
                                                                   Exhibit 4c

                      CLEAN DIESEL TECHNOLOGIES, INC.

                         INSTRUCTIONS AS TO USE OF
                            RIGHTS CERTIFICATES

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

           CONSULT THE INFORMATION AGENT, OR YOUR BANK OR BROKER,
         IF YOU HAVE ANY QUESTIONS AFTER READING THESE INSTRUCTIONS

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


     The  following   instructions  relate  to  the  rights  offering  (the
"Offering") by Clean Diesel Technologies, Inc., a Delaware corporation (the
"Company"),  to the holders ("Holders") of the Company's outstanding common
shares, par value $0.05 per share (the "Common Shares") as described in the
Company's Prospectus dated __________ __, 1998 (the "Prospectus").  Holders
of record (the "Record Date Holder") of the Company's  Common Shares at the
close of business on __________  __, 1998 (the "Record Date") are receiving
one transferable  subscription right (each a "Right") for each 50 shares of
the  Company's  Common Shares held on the Record Date;  provided,  however,
that Rights will not be  distributed  to Record Date  Holders who reside in
jurisdictions  where  the  Rights  have  not  been  registered  or where an
exemption from  registration  is not available,  as described more fully in
the  Prospectus.  Each Right  entitles  the  holder  thereof  (the  "Rights
Holder") to subscribe  for and  purchase  from the Company one share of the
Company's  Series B Convertible  Preferred Stock, par value $0.05 per share
(the "Series B Preferred  Stock") (the "Basic  Subscription  Privilege") at
the subscription price (the "Subscription  Price") of $____, and each share
of Series B Preferred Stock will be immediately convertible,  at no cost to
the holder thereof,  into 33 Common Shares. No fractional Rights or cash in
lieu  thereof  will be  distributed  or paid by the  Company.  An aggregate
number of up to 50,000 shares of Series B Preferred Stock (the  "Underlying
Shares") will be distributed in connection with the Offering.

     Subject to the proration and possible reduction  described below, each
Right also  entitles  any Record Date Holder  exercising  in full the Basic
Subscription  Privilege the right to subscribe for additional Common Shares
available after  satisfaction of all  subscriptions,  pursuant to the Basic
Subscription    Privilege   (the   "Oversubscription    Privilege").    The
Oversubscription  Privilege is not transferable.  Subject to the allocation
and possible reduction described below, Common Shares will be available for
purchase pursuant to the Oversubscription Privilege only to the extent that
any Underlying Shares are not subscribed for through the Basic Subscription
Privilege.  If the  Underlying  Shares are not  subscribed  for through the
Basic  Subscription  Privilege (the "Excess  Shares") are not sufficient to
satisfy all subscriptions pursuant to the Oversubscriptions  Privilege, the
Excess  Shares will be allocated pro rata  (subject to the  elimination  of
fractional   shares)  among  those  Record  Date  Holders   exercising  the
Oversubscription Privilege.

     The  Subscription  Price is payable in cash. See "THE RIGHTS OFFERING"
in the Prospectus.

     The Rights will expire at 5:00 p.m.  Eastern  time on  __________  __,
1998,  unless otherwise  extended by the Company in its sole discretion (in
either case, the "Expiration Date").

     The number of Rights to which you are  entitled is printed on the face
of your Rights Certificate.  You should indicate your wishes with regard to
the exercise, transfer or sale of your Rights by completing the appropriate
form or forms on the reverse side of your Rights  Certificate and returning
the Rights  Certificate to the Subscription Agent in the envelope provided.
Once  a  Rights  Holder  has  properly  exercised  the  Basic  Subscription
Privilege  or the  Oversubscription  Privilege,  such  exercise  may not be
revoked.

     YOUR  RIGHTS  CERTIFICATE  OR NOTICE OF  GUARANTEED  DELIVERY  MUST BE
RECEIVED BY THE SUBSCRIPTION  AGENT AND PAYMENT OF THE  SUBSCRIPTION  PRICE
INCLUDING FINAL CLEARANCE OF ANY UNCERTIFIED CHECKS MUST BE RECEIVED BY THE
SUBSCRIPTION  AGENT, AT OR BEFORE 5:00 P.M.  EASTERN TIME ON __________ __,
1998. YOU MAY NOT REVOKE ANY EXERCISE OF A RIGHT.

