
                                                                   Exhibit 10t

                            EMPLOYMENT AGREEMENT



     AGREEMENT  made as of the date set forth below by and between James M.
Valentine,  480 Hemlock Road,  Fairfield,  CT 06430  ("Employee") and Clean
Diesel Technologies, Inc., a Delaware corporation (the "Company"), having a
place of business at Suite 702, 300 Atlantic Street, Stamford, CT 06901.

     WHEREAS,  the Company desires certain services for itself and Employee
desires to contract with the Company to perform such services;

     NOW THEREFORE,  in consideration  of the mutual covenants  hereinafter
recited,  the  sufficiency  of which is hereby  acknowledged,  the  parties
hereto agree as follows:

     1. Term:  This  Agreement  shall commence on August 1, 1996, and shall
continue thereafter until terminated by either party as provided below.

     2. Scope of Work: Title:  Employee shall be appointed as the Executive
Vice  President  and Chief  Operating  Officer of the Company.  The Company
shall also during the term of this agreement cause Employee  annually to be
nominated as a director of the Company. In such employment,  Employee shall
on a full-time  basis direct all of his efforts  toward the  performance of
such  duties  as  shall  be  assigned  to him by the  President  and  Chief
Executive  Officer.  "Full  time" shall mean no other  substantial  outside
business activities.

     3. Salary:  Benefits:  The Company agrees to cause Employee to be paid
for his services hereunder at the rate of US$220,000.00 per year.  Employee
to be  paid  such  amounts  by the  Company  according  to its  normal  and
customary  procedures  from time to time in effect  but not less often than
monthly.  Employee  shall be entitled to  participate  from time to time in
such benefit programs as the Company may customarily extend to its officers
as a class. This agreement may not be construed to prevent the Company from
rescinding  other benefit  programs for Employee so long as such rescission
applies to officers as a class.

     4.  Expenses:  Employee  shall be  reimbursed  by the  Company for all
ordinary  and  necessary  out-of-pocket  expenses  incurred  by Employee in
performing his services  hereunder.  Such expenses to be reported from time
to time by Employee on the Company's  customary  form of expense report and
submitted for approval of the Company.

     5.  Termination of Employment:  (a) Just Cause. The Company may at any
time  terminate  this  agreement  for Just  Cause.  Just  Cause  shall mean
conviction of the employee  under,  or a plea of guilty by the Employee to,
any charge which would  constitute a felony under the laws of  Connecticut;
any  instance  of fraud,  embezzlement,  self-dealing,  insider  trading or
similar  malfeasance with respect to the Company;  or substance abuse which
shall,  in the sole  discretion  of the Board of  Directors of the Company,
limit Employee's performance of his duties.

          (b) Disability. The Company may terminate this agreement upon the
physical disability of Employee.  If the Directors shall determine that, as
a result of physical disability Employee has for a continuous period of six
months  been  substantially  absent  from his  customary  place of work and
unable to perform his customary duties.

          (c) At Will.  Either of Employee or Company  may  terminate  this
agreement  on  written  notice  one  to the  other.  Where  Employee  shall
terminate  this  agreement by resigning  his  employment,  he shall provide
twelve  month's  written  notice  thereof to Company.  Where  Company shall
terminate  this  agreement,   Company  shall  provide  salary  and  benefit
continuation  (in the amount and of the nature then enjoyed by Employee) to
the Employee  month-to-month  for a period of one year,  or until  Employee
shall sooner find other substantially comparable employment.

     6.  Discoveries  and Inventions:  (a) All patentable and  unpatentable
inventions,  discoveries  and ideas which are made or conceived by Employee
during the term of his employment, and which are based upon or arise out of
Employee  services  hereunder  ("Developments")  are or  shall  become  the
Company's  property.  Employee  agrees to disclose  promptly to the Company
each such Development  and, upon the Company's  request and at its expense,
Employee will assist the Company,  or its designee,  in making  application
for Letters Patent in any country in the world.  Employee further agrees to
execute all papers and do all things which may be necessary or advisable to
prosecute such applications, and to transfer to and vest in the Company, or
its  designee,   all  the  right,   title  and  interest  in  and  to  such
Developments,  and all  applications  for patents and Letters Patent issued
thereon.  If for  any  reason  Employee  is  unable  to  effectuate  a full
assignment  of any such  Development,  Employee  agrees to  transfer to the
Company, or its designee,  Employee's  transferable rights, whether they be
exclusive or non-exclusive,  or as a joint inventor or partial owner of the
Development.  No action or inaction  by the  Company  shall in any event be
construed as a waiver or abandonment of its rights to any such  Development
except an instrument in writing  assigned by an authorized  official of the
Company  by which it  specifically  states it  intends  to be bound in such
respect.

