Document:

<PAGE>

                                 LOAN AGREEMENT

                                      among

                                 FUEL TECH, INC.

                                       and

                       WACHOVIA BANK, NATIONAL ASSOCIATION

                            Dated as of July 31, 2006

<PAGE>

<TABLE>
                                TABLE OF CONTENTS
<S>               <C>                                                                                          <C>
                                                                                                               PAGE

ARTICLE I DEFINITIONS.............................................................................................1

ARTICLE II CREDIT ACCOMMODATIONS..................................................................................6

         2.1      The Revolving Credit Facility...................................................................6
         2.2      Interest........................................................................................8
         2.3      Borrowing, Payments and Computations............................................................9
         2.4      Prepayments.....................................................................................9
         2.5      Requirements of Law............................................................................10

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE BORROWER.......................................................10

         3.1      Good Standing of the Borrower; Authorization...................................................10
         3.2      Compliance with Laws and Other Agreements......................................................11
         3.3      No Conflict; Governmental Approvals............................................................11
         3.4      Financial and Other Information Regarding Borrower.............................................11
         3.5      Taxes..........................................................................................11
         3.6      Encumbrances and Guaranties....................................................................11
         3.7      Material Adverse Changes.......................................................................12
         3.8      Margin Securities..............................................................................12
         3.9      ERISA..........................................................................................12
         3.10     Pending Litigation.............................................................................12
         3.11     Valid, Binding and Enforceable.................................................................12
         3.12     No Untrue Statements...........................................................................12
         3.13     Material Contracts.............................................................................13
         3.14     Business Interruptions.........................................................................13

ARTICLE IV CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE BANK...................................................13

         4.1      Documents to be Delivered by the Borrower at Closing...........................................13
         4.2      Conditions Precedent to Making Revolving Credit Loans..........................................14

ARTICLE V AFFIRMATIVE COVENANTS OF THE BORROWER..................................................................14

         5.1      Use of Proceeds................................................................................14
         5.2      Financial Statements and Other Reports.........................................................14
         5.3      Ordinary Course of Business; Records...........................................................15
         5.4      Information for the Bank.......................................................................15
         5.5      Insurance......................................................................................15
         5.6      Maintenance....................................................................................15
         5.7      Taxes..........................................................................................15
         5.8      Leases.........................................................................................16
         5.9      Existence; Certain Rights; Laws................................................................16
         5.10     Notice of Litigation or Other Proceedings......................................................16
         5.11     Indebtedness...................................................................................16
         5.12     Notice of Events of Default....................................................................16
</TABLE>

                                        i
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<TABLE>
<S>               <C>                                                                                            <C>
         5.13     ERISA..........................................................................................16
         5.14     Deposit Accounts...............................................................................17
         5.15     Financial Covenants............................................................................17
         5.16     Compliance with Environmental Laws.............................................................17
         5.17     Management.....................................................................................17
         5.18     Further Actions................................................................................17

ARTICLE VI NEGATIVE COVENANTS....................................................................................17

         6.1      Fundamental Changes............................................................................17
         6.2      Indebtedness...................................................................................18
         6.3      Encumbrances...................................................................................18
         6.4      Guaranties.....................................................................................19
         6.5      Sales and Lease-Backs..........................................................................19
         6.6      Loans and Investments..........................................................................19
         6.7      Change in Business.............................................................................20
         6.8      Intentionally Omitted..........................................................................20
         6.9      ERISA..........................................................................................20
         6.10     Restricted Payments............................................................................20
         6.11     Compliance with Federal Reserve Board Regulations..............................................20
         6.12     Amendment of Documents.........................................................................20
         6.13     Prepayment of Indebtedness.....................................................................20
         6.14     Intercompany Restriction.......................................................................21
         6.15     Restrictions on Stock Transfer.................................................................21
         6.16     Transactions with Affiliates...................................................................21

ARTICLE VII EVENTS OF DEFAULT....................................................................................21

         7.1      Failure to Pay.................................................................................21
         7.2      Breach of Covenants or Conditions..............................................................22
         7.3      Defaults in Other Agreements...................................................................22
         7.4      Agreements Invalid.............................................................................22
         7.5      False Warranties; Breach of Representations....................................................22
         7.6      Judgments......................................................................................22
         7.7      Bankruptcy or Insolvency of the Borrower.......................................................22
         7.8      Other Agreements...............................................................................23
         7.9      Material Adverse Change........................................................................23

ARTICLE VIII REMEDIES............................................................................................23

         8.1      Further Advances; Acceleration; Setoff.........................................................23
         8.2      Further Remedies...............................................................................24

ARTICLE IX MISCELLANEOUS.........................................................................................24

         9.1      Remedies Cumulative; No Waiver.................................................................24
         9.2      Notices........................................................................................24
         9.3      Costs, Expenses and Attorneys' Fees............................................................25
         9.4      Survival of Covenants..........................................................................25
         9.5      Counterparts; Effectiveness....................................................................25
         9.6      Headings.......................................................................................25
         9.7      Payment Due On A Day Other Than A Business Day.................................................26
</TABLE>

                                       ii
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<S>               <C>                                                                                            <C>

         9.8      JUDICIAL PROCEEDINGS...........................................................................26
         9.9      Governing Law..................................................................................26
         9.10     Integration....................................................................................26
         9.11     Amendment and Waiver...........................................................................26
         9.12     Successors and Assigns.........................................................................26
         9.13     Severability of Provisions.....................................................................27
         9.14     JURY WAIVER....................................................................................27
         9.15     Indemnification................................................................................27
         9.16     Patriot Act Notice.............................................................................28

</TABLE>

                                      iii

<PAGE>
Exhibit 10.1
                                 LOAN AGREEMENT

                  THIS LOAN AGREEMENT ("AGREEMENT"), dated as of July 31, 2006
is by and between FUEL TECH, INC., a Massachusetts corporation (the "BORROWER"),
and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association (the
"BANK").

                                   BACKGROUND

                  The Bank and the Borrower desire to set forth the terms and
conditions under which the Bank will make available to the Borrower certain
credit facilities to be used for the purposes specified in this Agreement.
Accordingly, the Bank and the Borrower, each intending to be legally bound
hereby, agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

                  The following terms shall have the following meanings in this
Agreement:

                  "Affiliate" shall mean any Subsidiary of the Borrower and any
Person or entity that, now or hereafter, directly or indirectly through one or
more intermediaries, controls, is controlled by or is under common ownership or
control with the Borrower. For purposes of this definition, the terms "control,"
"controls" and "controlled" shall refer to the power to determine the management
or policies of a Person, whether resulting from an official position or capacity
with such Person, direct or indirect beneficial ownership of at least ten
percent (10%) of the voting securities or other equity interests of such Person,
or otherwise.

                  "Agreement" shall mean this Agreement, together with all
exhibits, amendments, modifications and supplements hereto as may be in effect
from time to time.

                  "Applicable Law" shall mean all applicable provisions of (i)
constitutions, statutes, rules, regulations and orders of governmental
authorities of any kind having jurisdiction over the Bank or the Borrower, (ii)
authorizations, consents, approvals, and licenses of such governmental
authorities, (iii) judgments, and (iv) common law and equity.