     1. Subscription Privileges.

     To Exercise Rights.  To exercise your Rights,  complete Form 1 of your
Rights  Certificate  and  send  to the  Subscription  Agent  your  properly
completed and executed Rights Certificate  together with payment in full of
the Subscription Price for each Underlying Share subscribed for pursuant to
the  Basic  Subscription  Privilege  and  the  Oversubscription  Privilege.
Payment  of the  Subscription  Price  must be made for the full  number  of
Underlying  Shares  being  subscribed  for (a) by check or bank  draft,  or
postal, telegraphic or express money order, in each case, payable to Mellon
Securities Trust Company, as Subscription Agent, or (b) by wire transfer of
funds to the account  maintained by the Subscription Agent for such purpose
of accepting subscriptions at The Chase Manhattan Bank, New York, New York,
ABA  #021000021,   Account  #323-213057,  FBO  Clean  Diesel  Technologies,
Attention:  ChaseMellon Shareholder Services, L.L.C., Evelyn O'Connor (with
Subscriber's  name),  the  Subscription  Price  will be deemed to have been
received by the Agent only upon (i)  clearance  of any  uncertified  check,
(ii) receipt by the Subscription  Agent of any certified check or cashier's
check,  or of any  postal,  telegraphic  or  express  money  order or (iii)
receipt of collected funds in the Subscription  Agent's account  designated
above.  IF PAYING BY  UNCERTIFIED  CHECK,  PLEASE  NOTE THAT THE FUNDS PAID
THEREBY  MAY TAKE AT LEAST FIVE (5)  BUSINESS  DAYS TO CLEAR.  ACCORDINGLY,
RIGHTS  HOLDERS  WHO  WISH  TO PAY  THE  SUBSCRIPTION  PRICE  BY  MEANS  OF
UNCERTIFIED CHECK ARE URGED TO MAKE PAYMENT  SUFFICIENTLY IN ADVANCE OF THE
EXPIRATION  DATE TO ENSURE THAT SUCH PAYMENT IS RECEIVED AND CLEARS  BEFORE
THE EXPIRATION DATE AND ARE URGED TO CONSIDER IN THE  ALTERNATIVE,  PAYMENT
BY MEANS OF CERTIFIED  CHECK,  BANK DRAFT,  MONEY ORDER OR WIRE TRANSFER OF
FUNDS.

     If you exercise  less than all of the Rights  evidenced by your Rights
Certificate  by so  indicating  on Form 1 of your Rights  Certificate,  the
Subscription  Agent will  either (i) issue to you a new Rights  Certificate
representing  the remaining  rights or (ii) if you so indicate on Form 2 of
your Rights  Certificate,  issue a new Rights  Certificate  to a designated
transferee.  If no indication is made, the Subscription Agent will issue to
you a new Rights  Certificate  evidencing the  unexercised  Rights.  If you
choose,  however,  to  have  a new  Rights  Certificate  sent  to  you or a
designated transferee,  such new Subscription Rights Certificate may not be
received in sufficient  time to permit you or the designated  transferee to
sell or exercise the Rights evidenced thereby.

     If you have not indicated the number of Rights being exercised,  or if
you have not  forwarded  full  payment  of the  Subscription  Price for the
number of Rights that you have indicated are being exercised, then you will
be deemed to have exercised the Basic  Subscription  Privilege with respect
to the maximum  number of Rights which may be exercised  for the  aggregate
payment  delivered  by you and,  to the extent that the  aggregate  payment
delivered by you exceeds the product of the  Subscription  Price multiplied
by the number of Rights which may be exercised  for the  aggregate  payment
delivered by you and, to the extent that the aggregate payment delivered by
you exceeds the product of the Subscription  Price multiplied by the number
of Rights  evidenced  by the Rights  Certificate(s)  delivered by you (such
excess  being  the  "Subscription  Excess"),  you  will be  deemed  to have
exercised  the  Oversubscription  Privilege  to  purchase,  to  the  extent
available,  that  number  of whole,  Excess  Shares  equal to the  quotient
obtained by dividing the Subscription  Excess by the Subscription Price and
any amount remaining after such division shall be returned to you.

