------------------- Contact: ALLEN & CARON INC. or CLEAN DIESEL TECHNOLOGIES, INC. Mike Mason (US investors) Dr. Bernhard Steiner, CEO & President (212) 691-8087; michaelm@allencaron.com (203) 327-7050; bsteiner@cdti.com Len Hall (US media) Ann Ruple, CFO, VP & Treasurer (949) 474-4300; len@allencaron.com (203) 327-7050; aruple@cdti.com CLEAN DIESEL TECHNOLOGIES COMPLETES $9.5 MILLION PRIVATE PLACEMENT STAMFORD, CT (JANUARY 3, 2007) Clean Diesel Technologies, Inc. (EBB:CDTI, AIM:CDT/CDTS & XETRA:CDI), a developer of chemical and technological solutions to reduce harmful engine emissions, announced today that it has secured commitments totaling US$9.5 million in gross proceeds from new and existing individual and institutional shareholders, as well as from directors and management of the Company. The private placement will result in Clean Diesel issuing an aggregate of 7 million separable units of common stock and warrants at a price of US $1.35 per unit. CEO Bernhard Steiner said the proceeds of the financing will provide working capital, predominantly for the continued commercialization and protection of its core technologies and products at a pivotal time for the Company. Dr. Steiner added "In light of the growing concern for the effects of global warming and air pollution, the world and its governments have adopted a more focused attitude towards greenhouse gas emissions and especially the need for the immediate reduction of particulate matter, oxides of nitrogen and fuel consumption. This acceleration and enforcement of legislation is requiring polluters to reduce tailpipe and other emissions. It is in precisely these markets that our technologies have worldwide application, especially when they enable cheaper and more effective use of existing pollution control systems." The units now being issued include shares of common stock, Class A Warrants and Class B Warrants. The Class A Warrants will entitle the holder until July 2, 2007 to purchase, at a price of $2.00 per share, one share of common stock for every two shares acquired in the offering. The Class B Warrants will entitle the holder until December 29, 2007 to purchase, at a price of $2.50 per share, one share of common stock for every two shares acquired in the offering. The total number of shares of common stock which could be issued upon exercise of all of the Class A and Class B Warrants is 7 million. After completion of this financing, Clean Diesel will have 33.2 million common shares outstanding (approximately 44.9 million shares on a fully diluted basis). Directors and senior management have invested US$106,321 for a total of 78,756 common shares and 78,756 warrants. These include Derek Gray, non-executive Chairman of the Board of Directors, for 37,037 units; John de Havilland, non-executive Director, for 25,000 units; Dr. Walter Copan, Executive Vice President, North American Operations and Chief Technology Officer, for 7,410 units; Timothy Rogers, Executive Vice President, International Operations, for 3,704 units; and Ann Ruple, Vice President Administration, Chief Financial Officer and Treasurer, for 5,605 units. The placement of 7 million common shares and 7 million warrants was managed and completed by the specialist environmental, London-based investment banking house, Innovator Capital Limited. Application will be made for the common shares and the warrant shares, when and if such shares are exercised, to be listed on AIM. Trading of the new common shares outside the US is expected to commence on or about January 8, 2007. The Company intends to file a registration statement with the US Securities and Exchange Commission following completion of the audit of the Company's 2006 financial statements. About Clean Diesel Technologies, Inc. - ------------------------------------- Clean Diesel Technologies, Inc. and its UK representative office, Clean Diesel International LLC, is a developer of chemical and technological solutions to reduce harmful engine emissions. Clean Diesel Technologies has patented products that reduce emissions from combustion engines while simultaneously improving fuel economy and power. Products include Platinum Plus(R) fuel borne catalysts, the Platinum Plus Purifier System and the ARIS(R) 2000 urea injection systems for selective catalytic reduction of NOx. Their products are now operational in commercial trucking fleets in the US and Europe, as well as in municipal bus lines. Platinum Plus and ARIS are registered trademarks of Clean Diesel Technologies, Inc. For more information, visit Clean Diesel at www.cdti.com or contact the Company directly. - ------------ Certain statements in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known or unknown risks, including those detailed in the Company's filings with the US Securities and Exchange Commission, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. UK media / investor enquiries: - --------------------------------- ABCHURCH COMMUNICATIONS www.abchurch-group.com Heather Salmond / Justin Heath 100 Cannon Street, London Email: heather.salmond@abchurch-group.com EC4N 6EU Email: justin.heath@abchurch-group.com Tel: +44 (0) 20 7398 7700 # # # # -----END PRIVACY-ENHANCED MESSAGE-----