     7.  Proprietary  Information:  Employee  will not at any time,  either
during the term of this Agreement or thereafter, disclose to others, or use
for his own benefit or the benefit of others,  any of the  Developments  or
any confidential,  proprietary or secret  information  owned,  possessed or
used by the Company or any of its subsidiaries or affiliates (collectively,
"Proprietary  Information"),   which,  by  way  of  illustration,  but  not
limitation,   includes  devices,  structures,   machines,  data,  know-how,
business opportunities,  marketing plans, forecasts,  unpublished financial
statements,  budgets,  licenses and information  concerning prices,  costs,
employees, customers and suppliers. Employee's undertakings and obligations
under this Paragraph 7 will not apply to any Proprietary Information which:
(a) is or becomes  generally  known to the public through no action on part
of the  Employee  or (b) is  generally  disclosed  to third  parties by the
Company or any of its  subsidiaries  or affiliates  without  restriction on
such third parties. Upon termination of this Agreement or at any other time
upon  request,  Employee  will  promptly  deliver to the Company all notes,
memoranda,  notebooks, computer disks, drawings, designs, three dimensional
figures, photographs,  layouts, diagrams, records, reports, files and other
documents  (and all  copies  or  reproductions  of such  materials)  in his
possession  or under his control,  whether  prepared by him or others which
contain Proprietary  Information.  Employee acknowledges that this material
is the sole  property of the Company or a subsidiary or an affiliate of the
Company.

     8.  Non-Competition:  Following the  termination of Employment for any
reason,  Employee agrees that Employee will not recruit,  entice, induce or
encourage any of the Company's  other employees or consultants to engage in
any activity which,  were it done by Employee,  would violate any provision
of this Agreement.  For a two-year  period after  termination of employment
and before performing any services for others, as employee or consultant or
otherwise,  in the actual lines of business in which Employee has performed
services for the Company,  its  subsidiaries  or affiliates,  Employee will
notify the Company of the general  nature of the  services to be  performed
and the party for whom they will be  performed  and  Employee  will,  also,
prior to undertaking  such service or employment  inform the other party of
the  existence  of this  covenant in this  Agreement  Employee  admits that
breach of his  covenants  hereunder  regarding  the  Company's  Proprietary
information is likely to cause serious economic injury to the Company.

     9.  Assignment:  This  Agreement  may not be assigned by either  party
without the prior written consent of the other party.

     10.Continuing  Obligations:  The  Employee's  covenants  set  forth in
Sections  6,  7,  and 8 above  shall  continue  according  to  their  terms
following the  termination  of this  Agreement,  and,  notwithstanding  the
provision  for  arbitration  below,  such  covenants  may  at any  time  be
judicially enforced by the Company by Injunction.

     11.Governing Law:  Arbitration.  This agreement,  any and all disputes
hereunder or the interpretation hereof or any claim by Employee against the
Company shall be governed by and interpreted under  Connecticut  procedural
and substantive law, and thirty (30) days after notice, shall be determined
solely by arbitration before a single arbitrator in Stamford,  Connecticut,
under the  employment  rules of the  American  Arbitration  Association  in
effect as of the date of this agreement or otherwise agreed by the parties.
The  arbitrator  shall have no power or  authority  to award  exemplary  or
punitive  damages or any statutory or  compounded  damages and shall render
his award in  writing  setting  forth the basis of his  determination.  The
award of the  arbitrator  shall be based on the terms of this agreement and
the law.  Such award shall be final and binding and may be entered into and
enforced in any Court having jurisdiction.

     12.Exclusivity.  The rights of  Employee  against  the Company are not
limited in any way by this Agreement,  and are not intended to be set forth
exclusively  hereunder;  provided,  however, that any and all of Employee's
remedies  with  respect to such  rights,  shall be limited  solely to those
available   in   arbitration   hereunder.   Employee's   rights  to  salary
continuation are in lieu of any severance  benefits provided under policies
of the Company from time to time in effect.

     13.Waiver.  The remedies of Employee  hereunder have been entered into
as a matter of bargain and to the extent any provision of this agreement is
or may be  construed  as a waiver of  employee's  remedies,  Employee  does
hereby waive such remedies.

     14.Notices.  All  notices  hereunder  shall be in writing and shall be
deemed  effective  upon receipt,  if hand delivered or if sent by facsimile
and acknowledged  electronically and confirmed by an original  confirmation
copy  mailed  first  class  postage  prepaid.  Notices by mail  air-courier
service shall be deemed effective upon receipt, if sent first class postage
prepaid  return receipt  requested or by  air-courier  and the sender shall
obtain the signed  receipt  or  confirmation  of  delivery  by the  courier
service.  Otherwise,  notices shall be deemed effective as of the fifth day
after  transmission.  In each  case  notices  shall be  transmitted  to the
address  first given above or such other  address as may be given by notice
as provided herein.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.


EMPLOYEE                              CLEAN DIESEL TECHNOLOGIES, INC.


   /s/ James M. Valentine                  /s/ Jeremy D. Peter-Hoblyn
------------------------------        -----------------------------------
James M. Valentine                      Jeremy D. Peter-Hoblyn, President



Date:    September 12, 1997           Date:  September 12, 1997
      ------------------------              -----------------------------