     To Exercise  Rights through a Nominee.  If you wish to have your bank,
broker  or other  nominee  exercise  some or all of your  Rights,  you must
complete  Forms  1, 2 and 3 of your  Rights  Certificate,  providing  clear
direction as to how many Rights are to be exercised  and what action should
be taken in regards to any  unexercised  Rights.  Banks,  brokers and other
nominees  who  exercise  the  Oversubscription  Privilege  on behalf of the
beneficial owners of Rights will be required to certify to the Subscription
Agent and the Company,  by delivery to the Subscription  Agent of a Nominee
Holder  Oversubscription  Certification  in the  form  available  from  the
Subscription Agent or the Information Agent, the aggregate number of Rights
as to which the  Oversubscription  Privilege  are being  exercised  and the
number of Underlying Shares thereby subscribed for by each beneficial owner
of Rights on whose behalf such nominee holder is acting.

     To Exercise Rights if Rights  Certificate Might Not Properly Reach the
Subscription  Agent Prior to the  Expiration  Date. You may cause a written
guarantee substantially in the form of Exhibit A to these instructions (the
"Notice  of  Guaranteed  Delivery")  from  a  member  firm  of an  approved
Signature  Guarantee Medallion Program (an "Eligible  Institution"),  to be
received by the  Subscription  Agent at or prior to the Expiration  Date or
complete  the  information  provided  in Form 1 of the Rights  Certificate;
payment in full of the applicable Subscription Price may be made separately
as long as said payment is also  received by the  Subscription  Agent at or
prior to the Expiration Date. Such Notice of Guaranteed Delivery must state
your name, the number of Rights  represented by your Rights Certificate and
the number of Underlying  Shares being subscribed for pursuant to the Basic
Subscription  Privilege and being  subscribed for, if any,  pursuant to the
Oversubscription Privilege, and the Eligible Institution must guarantee the
delivery to the Subscription  Agent of your properly completed and executed
Rights Certificate(s) evidencing those Rights within five (5) Trading Days,
following the date of the Notice of Guaranteed Delivery.  If this procedure
is  followed,   your  Rights   Certificate(s)   must  be  received  by  the
Subscription  Agent within five (5) Trading Days  following the date of the
Notice of Guaranteed  Delivery relating  thereto.  Additional copies of the
Notice  of  Guaranteed  Delivery  may be  obtained  upon  request  from the
Information Agent.

     2. The Subscription Agent and the Information Agent

     The address and  telephone  number of the  Subscription  Agent and the
Information Agent are as follows:


         In the U.S.:                                In the U.K.:
 Chemical Mellon Shareholder                 Computershare Services, P.L.C.
           Services                                  P. O. Box 859
  450 West 33rd Street, 15th                         Consort House
            Floor                                     East Street
   New York, New York 10001                       Bedminister, Bristol
        (800) 814-0304                                  BZ991XZ
                                                     1179-370-672

     3. Issuance and Delivery of Stock Certificates, Etc.

     The following  issuances,  deliveries and payments will be made to you
at the  address  shown on the face of your  Rights  Certificate  unless you
provide special payment,  issuance or delivery instructions to the contrary
by completing the applicable part of Form 3 of your Rights Certificate.

     Series B Preferred Stock Certificates.  Subject to satisfaction of the
minimum conditions required,  the Subscription Agent will issue and mail in
accordance  with  the  instruction  of  the  exercising  Rights  Holder,  a
certificate  representing Underlying Shares purchased pursuant to the valid
exercise of Rights,  as soon as practicable  after the Expiration  Date and
all  prorations  and  reductions  contemplated  by the  Offering  have been
effected.  See "THE  RIGHTS  OFFERING  -  Subscription  Privileges"  in the
Prospectus.

     Refunding  of  Excess  Payments.  As soon  as  practicable  after  the
Expiration   Date  and  after  all  prorations   and  possible   reductions
contemplated  by  the  terms  of  the  Offering  have  been  effected,  the
Subscription  Agent will return by mail  without  interest or  deduction to
each Rights Holder  exercising  the  Oversubscription  Privilege any excess
funds received in payment of the Subscription  Price for Underlying  Shares
that were  subscribed  for by such Rights  Holder but not allocated to such
Rights Holder pursuant to the Oversubscription Privilege.