                  "Bank" shall have the meaning specified in the initial
paragraph of this Agreement, together with its successors and assigns.

                  "Borrower" shall have the meaning specified in the initial
paragraph of this Agreement, together with its successors and permitted assigns.

                  "Business Day" shall mean any day other than a Saturday,
Sunday, or other day on which commercial banks in Philadelphia, Pennsylvania are
authorized or required to close under the laws of the State of Illinois and, if
the applicable day relates to an LIBOR-Based Rate Loan, or notice with respect
to a LIBOR-Based Rate Loan, a day on which dealings in United States dollar
deposits are also carried on in the London interbank market and banks are open
for business in London.

<PAGE>

                  "Capital Expenditures" shall mean any expenditure that would
be classified as a capital expenditure on a statement of cash flow of the
Borrower prepared in accordance with GAAP.

                  "Capital Lease" shall mean any lease of property which, in
accordance with GAAP, should be capitalized on the lessee's balance sheet.

                  "Capital Lease Obligation" shall mean the amount of the
liability which, according to GAAP, should be capitalized or disclosed with
respect to a Capital Lease.

                  "Capital Stock" shall mean (i) in the case of a corporation,
capital stock, (ii) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
company, membership interests and (v) any other equity interest or participation
that confers on a Person the right to receive a share of the profits and losses
of, or distributions of assets of, the issuing Person.

                  "Closing" shall mean the execution and delivery to the Bank of
all of the documents and instruments required by the terms of this Agreement and
the closing of the transactions contemplated by this Agreement.

                  "Closing Date" shall mean the date on which the Closing takes
place.

                  "Code" shall mean the Internal Revenue Code of 1986, as
amended.

                  "Compliance Certificate" shall mean a certificate completed by
an authorized officer of the Borrower and submitted to the Bank, substantially
in the form of Exhibit C of this Agreement.

                  "Default" shall mean the occurrence of any fact, condition or
event which with the giving of notice or lapse of time, or both, would be an
Event of Default.

                  "Default Rate" shall mean, with respect to any Loan, the rate
otherwise applicable to the Loan plus two percent (2%), provided such interest
rate shall not exceed the highest rate permitted by law.

                  "EBITDA" means, with respect to the Borrower, the earnings
before interest, income taxes, depreciation and amortization, in each case
determined in accordance with GAAP, of the Borrower and its Subsidiaries on a
consolidated basis.

                  "Encumbrance" shall mean, as to any Person, any mortgage,
lien, pledge, adverse claim, charge, security interest or other encumbrance in
or on, or any interest or title of any vendor, lessor, lender to, or other
secured party of such Person under any conditional sale or other title retention
agreement or Capital Lease with respect to, any property or asset of such
Person.

                                       2
<PAGE>

                  "Environmental Laws" shall mean the Federal Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. ss.ss. 9601,
et seq., the Federal Resource Conversation and Recovery Act, 42 U.S.C. ss.ss.
6901, et seq., the Hazardous Materials Transportation Act, 49 U.S.C. ss.ss. 1801
et seq., all other federal, state and local environmental or health laws
applicable to the Borrower or its business, operations or assets now or
hereafter enacted, and all rules, regulations, orders and publications adopted
or promulgated pursuant thereto from time to time.

                  "ERISA" shall mean the federal Employee Retirement Income
Security Act of 1974, as amended.

                  "Event of Default" shall have the meaning set forth in Article
VII of this Agreement.

                  "Excluded Taxes" means, with respect to the Bank hereunder or
under any other Loan Document, (a) income or franchise taxes imposed on (or
measured by) its net income by the United States of America or such other
jurisdiction under the laws of which the Bank is organized or in which its
principal office is located or in which its applicable lending office is
located, and (b) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which the Bank
is located.

                  "Existing Lender" means Bank of America, N.A.

                  "Federal Reserve Board" shall mean the Board of Governors of
the United States Federal Reserve System.

                  "Financial Statements" shall have the meaning set forth in
Section 3.4(a) of this Agreement.

                  "Fiscal Quarter" of the Borrower shall mean each period of
three months ending on March 31, June 30, September 30 and December 31.

                  "Fiscal Year" of the Borrower shall mean each period of twelve
months ending December 31.

                  "Fixed Charge Coverage" shall mean EBITDA less Capital
Expenditures divided by the sum of interest expense, required payments of
principal, cash taxes paid and dividends.

                  "GAAP" shall mean generally accepted accounting principles, as
in effect at the time of application to the provisions hereof, and consistently
applied.

                  "Guaranty" shall mean any agreement, promise or undertaking of
Borrower to answer for the debt of another Person.

                  "Hazardous Materials" shall mean all materials of any kind
which are flammable, explosive, toxic, radioactive or otherwise hazardous to
animal or plant life or the environment, including, without limitation,
"hazardous wastes," "hazardous substances" and "contaminants," as such terms are
defined by Environmental Laws.

                                       3
<PAGE>

                  "Indebtedness" shall mean any obligation for borrowed money,
including, without limitation: (a) any obligation owed for all or any part of
the purchase price of property or other assets or for the cost of property or
other assets constructed or of improvements thereto, other than accounts payable
and accrued liabilities included in current liabilities and incurred in respect
of property purchased in the ordinary course of business; and (b) any Capital
Lease Obligation.

                  "Interest Expense" as applied to the Borrower, shall mean for
any period, the amount of interest paid on Indebtedness by the Borrower for such
period, determined in accordance with GAAP.

                  "Interest Period" shall mean, in respect of each LIBOR-Based
Rate Loan, each period commencing on the last day of the immediately preceding
Interest Period and ending on the same day of the month that interest in respect
of such Loan is due the number of months thereafter corresponding to the number
of months specified in the definition of LIBOR-Based Rate; provided (i) the
first Interest Period shall commence on the date of such Loan and end on the
first day thereafter that interest in respect of such Loan is due, (ii) any
Interest Period that ends in a month for which there is no day which numerically
corresponds to the last day of the immediately preceding Interest Period shall
end on the last day of the month, and (iii) any Interest Period that would
otherwise extend past the maturity date of any Note shall end on the maturity
date of such Note.

                  "Judgment" shall have the meaning set forth in Section 6.6 of
this Agreement.

                  "LIBOR" shall mean with respect to each Interest Period, the
rate per annum for U.S. dollar deposits with a maturity equal to the relevant
Interest Period, as reported on the Telerate Page 3750 as of 11:00 a.m., London
time, on the second London Business Day before such Interest Period begins (or
if not so reported, then as determined by the Bank from another recognized
source or interbank quotation).

                  "Leverage Ratio" means on any date of determination, the ratio
of (a) Total Funded Debt of Borrower to (b) EBITDA.

                  "LIBOR-Based Rate" shall mean 1-month, 2-month, 3-month or 6
month LIBOR as selected by the Borrower plus Seventy Five basis points (.75%).

                  "LIBOR Market Index Rate" shall mean, for any day, the rate
for 1 month U.S. dollar deposits as reported on Telerate page 3750 as of 11:00
a.m., London time, on such day, or if such day is not a London Business Day,
then the immediately preceding London Business Day (or if not so reported, then
as determined by the Bank from another recognized source or interbank
quotation).

