[CLEAN DIESEL LOGO]
November 5, 1997
Fuel-Tech N.V.
Castorweg 22-24
Curacao, Netherlands Antilles
Re: Stock Registration Rights
Dear Sirs:
The following sets forth our proposal for registration rights to
be granted Fuel-Tech N.V. ("FT") over Clean Diesel Technologies,
Inc. ("CDT") common stock owned by FT. If you are in accord with
the following, please sign below where indicated.
In connection with any proposed sale by FT of quantities of CDT
common stock owned by FT and for which FT shall be legally
required to deliver a statutory prospectus covered by an
effective registration statement, FT shall have the following
registration rights:
1. One registration on demand for a number of shares
equal in market value to at least $1 million at the
time of demand; and
2. An unlimited number of "piggy-back" registrations.
In the event of any registration hereunder CDT shall pay all
costs involved in such registration including legal, accounting,
investment banking and the printing of registration statements
and FT's reasonable requirements for prospectuses.
Notwithstanding the foregoing, however, FT shall pay or absorb
costs involved in any such registration which (i) it voluntarily
assumes to protect its interests, such as legal fees, (ii) are
associated with the task of furnishing information concerning FT
required to be included in the registration statement (iii) the
costs of discounts, commissions, and syndicate expenses allocable
to the shares to be sold by FT.
A "registration" shall mean an effective registration statement,
with post-effective amendments as required under the United
States securities laws and such other proceedings as may be
required under the securities or "blue sky" laws of the various
states of the United States so that FT may legally sell or offer
to sell the quantities of the CDT securities owned by it which
it desires to sell or offer to sell for at least a period of six
months from the commencement of the effectiveness of the
registration statement.
Fuel-Tech Registration Rights, 11/5/97, p. 2
A "piggy-back" registration shall mean a registration of securities
to be sold or offered for sale by CDT on its own behalf or on
behalf of sellers other than FT (other than for employee benefit
plans stock options or the like) in which FT shall participate as
a selling securities holder.
In any registration hereunder FT shall (i) indemnify CDT for
misstatements or omissions of fact concerning FT furnished by FT
and required to be included in a registration statement and (ii)
shall be guided as to the timing and quantities of securities to be
sold or offered for sale by the independent advice of the managing
underwriter of the proposed offering. CDT may select the managing
underwriter in any registration hereunder subject to the approval
of FT which shall not be unreasonably withheld.
In the event of a demand registration CDT may itself participate
and offer securities on its own behalf with FT acting as a selling
securities holder so long, however, as FT shall have reasonable
assurance that such arrangement will not interfere with FT's
intended sale of securities.
Clean Diesel Technologies, Inc.
By: /s/ J.D. Peter-Hoblyn
-----------------------------
Jeremy D. Peter-Hoblyn
President
Agreed to and Accepted
this 5th day of November, 1997
Fuel-Tech N.V.
By: /s/ J.A. de Havilland
-------------------------
J.A. de Havilland
Managing Director