     4. To Sell or Transfer Rights.

     Sale of Rights  through a Bank,  Broker or Other  Nominee.  To sell or
transfer all Rights  evidenced by a Rights  Certificate  through your bank,
broker  or other  nominee,  so  indicate  on  Forms 2 and 4 of your  Rights
Certificate  and  deliver  your  properly  completed  and  executed  Rights
Certificate  to your bank or  broker.  Your  Rights  Certificate  should be
delivered  to your bank or broker in  sufficient  time for the Rights to be
sold. If Form 2 of your Rights Certificate is completed without designating
a transferee, the Subscription Agent may thereafter treat the bearer of the
Rights  Certificate as the absolute owner of all of the Rights evidenced by
such Rights  Certificate for all purposes,  and the Subscription Agent will
not be affected by any notice to the contrary.  Because your bank or broker
cannot issue Rights Certificates,  if you wish to sell less than all of the
Rights evidenced by a Rights  Certificate,  either your bank or broker must
instruct the  Subscription  Agent as to the action to be taken with respect
to the Rights  that are not to be sold,  or your bank or broker  must first
have your Rights Certificate  divided into Rights  Certificates  evidencing
the appropriate  numbers of Rights by following the instructions in Section
5 below.

     Transfer of Rights to a Designated Transferee. To sell or transfer all
of your  Rights  to a  transferee  other  than a bank or  broker,  you must
complete Form 2 of your Rights  Certificate  in its  entirety,  execute the
Rights  Certificate and have your signature  guaranteed by a bank,  broker,
dealer,   municipal   securities  dealer,   municipal   securities  broker,
government  securities dealer,  government securities broker, credit union,
national  securities  exchange,   registered  securities  association,   or
clearing  agency  or  savings   association  under  an  approved  Signature
Guarantee Medallion Program (an "Eligible Guarantor Institution"). A Rights
Certificate  that has been  properly  transferred  in its  entirety  may be
exercised by a new Rights Holder  without  having a new Rights  Certificate
issued.  To  exercise,  or  otherwise  take action with  respect to, such a
transferred  Rights  Certificate,  the new Rights Holder should deliver the
Rights  Certificate,  together with payment of the applicable  Subscription
Price and complete separate instructions signed by the new Rights Holder to
the Subscription  Agent in sufficient time to permit the Subscription Agent
to take the desired  action.  The new Rights  Holder may not  exercise  the
Oversubscription  Privilege.  The new  Rights  Holder may be subject to the
prorations and possible  reductions  described in Section 1 above. Only the
Subscription Agent can issue Rights Certificates. However, you may transfer
a portion of the Rights  evidenced by a single Rights  Certificate (but not
fractional  Rights)  by  delivering  to the  Subscription  Agent  a  Rights
Certificate  properly endorsed for transfer,  with instructions to register
that portion of the Rights indicated  therein in the name of the transferee
and to issue a new Rights  Certificate  to the  transferee  evidencing  the
transferred Rights. In that event, a new Rights Certificate  evidencing the
balance of the Rights will be issued to you or, if you so  instruct,  to an
additional   transferee.   Alternatively,   you  may  divide   your  Rights
Certificate  into Rights  Certificates  evidencing  appropriate  numbers of
Rights for transfer by following the instructions in Section 5 below.

     If you wish to  transfer  all or a  portion  of your  Rights  (but not
fractional  Rights),  you should allow a sufficient amount of time prior to
the Expiration  Date for (i) the transfer  instructions  to be received and
processed by the  Subscription  Agent,  (ii) new Rights  Certificates to be
issued and  transmitted to the  transferor(s),  with respect to transferred
Rights,  and to you with respect to retained Rights,  if any, and (iii) the
Rights evidenced by the new Rights  Certificates to be exercised or sold by
the  recipients  thereof.  Such amount of time could range from four to six
business  days,  depending  upon the method by which delivery of the Rights
Certificates  and payment is made and the number of transactions  which you
instruct  the  Subscription  Agent to effect.  Neither  the company nor the
Subscription Agent will have any liability to a transferee or transferor of
Rights if Rights Certificates are not received in time for exercise or sale
prior to the Expiration Date.