                  "LIBOR-Based Rate Loan" shall mean any Loan accruing interest
based on LIBOR.

                  "Loan Account" shall have the meaning set forth in Section 2.3
of this Agreement.

                                       4
<PAGE>

                  "Loan Documents" shall mean this Agreement, the Revolving
Credit Note, and all agreements, amendments, certificates, financing statements,
schedules, reports, notices, and exhibits now or hereafter executed or delivered
in connection with any of the foregoing, as may be in effect from time to time.

                  "Loans" shall mean the Revolving Credit Loans.

                  "Material Contracts" shall mean any contract or other
arrangement (other than any of the Loan Documents), whether written or oral, to
which the Borrower is a party as to which the breach, nonperformance,
cancellation or failure to renew by any party thereto could reasonably be
expected to have a material adverse effect on the Borrower.

                  "Note" shall mean the Revolving Credit Note and all
replacements, amendments, extensions and renewals thereof.

                  "Notice of Borrowing" shall mean an irrevocable notice
provided to the Bank on a Business Day in the form of Exhibit "A" of this
Agreement with respect to the Revolving Credit Loans and in accordance with the
time requirements set forth in Section 2.2(a) of this Agreement.

                  "Obligations" shall mean the obligations of the Borrower: (a)
to pay the principal, interest, commitment fees and any other liabilities of the
Borrower under this Agreement and the other Loan Documents in accordance with
the terms thereof; (b) to satisfy all of the other loans made by the Bank to the
Borrower, whether hereunder or otherwise, whether now existing or hereafter
incurred, whether or not evidenced by any note or other instrument, matured or
unmatured, direct, absolute or contingent, joint or several, including any
extensions, modifications, renewals thereof and substitutions therefor; (c) to
repay the Bank all amounts advanced by the Bank at its discretion hereunder or
otherwise on behalf of the Borrower, including, but without limitation, advances
for principal or interest payments to prior secured parties, mortgages or
lienors, or for taxes, levies, insurance, rent, wages, repairs to or maintenance
or storage of any Collateral; and (d) to reimburse the Bank, on demand, for all
of the Bank's reasonable expenses and costs, including the reasonable fees and
expenses of its outside counsel, in connection with the negotiation,
preparation, administration, amendment, modification, or enforcement of this
Agreement and the documents required hereunder, including all amounts payable
under Section 9.3 hereof.

                  "PBGC" shall mean the Pension Benefit Guaranty Corporation.

                  "Permitted Encumbrances" shall have the meaning set forth in
Section 6.3 of this Agreement.

                  "Person" shall mean any individual, corporation, partnership,
association, limited liability company, joint-stock company, trust,
unincorporated organization, joint venture, court or governmental or political
subdivision or agency thereof.

                  "Restricted Payments" shall mean (i) any cash dividend or
other distribution of cash or property, direct or indirect, on account of any
shares of any class of Capital Stock of the Borrower, now or hereafter
outstanding, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of Capital Stock of the Borrower now or hereafter outstanding by the

                                       5
<PAGE>

Borrower, and any redemption, retirement, sinking funds or similar payment
payable solely in such shares of that class of stock or in any class of stock
junior to that class, or (iii) any cash payment or other distribution of cash or
property made to redeem, purchase, repurchase or retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire any
shares of any class of Capital Stock of the Borrower now or hereafter
outstanding.

                  "Revolving Credit Commitment" shall have the meaning set forth
in Section 2.1 of this Agreement.

                  "Revolving Credit Facility" shall mean the revolving credit
facility established pursuant to Section 2.1 of this Agreement.

                  "Revolving Credit Loans" or "Revolving Credit Loan" shall mean
the loans made by the Bank to the Borrower pursuant to the Revolving Credit
Facility.

                  "Revolving Credit Note" shall have the meaning set forth in
Section 2.1 of this Agreement, together with all replacements, amendments and
renewals thereof.

                  "Revolving Credit Termination Date" shall mean July 31, 2009,
or such later date as extended in writing by the Bank.

                  "Subsidiary" shall mean, any corporation, partnership, trust,
limited liability company or other business entity of which the Borrower,
directly or indirectly, owns more than fifty percent (50%) of any class or
classes of capital stock, partnership interests, membership units or other
equity interests.

                  "Total Funded Debt" means the total amount of funded and
outstanding Indebtedness of the Borrower.

                  "Variable Rate" shall mean the LIBOR Market Index Rate plus
seventy five basis points (.75%), as that rate may change from day to day in
accordance with changes in the LIBOR Market Index Rate.

                  "Variable Rate Loans" shall mean any Revolving Credit Loan
accruing interest based on the Variable Rate.

                                   ARTICLE II

                              CREDIT ACCOMMODATIONS

                  2.1 The Revolving Credit Facility. The Bank shall make
available to the Borrower, a Revolving Credit Facility in the maximum principal
amount of Twenty Five Million Dollars ($25,000,000.00) (the "REVOLVING CREDIT
COMMITMENT"), upon the terms and conditions set forth herein.

                      (a) Generally. At any time and from time to time during
the period commencing on the Closing Date and ending on the Revolving Credit
Termination Date, upon the request of the Borrower, and provided the Borrower is
in compliance with the conditions precedent to making Revolving Credit Loans
contained in Section 4.2 of this Agreement, the Bank shall provide to the
Borrower a loan or loans, which shall be used by the Borrower for general
corporate purposes, including working capital. The Borrower may use the
Revolving Credit Facility during the period referred to in the preceding
sentence by borrowing, repaying and reborrowing in accordance with the terms of
this Agreement. The aggregate outstanding principal of the Revolving Credit
Loans at any time shall not exceed the Revolving Credit Commitment. If at any
time, the aggregate outstanding principal balance of all Revolving Credit Loans
exceeds the Revolving Credit Commitment, then, without any requirement or demand
or notice from the Bank, the Borrower shall immediately pay to the Bank the
amount of such excess. Upon the Revolving Credit Termination Date, unless the
same has been extended by written agreement between the Bank and the Borrower,
the Revolving Credit Commitment shall terminate, all Revolving Credit Loans
shall immediately mature and all Obligations under the Revolving Credit Facility
shall be immediately due and payable in full.

                                       6
<PAGE>

                      (b) Letters of Credit.

                          (i) Generally. In addition to making Loans to the
Borrower under the Revolving Credit Facility as provided in Section 2.1(a)
hereof, the Bank shall, upon the request of the Borrower and subject to the
terms of this Agreement, also issue one or more letters of credit ("LETTERS OF
CREDIT") for the account of the Borrower provided all such Letters of Credit
shall not in the aggregate exceed Ten Million Dollars ($10,000,000.00). All
amounts drawn under Letters of Credit shall be deemed to be loans made under the
Revolving Credit Facility and evidenced by the Revolving Credit Note, and the
amount available to be borrowed under the Revolving Credit Facility shall be
reduced by the aggregate amounts drawn and available to be drawn at any time
under all outstanding Letters of Credit. In no event shall the aggregate amount
available to be drawn on all outstanding Letters of Credit plus the outstanding
principal balance of Revolving Credit Loans exceed the Revolving Credit
Commitment. The duration of any Letters of Credit shall not extend beyond the
Revolving Credit Termination Date without the written consent of the Bank.

