February 24, 2009

James K. Prueitt3 Chandler DriveBallston Lake, NY 12019

|Re: | Amendment to Employment Agreement,
      Vice President of Engineering and Operations, MTI MicroFuel Cells
      Inc.
|--- | ---------------------------------------------------------------------------------------------------------------------

Dear Jim:

This letter amends our recent letter
agreement dated December 31, 2008 (the Prior Letter) with respect to the
terms of your employment with MTI MicroFuel Cells Inc.(MTI Micro or the Company), a subsidiary of
Mechanical Technology, Incorporated(MTI), as Vice President of Engineering and Operations of MTI Micro. The
terms of your employment agreement as set forth in the Prior Letter are hereby
amended effective as of February 20, 2009 as follows:

1.Base
Salary Deferral. Effective March 1, 2009, and
continuing through the earlier to occur of May 31, 2009 or the initial closing
of a Series A Preferred Stock financing of MTI Micro (the Deferral Period), an
amount equal to 10% of your monthly base salary ($1,569.16 per month) shall be
temporarily deferred (hereinafter, Deferred Salary). In
consideration of this salary deferral, at the end of the Deferral Period, you
will be either (A) paid an amount equal to your total Deferred Salary, less
applicable tax withholding, paid in equity interests in (i) MTI Micro Series A
Preferred Stock based on the per share valuation paid by the investors in the
Series A Preferred Stock financing, if the next MTI Micro preferred financing
closes on or before May 31, 2009, or (ii) MTI Micro common stock based on a per
share valuation agreed upon by MTI Micro and the majority of the MTI Micro
bridge note holders, if the next preferred financing does not close on or before
May 31, 2009; or (B) in the event (i) the next preferred financing does not
close on or before May 31, 2009 and the parties cannot agree on a valuation for
MTI Micro common stock, or (ii) a change in control of MTI Micro occurs before
June 30, 2009, or (iii) upon the insolvency of, or commission of any act of
bankruptcy by, MTI Micro, or assignment for the benefit of creditors by MTI
Micro, or filing by or against MTI Micro of a petition in bankruptcy or any
petition for relief under the federal bankruptcy act, then you will be issued a
secured convertible promissory note in the same form as issued to those certain
noteholders participating in the MTI Micro September 2008 bridge financing, as
extended to date (the MTI Micro Bridge
Financing), in the amount of your
Deferred Salary since March 1, 2009, less applicable tax withholding, and you
shall be included as a Holder in the MTI Micro Bridge Financing and entitled
to the same warrant coverage and security interest with respect to your
participation therein as all other participants in the MTI Micro Bridge
Financing, subject to your execution of the applicable documentation.

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2.Entire Agreement; Amendment. You
acknowledge that the Prior Letter, as amended by this letter agreement,
represents the entire understanding between you and the Company and any and all
prior written or oral discussions and agreements between you and the Company
relating to the subject matter of the Prior Letter, as amended by this letter
agreement, or your employment with the Company. Neither the Prior Letter nor
this letter agreement can be amended except in a writing signed by both you and
an authorized representative of the Company. The Prior Letter and this letter
agreement is binding on our respective successors and assigns; provided,
however, that your obligations are personal and shall not be assigned by you.

If the
foregoing is acceptable, please countersign this letter in the space provided
below and return it to me.

Sincerely,

MTI MICROFUEL CELLS INC.

|/s/ Peng K. Lim                       | 
|------------------------------------- | 
|Peng
      K. Lim                    
|President and Chief Executive Officer

|Agreed and
      Accepted by: | /s/ James K. Prueitt   | on | 2/24/09
|----------------------------- | ---------------------- | -- | -------
|                              | James K.
      Prueitt |    | (Date) 

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