     THE RIGHTS  WILL ONLY BE GRANTED  TO,  AND MAY ONLY BE  EXERCISED  BY,
INVESTORS  RESIDING IN THE  FOLLOWING  JURISDICTIONS  WHERE THE  SECURITIES
OFFERED  HEREBY  HAVE  BEEN  REGISTERED  WITH  THE  APPROPRIATE  SECURITIES
REGULATORY  AUTHORITIES  OR WHERE AN EXEMPTION  FROM SUCH  REGISTRATION  IS
AVAILABLE:  OUTSIDE THE UNITED  STATES AND IN  COLORADO,  CONNECTICUT,  THE
DISTRICT OF COLUMBIA,  ILLINOIS,  INDIANA,  IOWA, KANSAS, MAINE,  MARYLAND,
MASSACHUSETTS,  NEVADA, NEW JERSEY, NEW YORK, NORTH CAROLINA, RHODE ISLAND,
VERMONT, VIRGINIA AND WASHINGTON. RIGHTS WILL NOT BE DISTRIBUTED TO HOLDERS
WHO RESIDE IN STATES  WHERE THE  SECURITIES  OFFERED  HEREBY  HAVE NOT BEEN
REGISTERED OR WHERE AN EXEMPTION FROM  REGISTRATION  IS NOT  AVAILABLE.  IN
ADDITION,  THE SERIES B PREFERRED STOCK MAY NOT BE TRANSFERRED TO RESIDENTS
OF  ANY  OF  THE  FOLLOWING  STATES:  ARIZONA,   FLORIDA,   GEORGIA,  OHIO,
PENNSYLVANIA OR TEXAS.

     5. To Divide a Rights Certificate.

     To have  your  Rights  Certificate  divided  into  two or more  Rights
Certificates,  evidencing  the same aggregate  number of rights,  send your
Rights Certificate, together with complete separate instructions (including
specification  of the  denominations  into which you wish your Rights to be
divided) signed by you, to the  Subscription  Agent,  allowing a sufficient
amount of time for new Rights  Certificates  to be issued and  returned  so
they can be used prior to the Expiration Date. Alternatively, you may ask a
bank or broker to effect such actions on your behalf.  Your  signature must
be guaranteed by an Eligible  Guarantor  Institution (as defined in Section
4) if any of the new Rights  Certificates  are to be issued in a name other
than that in which the  original  Rights  Certificate  was  issued.  Rights
Certificates may not be divided into fractional Rights, and any instruction
to do so will be rejected.  As a result of delays in the mail,  the time of
the transmittal,  the necessary  processing time and other factors,  you or
your  transferee  may not receive such new Rights  Certificates  in time to
enable the Rights  Holder to complete a sale or exercise by the  Expiration
Date.  Neither  the Company  nor the  Subscription  Agent will be liable to
either a transferor or transferee for any such delays.

     6. Signatures.

     Execution by Rights  Holder.  The signature on the Rights  Certificate
must correspond with the name of the Rights Holder exactly as it appears on
the  face of the  Rights  Certificate  without  any  alteration  or  change
whatsoever.  Persons who sign the Rights Certificate in a representative or
other  fiduciary  capacity must indicate  their  capacity when signing and,
unless  waived by the  Company in its sole and  absolute  discretion,  must
present to the Subscription Agent satisfactory  evidence of their authority
to so act.

     Execution  by  Person  Other  than  Rights   Holder.   If  the  Rights
Certificate  is executed by a person other than the Rights  Holder named on
the face of the Rights  Certificate,  proper  evidence of  authority of the
person executing the Rights Certificate must accompany the same unless, for
good cause, the Company dispenses with proof of authority.

     Signature Guarantees. Unless your Rights Certificate (i) provides that
the Underlying  Shares to be issued  pursuant to the exercise of the Rights
represented  thereby are to be issued to you or (ii) is  submitted  for the
account  of an  Eligible  Institution  (as  defined  in  Section  1),  your
signature  on each Rights  Certificate  must be  guaranteed  by an Eligible
Guarantor Institution (as defined in Section 4).

     7. Method of Delivery.

     The  method of  delivery  of Rights  Certificates  and  payment of the
Subscription  Price to the Subscription  Agent will be at your election and
risk,  but,  if sent by mail,  you are  urged  to send  such  materials  by
registered mail, properly insured,  with return receipt requested,  and are
urged  to allow a  sufficient  number  of days to  ensure  delivery  to the
Subscription  Agent  and,  if you are  paying  by  uncertified  check,  the
clearance  of payment of the  Subscription  Price  prior to the  Expiration
Date.  Because  uncertified checks may take at least five (5) business days
to clear,  you are strongly urged to consider payment by means of certified
check, cashier's check, money order or wire transfer.