                          (ii) Issuance of Letters of Credit. Subject to the
provisions of Section 2.1(b)(1), the Bank shall issue Letters of Credit for the
account of the Borrower, or a Subsidiary provided that the Borrower (i) provides
a written request for each such Letter of Credit specifying the terms thereof,
including, without limitation, the amount and the name and address of the
beneficiary of such Letter of Credit; (ii) executes and delivers to the Bank an
application for each such Letter of Credit pursuant to the form provided for
such purpose by the Bank; and (iii) executes and delivers to the Bank such other
documents and instruments which the Bank, in its sole and absolute discretion,
deems reasonable and necessary. The Borrower shall pay to the Bank a per annum
fee in connection with the issuance of each Letter of Credit equal to seventy
five basis points (.75%) and all transactional and customary fees required by
the Bank in connection with the issuance of each Letter of Credit hereunder,
including, without limitation, the Bank's standard remittance, transfer and
issuance fees, which fees may be deducted by the Bank from the Borrower's
account as such fees are incurred.

                      (c) Revolving Credit Note. The obligation of the Borrower
to repay the aggregate outstanding principal of the Revolving Credit Loans made
by the Bank and to pay accrued interest thereon shall be evidenced by a
promissory note to the Bank, to be executed and delivered to the Bank
concurrently with the execution and delivery of this Agreement (the "REVOLVING
CREDIT NOTE").

                                       7
<PAGE>

                      (d) Facility Fee. The Borrower shall pay to the Bank a
quarterly unused line fee in the amount of twenty basis points (.20%) with the
first unused line fee payable in arrears on October 1, 2006 and thereafter, on
the first Business Day of each calendar quarter and shall be calculated by the
Bank on the average daily unused amount of the Revolving Loan Commitment for the
preceding calendar quarter as long as this Agreement remains in effect.

                  2.2 Interest. (a) Interest shall accrue on the unpaid
principal balance of each Revolving Credit Loan from the date of such Loan at a
rate per annum equal to (i) the Variable Rate; or (ii) the LIBOR-Based Rate for
Revolving Credit Loans, as selected by the Borrower in accordance herewith
(each, an "INTEREST RATE"). The Interest Rate for each Interest Period shall
accrue each day during such Interest Period commencing on and including the
first day to but excluding the last day. There shall be no more than one
Interest Rate for a Loan in effect at any time. When the Variable Rate is
selected for a Revolving Credit Loan, it shall be adjusted from time to time,
effective as of the date of each change in the Bank's LIBOR Market Index Rate,
as applicable, and shall continue to apply until another Interest Rate option is
selected for that Loan. When the LIBOR-Based Rate is selected for a Revolving
Credit Loan, such rate shall be fixed for each Interest Period for which it is
determined and shall apply for that Loan until another Interest Rate option is
selected for that Loan. The Borrower shall give the Bank irrevocable telephonic
notice (confirmed in writing by a Notice of Borrowing as set forth on Exhibit A)
of each proposed Revolving Credit Loan or rate conversion not later than 12:00
p.m. local time at the office of the Bank (i) on the same Business Day as each
proposed Loan at or rate conversion to the Variable Rate and (ii) at least two
(2) Business Days before each proposed Loan at or rate conversion to the
LIBOR-Based Rate. Each such notice shall specify (x) the date of such Loan or
rate conversion, which shall be a Business Day and, in the case of a conversion
from the LIBOR-Based Rate, shall be the last day of an Interest Period, (y) the
amount of each advance or the amount to be converted, and (z) the Interest Rate
selected by the Borrower. Notices received after 11:00 a.m. local time at the
office of the Bank shall be deemed received on the next Business Day. Each
LIBOR-Based Rate Loan shall be in minimum amounts of not less than One Million
Dollars ($1,000,000.00) with increments of One Hundred Thousand Dollars
($100,000.00) and each Variable Rate Loan shall be in minimum amount of One
Hundred Thousand Dollars ($100,000). Notwithstanding anything to the contrary
contained herein, the Borrower may not elect application of a rate of interest
to any Loan if such election would require the Bank to administer concurrently
more than three LIBOR-Based Rate Loans for the Revolving Credit Loans. All
determinations and quotations of rate by the Bank hereunder shall be conclusive
and binding upon the Borrower, in the absence of demonstrable error.

                      (b) Default Rate. Upon the occurrence and during the
continuance of any Event of Default, all Loans shall automatically terminate and
be automatically converted to Loans bearing interest at the Default Rate, and
shall be subject to the payment of all amounts then due with respect to such
termination under Section 2.2(e) of this Agreement.

                      (c) Payment of Interest. The Borrower shall pay interest
on the Variable Rate Loans in arrears on the last day of each consecutive
calendar month and, on LIBOR-Based Rate Loans, on the earlier of last day of
each Interest Period applicable thereto or quarterly (based on a calendar
quarter). All accrued but unpaid interest under the Note shall also be payable,
without demand, on the maturity thereof (whether by its stated terms, or upon
prepayment, acceleration or otherwise). Interest shall be computed from the
actual number of days elapsed and on the basis of a year of 360 days.

                                       8
<PAGE>

                      (d) Funding Losses. The Borrower shall indemnify the Bank
against the Bank's loss or expense as a consequence of (i) the Borrower's
failure to make any payment when due on a LIBOR-Based Rate Loan, (ii) any
payment, prepayment or conversion of any LIBOR-Based Rate Loan on a date other
than the date set forth in subsection (c) above, or (iii) any failure to make a
borrowing or conversion after giving notice thereof ("INDEMNIFIED LOSS OR
EXPENSE"). The amount of such Indemnified Loss or Expense shall be determined by
the Bank based upon the assumption that the Bank funded 100% of that portion of
the Loan respectively in the applicable London interbank or domestic certificate
of deposit market.

                      (e) Determinations. In making the determinations
contemplated by this Section, the Bank may make such estimates, assumptions,
allocations and the like that it, in good faith, determines to be appropriate.
All such determinations shall be final, binding and conclusive upon the
Borrower, except to the extent of any demonstrable error in computation or
transmission. The Bank shall furnish to the Borrower, upon request, a
certificate outlining in reasonable detail the computation of any amounts
claimed under this Section and the assumptions underlying such computations,
provided that the failure to deliver a certificate shall not affect the Bank's
right to such amounts.

                  2.3 Borrowing, Payments and Computations. The Bank shall
maintain on its books the account or accounts previously established by the
Borrower with the Bank (collectively, the "LOAN ACCOUNT") to which it shall
charge all Loans to or for the benefit of the Borrower pursuant to the terms of
this Agreement, including, without limitation, all advances to the Borrower
under the Loans and to which it shall credit, in accordance with the terms
hereof, each payment made by the Borrower. The records of the Bank with respect
to the Loan Account shall be presumed to correctly evidence the outstanding
principal balance of all Loans under this Agreement, except to the extent of any
error in such records. All Loans shall be credited by the Bank directly to the
Loan Account. All amounts payable by the Borrower to the Bank under this
Agreement or the Note with respect to principal, interest and fees shall be paid
to the Bank in immediately available funds at the address of the Bank set forth
in Section 9.2 hereof or at such other address of which the Bank shall give
notice to the Borrower pursuant to Section 9.2 hereof. The Bank shall have the
right to debit the Loan Account for the payment of principal, interest and fees
hereunder. All payments under the Note shall be applied first to the payment of
interest due and payable thereunder and then to the reduction of the outstanding
principal balance thereof.

