Exhibit 10h



                                GRID NOTE AND SECURITY AGREEMENT


                   $500,000.                                  February 17,1998


                   CLEAN DIESEL TECHNOLOGIES, INC. ("Borrower") promises to pay
                   PLATINUM PLUS, INC. ("Lender") or order, the principal amount
                   of Five Hundred Thousand Dollars ($500,000), or such lesser
                   amount as is indicated on the reverse hereof as the then
                   unpaid principal balance, one hundred twenty (120) days from
                   the date hereof with interest at the rate of ten percent
                   (10%) per year on such principal balance calculated on the
                   basis of a  year of 360 days and 30 day months. This note may
                   be prepaid at any time in whole or in part without penalty or
                   premium. Lender agrees to lend up to Five Hundred Thousand
                   Dollars to Borrower under this Note for Borrower's working
                   capital purposes. All repayments shall be to the account of
                   Lender at its home office, 300 Atlantic Street, Stamford
                   Connecticut 06901.

                   Borrower irrevocably authorizes Lender to endorse on the
                   reverse side hereof the date and principal amount of any
                   borrowing or repayment made after the date hereof from or to
                   Lender.


                   To secure the obligation of this Note Borrower hereby grants
                   to Lender a security interest in and to all of Borrower's
                   Intellectual Property whatsoever, including patents,
                   trademarks and copyrights, applications therefor, and trade
                   secrets, technology, information and data, including the
                   Intellectual Property more particularly listed on Schedule A
                   hereto and proceeds of all such collateral.


                   If the principal hereof in not paid when due, Borrower aqrees
                   to pay all costs of collection thereof and all costs of
                   foreclosure of the security interest granted herein,
                   including reasonable attorneys fees, and for such purpose
                   herby submits to the jurisdiction of the Superior Court of
                   Stamford of the State of Connecticut. In foreclosure of the
                   security interest granted herein, Borrower waives trial by
                   jury and any requirement of notice or of posting a bond.



                                         CLEAN DIESEL TECHNOLOGIES, INC.



                                         By: /s/  J. D. Peter-Hoblyn
                                             ----------------------------
                                             Jeremy D. Peter-Hoblyn
                                             President