     8. Lost, Stolen, Destroyed or Mutilated Rights Certificates.

     Upon  receipt by the  Company and the  Subscription  Agent of evidence
reasonably  satisfactory  to  them  of  the  loss,  theft,  destruction  or
mutilation  of a  Rights  Certificate,  and,  in case  of  loss,  theft  or
destruction,  of indemnity  and/or security  satisfactory to them, in their
sole  discretion,  and  reimbursement  to the Company and the  Subscription
Agent of all reasonable expenses incidental thereto, and upon surrender and
cancellation  of the Rights  Certificate,  if mutilated,  the  Subscription
Agent will make and deliver a new Rights  Certificate  of like tenor to the
registered Rights Holder in lieu of the Rights Certificate so lost, stolen,
destroyed  or  mutilated.  If required  by the Company or the  Subscription
Agent,  an indemnity  bond must be sufficient in the judgment of each party
to protect the Company,  the  Subscription  Agent or any agent thereof from
any loss  which any of them may  suffer  if a lost,  stolen,  destroyed  or
mutilated Rights Certificate is replaced. See Exhibit B hereto.

     9. Special  Provisions  Relating to The Delivery of Rights through The
Depository Trust Company.

     In the case of Rights that are held of record  through The  Depository
Trust Company ("DTC"),  exercises of the Basic Subscription  Privilege (but
not the  Oversubscription  Privilege) may be effected by instructing DTC to
transfer  Rights (such Rights being "DTC  Rights")  from the DTC account of
the Rights Holder to the DTC account of the  Subscription  Agent,  together
with payment of the Subscription Price for each Underlying Share subscribed
for  pursuant to the Basic  Subscription  Privilege.  The  Oversubscription
Privilege  in respect of DTC Rights may not be  exercised  through DTC. The
holder of DTC Rights may exercise the Oversubscription Privilege in respect
thereof by properly executing and delivering to the Subscription  Agent, at
or  prior  to  the  Expiration  Date,  a DTC  Participant  Oversubscription
Exercise  Form, in the form  available  from the  Information  Agent or the
Subscription Agent,  together with payment of the appropriate  Subscription
Price  for the  number  of Excess  Shares  for  which the  Oversubscription
Privilege is exercised.

     If a Notice of Guaranteed  Delivery  relates to Rights with respect to
which exercise of the Basic Subscription Privilege will be made through DTC
and such Notice of Guaranteed  Delivery also relates to the exercise of the
Oversubscription  Privilege,  a DTC Participant  Oversubscription  Exercise
Form must also be  received  by the  Subscription  Agent in respect of such
exercise of the  Oversubscription  Privilege at or prior to the  Expiration
Date.

     10. Transfer Taxes.

     Except for  certain  fees paid to  broker-dealers  and  charged by the
Subscription Agent that will be paid by the Company, all commissions,  fees
and other expenses  (including  brokerage  commissions  and transfer taxes)
incurred in connection  with the purchase,  sale or exercise of Rights will
be for the account of the  transferring  Holder of the Rights,  and none of
such  commissions,  fees or  expenses  will be paid by the  Company  or the
Subscription Agent.

     11. Irregularities.

     All questions concerning the timelines, validity, form and eligibility
of any  exercise  of  Rights  will  be  determined  by the  Company,  whose
determinations  will  be  final  and  binding.  The  Company  in  its  sole
discretion,  may waive any  defect or  irregularity,  or permit a defect or
irregularity  to be  corrected  within  such time as it may  determine,  or
reject the purported exercise of any Right. Rights Certificates will not be
deemed to have been received or accepted until all irregularities have been
waived or cured  within  such time as the Company  determines,  in its sole
discretion.  Neither the Company,  nor the Subscription Agent will be under
any duty to give  notification  of any defect or irregularity in connection
with the  submission  of Rights  Certificates  or incur any  liability  for
failure to give such notification. The Company reserves the right to reject
any exercise if such  exercise is not in  accordance  with the terms of the
Offering or not in proper form or if the acceptance thereof or the issuance
of the shares of Series B Preferred Stock pursuant  thereto could be deemed
unlawful.