                  2.4 Prepayments. Except for any charge that may be required by
Section 2.2(d) of this Agreement with respect to the prepayment of a LIBOR-Based
Rate Loan, the Borrower may prepay in whole or in part, any portion of any Loan
without premium or additional charge. All prepayments of any Loan shall be
accompanied by the payment of accrued interest on the amount of such prepayment
to the date thereof. The Borrower may make payments and prepayments of the Loans
in whole or in part at any time and from time to time upon notification to the
Bank not later than 12:30 p.m. Philadelphia, Pennsylvania time on the date of
the proposed payment or prepayment.

                                       9
<PAGE>

                  2.5 Requirements of Law. In the event that after the date
hereof, any change in any law, regulation or treaty or in the interpretation or
application thereof or compliance by the Bank with any request or directive
(whether or not having the force of law) from any central bank or other
governmental authority, agency or instrumentality:

                      (a) subjects or shall subject the Bank to any tax of any
kind whatsoever with respect to this Agreement, the Loans or the issuance or
maintenance of Letters of Credit hereunder, or changes the basis of taxation of
payments to the Bank of principal, interest or any other amount payable
hereunder (except for Excluded Taxes);

                      (b) imposes, modifies or holds or shall impose, modify or
hold applicable any reserve, special deposit, compulsory loan or similar
requirement against assets held by, or deposits or other liabilities in or for
the account of, advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of the Bank, which reserve, special deposit,
compulsory loan or similar requirement is not otherwise included in
determination of the interest rate hereunder;

                      (c) imposes or shall impose on the Bank any other
condition; and the result of any of the foregoing is to, directly or indirectly,
increase the cost to the Bank of making, renewing or maintaining advances or
extensions of credit or to reduce any amount receivable thereunder then, in any
such case, the Borrower shall promptly pay the Bank, upon its demand, any
additional amounts necessary to compensate the Bank for such additional cost or
reduced amount receivable. If the Bank becomes entitled to claim any additional
amounts pursuant to this subsection, it shall promptly notify the Borrower of
the event by reason of which it has become so entitled. The good faith
determination as to any additional amounts payable pursuant to the foregoing
sentence by the Bank shall be conclusive in the absence of manifest error.

                                  ARTICLE III

                 REPRESENTATIONS AND WARRANTIES OF THE BORROWER

                  In order to induce the Bank to execute and deliver this
Agreement and to make the Loans available to the Borrower, the Borrower
represents and warrants to the Bank that, as of the date hereof:

                  3.1 Good Standing of the Borrower; Authorization. The Borrower
is a corporation, duly organized and existing and in good standing in the State
of Massachusetts and is duly qualified and authorized to do business in all
jurisdictions wherein failure to do so would have a material adverse affect on
the Borrower or its operations. The Borrower has the corporate power to own its
properties and to carry on its business as now conducted. The execution,
delivery and performance of this Agreement, and the other Loan Documents have
been duly authorized by all necessary corporate proceedings on the part of the
Borrower. As of the date hereof, the Borrower has the Subsidiaries as set forth
on Schedule 6.1.

                                       10
<PAGE>

                  3.2 Compliance with Laws and Other Agreements. The Borrower is
in compliance with all laws, rules, regulations, judgments, decrees, orders,
agreements and requirements which affect in any material way the Borrower, its
assets or the operation of its business and has not received, and has no
knowledge of, any order or notice of any governmental investigation or of any
violation or claim of violation of any law, regulation, judgment, decree, order,
agreement, or other governmental requirement.

                  3.3 No Conflict; Governmental Approvals. The execution,
delivery, and performance of this Agreement and each of the Loan Documents will
not (i) conflict with, violate, constitute a default under, or result in a
breach of any provision of any applicable law, rule, regulation, judgment,
decree, order, instrument or other agreement, or (ii) conflict with or result in
a breach of any provision of its articles of incorporation or by-laws. No
authorization, permit, consent or approval of or other action by, and no filing,
registration or declaration with, any governmental authority or regulatory body
is required to be obtained or made by the Borrower for the due execution,
delivery and performance of this Agreement or any of the Loan Documents, except
such as have been duly obtained or made prior to the Closing Date and are in
full force and effect as of the Closing Date (copies of which have been
delivered to the Bank on or before the Closing Date).

                  3.4 Financial and Other Information Regarding Borrower.

                      (a) The Borrower has delivered to the Bank true, correct
and complete copies of (i) the financial statements of the Borrower as of March
31, 2006. Those financial statements (collectively, the "FINANCIAL STATEMENTS")
present fairly the financial position of the Borrower as of March 31, 2006 and
the results of the operations for the periods then ended in conformity with
GAAP.

                      (b) The Borrower has no Indebtedness other than the
Indebtedness set forth on Schedule 6.2 of this Agreement or the Indebtedness
permitted by Section 6.2.

                  3.5 Taxes. The Borrower is not delinquent in payment of any
income, property or other tax, except for any delinquency in the payment of a
tax which is contested in good faith by the Borrower and for which appropriate
reserves have been established in accordance with GAAP.

                  3.6 Encumbrances and Guaranties.

                      (a) All properties and assets of the Borrower are owned by
the Borrower free and clear of all Encumbrances except (i) those for taxes or
other government charges either not yet delinquent or the nonpayment of which is
permitted by Section 3.5 of this Agreement; (ii) those not arising in connection
with Indebtedness that do not materially impair the use or value of the
properties or assets of the Borrower in the conduct of its businesses; (iii)
Encumbrances whose release and termination is evidenced by appropriate documents
on the Closing Date; (iv) the Loan Documents and the Permitted Encumbrances; and
(v) Encumbrances disclosed on Schedule 6.3 of this Agreement.

                      (b) As of the date hereof, the Borrower is not obligated
under any Guaranty, except as disclosed on Schedule 3.6.

                                       11
<PAGE>

                  3.7 Material Adverse Changes. Since March 31, 2006, there has
not been any material adverse change in the business, operations, properties or
financial position of the Borrower. The Borrower does not know of any fact
(other than matters of a general economic or political nature) which materially
adversely affects, or, so far as the Borrower can now reasonably foresee, will
materially adversely affect, the business, operations, properties or financial
position of the Borrower or the performance by the Borrower of its obligations
under this Agreement and the other Loan Documents.

                  3.8 Margin Securities. None of the assets of the Borrower
include any "margin securities" within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System (12 C.F.R. 207, 221), and the
Borrower has no present intention of acquiring any margin security.

