Employment Agreement BY And Between International Fuel Technology, Inc. And Gary S. Hirstein, Dated

EMPLOYMENT AGREEMENT


THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into by and between INTERNATIONAL FUEL TECHNOLOGY, INC. , a Nevada corporation (the "Company"), and GARY S. HIRSTEIN (the "Employee"), and is dated as of the fourth day of April, 2005.


RECITALS


WHEREAS , the Chief Executive Officer ("CEO") of Company, in consultation with the Board of Directors, has determined that it is in the best interest of the Company and its shareholders to employ the Employee in the position set forth below, and the Employee desires to serve in that capacity, and;


NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants and promises herein contained, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and Employee hereby agree as follows:


1. Employment Period . The Company shall employ the Employee, and the Employee shall serve the Company, on the terms and conditions set forth in this Agreement, for the period commencing on April 1, 2005 and ending on March 31, 2008 ("Employment Period")


2. Position and Duties .


(a) The Employee shall serve as Executive Vice President and Chief Financial Officer of the Company, reporting to the Chief Executive Officer, with such duties, responsibilities and authorities as are customarily assigned to such position, and such other duties and responsibilities not inconsistent therewith as may be assigned to her from time to time by the CEO of the Company.


(b) During the Employment Period, and excluding any periods of vacation and sick leave to which the Employee is entitled, the Employee shall devote his full-time efforts to the business and affairs of the Company and use his best efforts to carry out such responsibilities faithfully and efficiently. It shall not be considered a violation of the foregoing for the Employee to (i) serve on corporate, civic or charitable boards or committees or (ii) deliver lectures or fulfill speaking engagements so long as such activities do not interfere with the performance of his responsibilities as an employee of the Company in accordance with this Agreement or violate the provisions of Section 7 of this Agreement.


(c) Employee's responsibilities shall include, but not be limited to, the following: (i) within the first twelve months of employment, preparation of a comprehensive plan for compensation and benefits for executive employees, such plan to be presented to the Executive Compensation Committee of Company's Board of Directors; and (ii) within the first sixty (60) days of employment, preparation of a business plan for the Company, with mutually agreed upon milestones for its implementation.


(d) Subject to the other terms and conditions of this Agreement, within the initial six (6) months of Employee's employment, he will be a nominee to the Company's Board of Directors.


3. Compensation .


(a) Base Salary . During the Employment Period the Employee shall receive an annual base salary (the "Annual Base Salary") at the rate of One Hundred and Seventy-Five Thousand Dollars ($175,000.00), such base salary to be reviewed annually during the Employment Period concomitant with a review of the performance of Employee. The Annual Base Salary shall be payable monthly on or about the tenth of the month by wire transfer to an account designated by Employee to Company .


(b) Stock Options . The Employee shall receive options to purchase shares in the Company in accordance with the attached Stock Option Agreement, a copy of which is attached hereto and incorporated herein by reference.


(c) Other Benefits . During the Employment Period: (i) the Employee and his family shall be entitled to participate in all benefit programs of the Company, including, but not limited to, health and dental insurance coverage or reimbursement of the Employee's reasonable cost to maintain same to be added to the Annual Base Salary; and (ii) the Employee and/or the Employee's family, as the case may be, shall be eligible for participation in, and shall receive all benefits under, all welfare benefit plans, practices, policies and programs provided by the Company, including, but not limited to any comprehensive dental plan, retirement plans and profit sharing programs the Company may provide to any other employees from time to time.


(d) Expenses . During the Employment Period, the Employee shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Employee in carrying out the Employee's duties under this Agreement, including all reasonable commuting and living costs while in St. Louis, until such time that the location of Employee's office is agreed and decided by all parties, provided that the Employee complies with the policies, practices and procedures of the Company for submission of expense reports, receipts and similar documentation of such expenses.


(e) Fringe Benefits . During each year of the Employment Period commencing on the date of the Agreement, the Employee shall be entitled to 25 paid days of vacation and other fringe benefits, in each case, on such terms and conditions as are determined by the Board of Directors of the Company.


4. Termination of Employment .


(a) Probationary Period . Either Company or Employee may terminate the Agreement at any time within ten (10) days after the expiration of the first ninety (90) days of the Agreement ("Probationary Period") by giving written notice to the other party. If termination is by the Company, then upon the giving of such notice, Employee shall be paid any accrued salary for the pay period in which the notice is proffered, plus a lump sum payment of $49,315, less applicable withholdings and deductions.