                                                                  EXHIBIT
                                                                  TO
                                                                  INSTRUCTIONS

                         IMPORTANT TAX INFORMATION

     Under the U.S. Federal income tax law, (1) dividend  payments that may
be made by the Company on shares of Common  Stock  issued upon the exercise
of Rights,  and (2) payments that may be remitted by the Subscription Agent
to Rights Holders in respect of Rights sold on such Rights  Holders' behalf
by the Subscription Agent, may be subject to backup  withholding,  and each
Rights  Holder who either  exercises  Rights or requests  the  Subscription
Agent  to  sell  Rights  should  provide  the  Subscription  Agent  (as the
Company's agent, in respect of exercised Rights, and as payer in respect of
Rights sold by the  Subscription  Agent) with such Rights Holders'  correct
taxpayer   identification   number  on  the  Substitute  Form  W-9  in  the
Subscription Right Certificate. If such Rights Holder is an individual, the
taxpayer identification number is his or her social security number. If the
Subscription Agent is not provided with the correct taxpayer identification
number in connection  with such payments,  the Rights Holder may be subject
to a $50 penalty imposed by the Internal Revenue Service.

     Exempt Rights Holders  (including,  among others, all corporations and
certain foreign  individuals)  are not subject to these backup  withholding
and  information  reporting   requirements.   In  general,  for  a  foreign
individual to qualify as an exempt recipient, the Rights Holder must submit
a  statement,  signed  under the  penalties  of perjury,  attesting to that
individual's  exempt  status.  Such  statements  can be  obtained  from the
Subscription  Agent.  See the  enclosed  Guidelines  for  Certification  of
Taxpayer  Identification  Number  on  Substitute  Form  W-9 for  additional
instructions.

     If backup withholding  applies, the Company or the Subscription Agent,
as the case may be, will be required to withhold  31% of any such  payments
made to the Rights Holder.  Backup  withholding  is not an additional  tax.
Rather,  the tax liability of persons subject to backup withholding will be
reduced  by the  amount  of tax  withheld.  If  withholding  results  in an
overpayment of taxes, a refund may be obtained.

Purpose of Substitute Form W-9

     To prevent backup withholding, the Rights Holder is required to notify
the Subscription Agent of his or her correct taxpayer identification number
by  completing  the  Substitute   Form  W-9  included  as  a  part  of  the
Subscription Right Certificate certifying that the taxpayer  identification
number  provided  on  Substitute  Form W-9 is correct  (or that such Rights
Holder is awaiting a taxpayer identification number).

What Number to Give the Subscription Agent

     The Rights Holder is required to furnish the  Subscription  Agent such
Rights Holder's social security number or employer  identification  number.
If the  Rights  are in more  than  one  name or are not in the  name of the
actual owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification  Number on Substitute  Form W-9 for  additional  guidance on
which number to report.


                                                                  EXHIBIT A
                                                                  TO
                                                                  INSTRUCTIONS

    NOTICE OF GUARANTEED DELIVERY FOR SHARES OF SERIES B PREFERRED STOCK
               OF CLEAN DIESEL TECHNOLOGIES, INC. SUBSCRIBED
                    FOR UNDER BASIC SUBSCRIPTION AND THE
                        OVER-SUBSCRIPTION PRIVILEGE

     As set forth in the Prospectus  under "THE RIGHTS OFFERING  --Exercise
of Rights", this form or one substantially equivalent hereto may be used as
a means  of  effecting  subscription  and  payment  for all  shares  of the
Company's   Series  A  Preferred  Stock  subscribed  for  under  the  Basic
Subscription  and  the  Over-Subscription   Privilege.  Such  form  may  be
delivered by hand or sent by facsimile  transmission,  overnight courier or
mail to the Subscription Agent.