                  3.9 ERISA. The provisions of each employee benefit plan as
defined in Section 3(3) of ERISA ("Plan") maintained by the Borrower complies
with all applicable requirements of ERISA and of the Code, and with all
applicable rulings and regulations issued under the provisions of ERISA and the
Code setting forth those requirements. No reportable event, as defined in
Section 4043 of ERISA, has occurred with respect to any Plan; no Plan to which
Section 4021 of ERISA applies has been terminated; no Plan has incurred any
liability to PBGC as provided in Section 4062, 4063 and 4064 of ERISA; no Plan
has been involved in any prohibited transaction within the meaning of Section
406 of ERISA or Section 4975 of the Code; and there are no unfunded liabilities
with respect to any Plan which are not disclosed in the Financial Statements.

                  3.10 Pending Litigation. There are no actions, suits,
proceedings or investigations pending, or, to the knowledge of the Borrower
threatened against or affecting the Borrower before any court, arbitrator or
administrative or governmental body which, in the aggregate, might adversely
affect any action taken or to be taken by the Borrower under this Agreement and
the other Loan Documents or which, in the aggregate, might materially adversely
affect the business, operations, properties or financial position of the
Borrower, or the ability of the Borrower to perform its obligations under this
Agreement and the other Loan Documents.

                  3.11 Valid, Binding and Enforceable. This Agreement and the
Loan Documents have been duly and validly executed and delivered by the Borrower
and constitute the valid and legally binding obligations of the Borrower
enforceable in accordance with their respective terms, except as enforcement of
this Agreement and the other Loan Documents may be limited by bankruptcy,
insolvency or other laws of general application relating to or affecting the
enforcement of creditors' rights and except as enforcement is subject to general
equitable principles.

                  3.12 No Untrue Statements. Neither this Agreement, the Loan
Documents nor any other document, certificate or statement furnished or to be
furnished by the Borrower or by any other party to the Bank in connection
herewith contains, or at the time of delivery will contain, any untrue statement
of a material fact or omits or will omit to state a material fact necessary in
order to make the statements contained herein and therein not misleading.

                                       12
<PAGE>

                  3.13 Material Contracts. All of the Material Contracts are in
full force and effect, and, to the Borrower's knowledge, no material defaults
currently exist thereunder.

                  3.14 Business Interruptions. Within five (5) years prior to
the date hereof, neither the business, nor operations of the Borrower have been
materially and adversely affected in any way by any casualty, strike, lockout,
order of the United States of America, or any state or local government, or any
political subdivision or agency thereof, directed against the Borrower. To the
Borrower's knowledge, there are no pending or threatened labor disputes,
strikes, lockouts or similar occurrences or grievances against the business
being operated by the Borrower.

                                   ARTICLE IV

               CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE BANK

                  The obligations of the Bank hereunder are conditioned upon the
satisfaction by the Borrower of the following conditions precedent:

                  4.1 Documents to be Delivered by the Borrower at Closing. The
Borrower shall deliver or cause to be delivered to the Bank at the Closing the
following:

                      (a) This Agreement duly executed by the Borrower;

                      (b) The Revolving Credit Note duly executed by the
Borrower;

                      (c) A certificate of the Secretary or an Assistant
Secretary, of the Borrower dated the Closing Date including (i) resolutions duly
adopted by the Borrower authorizing the transactions under the Loan Documents;
(ii) evidence of the incumbency and signature of the officers, executing on its
behalf any of the Loan Documents and any other document to be delivered pursuant
to any such documents, together with evidence of the incumbency of such
Secretary or Assistant Secretary; (iii) a copy of the Borrower's Articles of
Incorporation and By-laws, together with the certification of the Secretary or
Assistant Secretary of the Borrower as of the Closing Date that such Articles of
Incorporation and By-laws represent such documents, as amended to the Closing
Date; and (iv) certificates of authority or good standing for the Borrower from
Massachusetts and Illinois;

                      (d) A copy of each and every authorization, permit,
consent, and approval of and other action by, and notice to and filing with,
every governmental authority and regulatory body which is required to be
obtained or made by the Borrower for the due execution, delivery and performance
of this Agreement and the other Loan Documents; and

                      (e) The opinion of Baker & McKenzie LLP, counsel to the
Borrower, dated as of Closing Date, in form and substance reasonably
satisfactory to the Bank and its counsel.

                      (f) Evidence of satisfaction of all Indebtedness due to
the Existing Lender.

                                       13
<PAGE>

                  4.2 Conditions Precedent to Making Revolving Credit Loans. The
Bank shall not be obligated to make any Revolving Credit Loans hereunder unless:

                      (a) As of the date of the proposed advance, no Event of
Default or Default has occurred and is continuing;

                      (b) The representations and warranties contained in
Article III (other than Section 3.7) are true and correct on the date of the
proposed advance, except that the representations and warranties in Section 3.4
shall refer to the financial statements most recently supplied to the Bank
pursuant to Article V of this Agreement and the representation and warranty in
Section 3.14 shall be true and correct only as of the date hereof;

                      (c) No material adverse change has occurred in the
financial condition of the Borrower since the date of the most recent financial
statement delivered to the Bank; and

                      (d) If requested, the Borrower has delivered to the Bank a
certificate executed by an authorized officer of the Borrower confirming the
statements made in paragraphs (a), (b) and (c) above.

                                    ARTICLE V

                      AFFIRMATIVE COVENANTS OF THE BORROWER

                  The Borrower hereby covenants and agrees that from the date
hereof and until satisfaction in full of the Obligations, unless the Bank shall
otherwise consent in writing, it shall do the following:

                  5.1 Use of Proceeds. Use the proceeds of the borrowings
hereunder only for the purposes specified in Section 2.1 of this Agreement.

                  5.2 Financial Statements and Other Reports. Furnish to the
Bank:

                      (a) within ninety (90) days after the end of each Fiscal
Year, the financial statements of the Borrower on a consolidated basis including
a balance sheet, statement of income and statement of cash flows, all of which
shall present fairly the financial condition of the Borrower and its
consolidated Subsidiaries on a consolidated basis as of the close of such year
and the results of their operations during such year, in accordance with GAAP,
and shall be audited and accompanied by the unqualified opinion of nationally
recognized independent public accountants and a certificate signed by such
accountant to the effect that such accountant does not know of any Default or
Event of Default, or, if such accountant shall have obtained knowledge of any
such Event of Default or other event, specifying the nature thereof;

                      (b) within sixty (60) days after the end of each Fiscal
Quarter, the quarterly management prepared financial statements of the Borrower
on a consolidated basis, including a balance sheet, statement of income and a
statement of cash flows, which shall present fairly the financial condition of
the Borrower and its consolidated Subsidiaries on a consolidated basis as of the
close of such Fiscal Quarter and the results of their operations, during such
quarter, in accordance with GAAP (without notes and subject to normal year-end
adjustments), certified by the chief financial officer of the Borrower;

                                       14
<PAGE>

                      (c) concurrently with the delivery of the financial
statements required by subsections 5.2(a) and 5.2(b) above, a certificate of the
chief financial officer or chief executive officer of the Borrower certifying
that the Borrower is in compliance with all the terms and conditions of this
Agreement in the form of Exhibit B; and

                      (d) such other financial information as the Bank shall
reasonably request.

                  5.3 Ordinary Course of Business; Records. Conduct its business
only in the ordinary course and keep accurate and complete books and records of
its assets, liabilities and operations consistent with sound business practices
and in accordance with GAAP.