(b) Death or Disability . The Employee's employment shall terminate automatically upon the Employee's death during the Employment Period. The Company shall be entitled to terminate the Employee's employment because of the Employee's Disability during the Employment Period. "Disability" means that (i) the Employee has been unable, for a period of 180 days to perform the Employee's duties under this Agreement, as a result of physical or mental illness or injury, and (ii) a physician selected by the Company or its insurers, and acceptable to the Employee or the Employee's guardian or legal representative, has determined that the Employee's incapacity is total and permanent. A termination of the Employee's employment by the Company for Disability shall be communicated to the Employee by written notice, and shall be effective on the 30th day after receipt of such notice by the Employee (the "Disability Effective Date"), unless the Employee is able to, and does, return to full-time performance of the Employee's duties before the Disability Effective Date.


(c) By the Company .


(i) The Company may terminate the Employee's employment during the Employment Period for Cause or without Cause. For the purposes of the Agreement, "Cause" shall mean:


A. any fraud, embezzlement or other dishonesty of the Employee that materially and adversely affects the Company's business or reputation; or

B. the Employee's conviction for a felony or entering into a plea of nolo contendere with respect to a felony; or

C. disclosure to any party outside the Company any of the Confidential Information as hereinafter defined; or

D. the determination by a medical expert that Employee has an addiction to alcohol, controlled or prescription medications or illegal drugs: or

E. the refusal by Employee to perform his material duties and

obligations hereunder; or Employee's willful and intentional misconduct in the performance of his material duties and obligations.

(ii) A termination of employment by the Company for Cause shall be effectuated by giving the Employee written notice ("Notice of Termination for Cause") of the termination. Termination of employment by the Company for Cause shall be effective on the date when the Notice of Termination for Cause is given, unless the notice sets forth a later date (which date shall in no event be later than thirty (30) days after the notice is given).


(iii) A termination of the Employee's employment by the Company without Cause shall be effected by giving the Employee written notice of the termination, and Employee shall be paid accrued salary for the pay period in which the notice is given.


(d) By the Employee .


(i) The Employee may terminate employment in the event of a Good Cause Shown. "Good Cause Shown" means:

A. the assignment to the Employee of any duties inconsistent in any respect with paragraph (a) of Section 2 of the Agreement, other than actions that are not taken in bad faith and are remedied by the Company within fifteen (15) days after receipt of notice thereof from the Employee;


B. any failure by the Company to comply with any provision of Section 3 of this Agreement, other than failures that are not taken in bad faith and are remedied by the Company within fifteen (15) days after receipt of notice thereof from the Employee; or


C. the occurrence of a Non-Negotiated Change in Control of the Company. For purposes of this Agreement, "Non-Negotiated Change in Control" shall mean any one or more of the following occurrences:


(I) Any individual, corporation (other than the Company, any trustees or other beneficiary holding securities under any employee benefit plan of the Company, or any Company owned, directly or indirectly, by the Stockholders of the Company in substantially the same proportions as their ownership of stock of the Company), partnership, trust, association, pool, syndicate, or any other entity or any group of persons acting in concert becomes the beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934) of securities of the Company possessing more than one-half (1/2) of the voting power for the election of directors of the Company;


(II) There shall be consummated any consolidation, merger, or other business combination involving the Company or the securities of the Company in which holders of voting securities of the Company immediately prior to such consummation own, as a group, immediately after such consummation, voting securities of the Company (or, if the Company does not survive such transaction, voting securities of the entity surviving such transaction) having less than one-half (1/2) of the total voting power in an election of directors of the Company (or such other surviving corporation); or


(III) There shall be consummated any sale, lease, exchange, or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company (on a consolidated basis) to a party which is not controlled by or under common control with the Company.


(ii) A termination of employment by the Employee for Good Cause Shown shall be effectuated by giving the Company written notice ("Notice of Termination for Good Cause Shown") of the termination, setting forth the conduct of the Company that constitutes Good Cause Shown. Absent a remedy or cure by Company within applicable time frames, a termination of employment by the Employee for Good Cause Shown shall be effective on the fifth business day following the date when the Notice of Termination for Good Cause Shown is given, unless the notice sets forth a later date (which date shall in no event be later than thirty (30) days after ...