                         The Subscription Agent is:

                      CHASEMELLON SHAREHOLDER SERVICES


By Mail:                    By Hand:                      By Express Mail
   ChaseMellon Shareholder     ChaseMellon                or Overnight Courier:
   Services                    Shareholder Services,          ChaseMellon
   Post Office Box 3301        L.L.C.                     Shareholder Services,
   South Hackensack, NJ 07606  120 Broadway               85 Challenger Road,
                               13th Floor                 Overpeck Centre,
                               New York, NY  10271    Ridgefield Park, NJ 07660
By Facsimile:                                             Attn: Reorg. Dept.
   ChaseMellon
   Shareholder Services
   (201) 296-4293

       DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF
 INSTRUCTIONS VIA A TELECOPY OR FACSIMILE NUMBER, OTHER THAN AS SET FORTH
                ABOVE, DOES NOT CONSTITUTE A VALID DELIVERY

The New York Stock  Exchange  member  firm or bank or trust  company  which
completes this form must communicate the guarantee and the number of Shares
subscribed for (under both the Basic Subscription and the Over-Subscription
Privilege)  to the  Subscription  Agent  and must  deliver  this  Notice of
Guaranteed  Delivery  of Payment,  guaranteeing  delivery of (i) payment in
full for all  Subscribed  Shares and (ii) a properly  completed  and signed
copy of the Rights  Certificate,  to the  Subscription  Agent prior to 5:00
p.m.  New York City time,  on the  Expiration  Date.  Failure to do so will
result in a forfeiture of the rights.


                                 GUARANTEE

     The  undersigned,  a member  firm of the New York Stock  Exchange or a
bank or trust company, (i) guarantees delivery to the Subscription Agent by
3 trading  days after the  expiration  or all  extensions  thereof of (A) a
properly completed and executed Rights Certificate,  and (B) payment of the
full Subscription Price for Shares subscribed for on Basic Subscription and
pursuant  to the  Over-Subscription  Privilege,  as  subscription  for such
Shares as indicated herein or in the Rights Certificate.

---------------------------------------   -------------------------------------
NUMBER OF SHARES ON BASIC SUBSCRIPTION    NUMBER OF SHARES ON OVER-SUBSCRIPTION
                                          PRIVILEGE


--------------------------------------    -------------------------------------
Name of Firm                              Authorized Signature


--------------------------------------    -------------------------------------
Address                                   Title


                                          Name:
--------------------------------------         --------------------------------
Zip Code                                        (Please Type or Print)


--------------------------------------    -------------------------------------
Telephone Number                          Date


                                                               EXHIBIT B
                                                               TO
                                                               INSTRUCTIONS

             AFFIDAVIT OF LOST, STOLEN, DESTROYED OR MUTILATED
                            RIGHT CERTIFICATE(S)

CERTIFICATE    NO(s)    _______________________    (if    available)    for
_____________________  Rights to purchase Series B Preferred Stock of Clean
Diesel Technologies, Inc.

I  am  the  lawful  owner  of  the   above-described   representing  Rights
Certificate(s)   to  purchase  shares  of  Common  Stock  of  Clean  Diesel
Technologies,  Inc. (the "Company") at an exercise price of $___ per share.
The Rights Certificate(s) has (have) not been exercised,  endorsed, cashed,
negotiated,  transferred,  assigned or otherwise disposed of. I have made a
diligent search for the Rights  Certificate(s) and have been unable to find
it (them) and make this  affidavit  for the purpose of inducing the Company
and ChaseMellon  Shareholder  Services to issue a new Rights Certificate of
like tenor,  and hereby agree to surrender  the Rights  Certificate(s)  for
cancellation  should I, at any time,  find the  Rights  Certificate(s).  In
consideration  of the  receipt of a new Rights  Certificate(s),  I agree to
completely indemnify, protect and hold harmless the Company and ChaseMellon
Shareholder   Services  and  any  other  party  to  the  transaction   (the
"Obligees") from and against all loss,  costs and damages,  including court
costs and  attorneys'  fees,  which they may be subject to or liable for in
respect of the cancellation of Rights Certificate(s).  The rights according
to the Obligees  under the preceding  sentence  shall not be limited by the
negligence,  inadvertance,  accident,  oversight  or  breach of any duty or
obligation  on the  part of the  Obligees  or  their  respective  officers,
employees and agents or their failure to inquire into,  contest or litigate
any claim,  whenever such negligence,  inadvertence,  accident,  oversight,
breach or failure may occur or have occurred.

                                     PLEASE DATE AND SIGN BELOW:


                                     Dated:
                                            ----------------, 1988
                                    
                                     --------------------------------------
                                          (Signature of Holder)


                                     --------------------------------------
                                          (Signature of Holder)

(Must be signed above by registered holder(s) or by person(s) authorized to
receive the cash payments)