                  5.4 Information for the Bank. Make available during normal
business hours for inspection by the Bank or its designated representatives,
upon reasonable prior notice, any of its books and records when reasonably
requested by the Bank to do so, and furnish the Bank any information reasonably
requested regarding its operations, business affairs and financial condition
within a reasonable time after the Bank gives notice of its request therefor. In
particular, and without limiting the foregoing, the Borrower shall permit,
during normal business hours, and upon reasonable prior notice, representatives
of the Bank's Audit Department to make such periodic inspections of books,
records and assets of the Borrower as such representatives deem necessary and
proper. Prior notice hereunder need not be given by the Bank to the Borrower if
a Default or Event of Default shall exist under this Agreement. The foregoing
inspections shall be at the Borrower's principal place of business at 512
Kingsland Drive in Batavia, Illinois and shall be made in such a way as to
interfere as little as possible with the conduct of Borrower's or its
Subsidiaries' business. Unless an Event of Default shall exist, in no event
shall the Borrower be required to pay the expenses of more than one visit per
calendar year.

                  5.5 Insurance. Carry at all times with financially sound and
reputable insurers commercially reasonable insurance against such hazards as are
usually insured against by business entities of established reputation engaged
in like businesses and similarly situated, and pay all premiums on the policies
for all such insurance when and as they become due and take all other actions
necessary to maintain such policies in full force and effect at all times. The
Borrower shall from time to time, upon request by the Bank, promptly furnish or
cause to be furnished to the Bank evidence, in form and substance satisfactory
to the Bank, of the maintenance of all insurance required to be maintained
hereby, including, without limitation, such originals or copies as the Bank may
request of policies, certificates of insurance, riders and endorsements relating
to such insurance and proof of premium payments.

                  5.6 Maintenance. Maintain its equipment, real property and
other properties in good condition and repair (normal wear and tear excepted)
and pay and discharge the cost of repairs thereto or maintenance thereof.

                  5.7 Taxes. Pay all taxes, assessments, charges and levies
imposed upon it or on any of its property, or which it is required to withhold
and pay over, and provide to the Bank evidence of payment thereof if the Bank so
requests, except where contested in good faith by lawful and appropriate
proceedings and where adequate reserves therefor have been set aside on its
books; provided, however, that the Borrower shall pay all such taxes,
assessments, charges and levies forthwith whenever foreclosure on any lien
appears imminent.

                                       15
<PAGE>

                  5.8 Leases. Pay all rent or other sums required by every lease
to which the Borrower is a party as the same becomes due and payable, perform
all its obligations as tenant or lessee thereunder except where contested in
good faith by lawful and appropriate proceedings and where adequate reserves
therefor have been set aside.

                  5.9 Existence; Certain Rights; Laws. Do all things necessary
to preserve and keep in full force and effect in each jurisdiction in which it
conducts business its business existence, licenses, permits, rights, patents,
trademarks, copyrights, trade names and franchises and comply with all present
and future laws, ordinances, rules, regulations, judgments, orders and decrees,
in each case which affect in any material way the Borrower, its assets or the
operation of its business, and except for any sale, transfer, lease or
disposition of assets permitted by Section 6.1(c).

                  5.10 Notice of Litigation or Other Proceedings. Give prompt
notice to the Bank of (i) the existence of any dispute, (ii) the institution of
any litigation, administrative proceeding or governmental investigation
involving the Borrower or (iii) the entry of any judgment, decree or order
against or involving the Borrower if any of the matters described in the
foregoing sections (i), (ii) or (iii) would materially and adversely affect the
operation, financial condition, property or business of the Borrower or affect
the enforceability of this Agreement or any of the other Loan Documents.

                  5.11 Indebtedness. [Intentionally omitted].

                  5.12 Notice of Events of Default. Give prompt (but, in any
event, within two (2) Business Days after the date thereof) notice to the Bank
if the Borrower becomes aware of the occurrence of any Default or Event of
Default, or of the failure of the Borrower to observe or perform any of the
conditions or covenants to be observed or performed by it under this Agreement
or any of the other Loan Documents.

                  5.13 ERISA. Maintain each Plan in compliance with all
applicable requirements of ERISA and of the Code and with all applicable rulings
and regulations issued under the provisions of ERISA and of the Code. As
promptly as practicable (but in any event not later than ten days) after the
Borrower receives from the PBGC a notice of intent to terminate any Plan or to
appoint a trustee to administer any Plan, after the Borrower has notified the
PBGC that any reportable event, as defined in Section 4043 of ERISA, with
respect to any Plan has occurred, or after the Borrower has provided a notice of
intent to terminate to each affected party, as defined for purposes of Section
4041(a)(2) of ERISA, with respect to any Plan, a certificate of the chief
executive officer of the Borrower shall be furnished to the Bank setting forth
the details with respect to the events resulting in such reportable event, as
the case may be, and the action which the Borrower proposes to take with respect
thereto, together with a copy of the notice of intent to terminate or to appoint
a trustee from the PBGC, of the notice of such reportable event or of the
Borrower's notice of intent to terminate, as the case may be.

                                       16
<PAGE>

                  5.14 Deposit Accounts. Maintain with the Bank its primary
depository and cash management accounts unless otherwise agreed in writing by
the Bank.

                  5.15 Financial Covenants. Observe the following financial
covenants:

                      (a) Capital Expenditure. The Borrower shall not cause,
suffer or permit the Borrower's aggregate annual Capital Expenditures to exceed
Seven Million Five Hundred Thousand Dollars ($7,500,000.00) for any Fiscal Year
during the term of this Agreement. Such permitted Capital Expenditures are on a
non-cumulative basis as to unused portions for any Fiscal Year.

                      (b) Total Funded Debt to EBITDA. The Borrower shall not
permit the Leverage Ratio to exceed 2.50 to 1.00 measured as of the last day of
each Fiscal Quarter combined with the immediately preceding three Fiscal
Quarters commencing with the Fiscal Quarter ending September 30, 2006.

                      (c) Minimum Fixed Coverage Charge. The Borrower shall not
permit the Fixed Charge Coverage to be less than 1.25 to 1.00 measured as of the
last day of each Fiscal Quarter combined with the immediately preceding three
Fiscal Quarters commencing September 30, 2006.

                  5.16 Compliance with Environmental Laws. Comply in all
material respects with all Environmental Laws and not use any property which it
owns or occupies to generate, treat, store, transport, transfer, dispose of,
release or otherwise handle any Hazardous Material, except in material
compliance with all Environmental Laws.

                  5.17 Management. Up until the time the Domestication (as
defined in Section 6.1 hereof) is complete, furnish to the Bank within five (5)
days of any election or appointment of officers or directors, written notice of
any change in the persons who from time to time become officers and directors of
the Borrower.

                  5.18 Further Actions. Cooperate and join with the Bank at its
own expense, in taking all such further actions as the Bank, in its sole
judgment, shall deem necessary to effectuate the provisions of the Loan
Documents.

                                   ARTICLE VI

                               NEGATIVE COVENANTS

                  The Borrower hereby covenants and agrees that from the Closing
Date until satisfaction in full of the Obligations, it shall not do any one or
more of the following without first obtaining the written consent of the Bank:

                  6.1 Fundamental Changes.

                      (a) Change its name without notice to the Bank, enter into
or effect any merger, consolidation, share exchange, division, conversion,
reclassification, recapitalization, reorganization or other transaction of like
effect, or dissolve, except (i) Borrower may merge with or into Fuel Tech, Inc.,
a Delaware corporation which at the time of the merger owns all of Borrower's
issued and outstanding Capital Stock, and which merger shall occur on or before
March 31, 2007 pursuant to a reorganization as outlined in that certain Form S-4
Registration Statement filed with the Securities and Exchange Commission on June
5, 2006 (the "Domestication"); or (ii) any other consolidation, merger or
similar transaction so long as (A) the Borrower is the surviving entity in such
consolidation, merger or similar transaction and (B) the aggregate amount of
consideration for all such consolidations, mergers or similar transactions
provided in clause (A) is not greater than Ten Million Dollars ($10,000,000) in
the aggregate.

                                       17
<PAGE>

                      (b) Acquire any of the assets or Capital Stock or assets
of any Person for amount in excess of Ten Million Dollars ($10,000,000.00)
whether payment is made in cash or Capital Stock or in kind;

                      (c) Sell, transfer, lease or otherwise dispose of its
assets or any significant product line or process, except for (i) sales of
inventory or used, worn out or surplus equipment or other assets, in the
ordinary course of business or as permitted in the Loan Documents; (ii) sales of
equipment if the equipment is replaced with equipment of similar value and
quality; (iii) the sale, lease or abandonment of intellectual property if
Borrower no longer deems it necessary to its business; or (iv) sales at arm's
length and for fair market value in the ordinary course of business for One
Million Dollars ($1,000,000) or less.

                      (d) Unless notice shall have been provided to the Bank not
more than thirty 30 days after the formation thereof, have any Subsidiary or
joint venture, other than as set forth on Schedule 6.1 of this Agreement.

                  6.2 Indebtedness. Incur, create, assume or have any
Indebtedness except:

                      (a) The Loans;

                      (b) Other Indebtedness to the Bank;

                      (c) Not more than Five Million Dollars ($5,000,000.00) of
Indebtedness constituting either Capital Lease Obligations or Indebtedness under
agreements for the installment purchase of equipment, provided that such
Indebtedness does not exceed 100% of the installment purchase price of such
equipment;

                      (d) The Indebtedness set forth on Schedule 6.2 of this
Agreement; and

                      (e) Additional Indebtedness not to exceed One Million
Dollars ($1,000,000) in the aggregate outstanding at any time.

                  6.3 Encumbrances.

                      (a) Execute or otherwise enter into an agreement with any
Person which prohibits or otherwise restricts the Borrower's ability to create
or allow any Encumbrances to be on or otherwise effect any of its properties
other than pursuant to this Agreement;

                                       18
<PAGE>

                      (b) Create or allow any Encumbrances to be on or otherwise
affect any of its property or assets except the following (collectively,
"Permitted Encumbrances"):

                          (i) Encumbrances in favor of the Bank;

                          (ii) Encumbrances for taxes, assessments and other
governmental charges incurred in the ordinary course of business which are not
yet due and payable or which are being diligently contested in good faith and by
appropriate proceedings and with respect to which adequate reserves are being
maintained;

                          (iii) Pledges or deposits made in the ordinary course
of business to secure payment of worker's compensation or to participate in any
fund in connection with worker's compensation, unemployment insurance or other
social security obligations;

                          (iv) Good faith pledges or deposits made in the
ordinary course of business to secure performance of tenders, contracts (other
than for the repayment of Indebtedness) or leases or to secure statutory
obligations or surety, appeal, indemnity, performance or other similar bonds
required in the ordinary course of business;

                          (v) Liens of mechanics, materialmen, warehousemen,
carriers or other similar liens, securing obligations incurred in the ordinary
course of business that are not yet due and payable;

                          (vi) Encumbrances securing Indebtedness permitted
under Section 6.2(c), provided that (A) no other covenants of this Agreement are
thereby violated and (B) in the case of Encumbrances over equipment, no
equipment other than the equipment so acquired secures such Indebtedness;

                          (vii) Encumbrances, if any, otherwise expressly
permitted by this Agreement;

                          (viii) Encumbrances set forth on Schedule 6.3 of this
Agreement; and

                          (ix) Judgment liens of less than Five Hundred Thousand
Dollars ($500,000) or judgment liens that have been unstayed for less than
thirty (30) days.

                  6.4 Guaranties. Directly or indirectly make any Guaranty,
except (i) Guaranties in favor of the Bank, (ii) intercompany Guaranties related
to trade payables incurred in the ordinary course of business, or (iii) other
Guaranties of not more than One Million Dollars ($1,000,000) in the aggregate
outstanding at any time.

                  6.5 Sales and Lease-Backs. Sell, transfer or otherwise dispose
of any property, real or personal, now owned or hereafter acquired, with the
intention of directly or indirectly taking back a lease on such property, other
than sale-leaseback transactions with Affiliates of not more than One Million
Dollars ($1,000,000) in the aggregate outstanding at any time, if at arm's
length and for fair market value.

                  6.6 Loans and Investments. (i) Purchase or invest in any
investments other than as set forth in the Fuel Tech N.V. Cash Investment Policy
attached hereto as Exhibit C; or (ii) make loans or advances to officers,
employees or stockholders exceeding One Million Dollars ($1,000,000) in the
aggregate outstanding at any time.

                                       19
<PAGE>

                  6.7 Change in Business. Discontinue any substantial part, or
change the nature of, its business, or enter into any new business unrelated to
the present business conducted by it if the same would have a material adverse
effect on the Borrower's ability to perform its obligations under the Loan
Documents.

                  6.8 Intentionally Omitted.

                  6.9 ERISA.

                      (a) Terminate any Plan to which Section 4021 of ERISA
applies;

                      (b) Allow the value of the benefits guaranteed under Title
IV of ERISA to exceed the value of assets allocable to such benefits;

                      (c) Incur a withdrawal liability within the meaning of
Section 4201 of ERISA.

                  6.10 Restricted Payments. Directly or indirectly declare or
make any Restricted Payment or, directly or indirectly, agree, become or remain
liable (contingently or otherwise) to do any of the foregoing, except for (i)
any cash dividend or other distribution of cash or property, direct or indirect,
on account of any shares of any class of Capital Stock of the Borrower, now or
hereafter outstanding, or (ii) any cash payment or other distribution of cash or
property made to redeem, purchase, repurchase or retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire any
shares of any class of Capital Stock of the Borrower now or hereafter
outstanding in an amount not to exceed Five Million Dollars ($5,000,000) in any
Fiscal Year.

                  6.11 Compliance with Federal Reserve Board Regulations. (i)
Use any of the proceeds of the Loans, directly or indirectly, for the purposes
of purchasing or carrying any "margin security" within the meaning of
Regulations U of the Board of Governors of the Federal Reserve System (12 C.F.R.
207, 221), (ii) use any of the proceeds of the Loans, directly or indirectly,
for the purpose of purchasing, carrying or trading in any securities under such
circumstances as to involve the Borrower in a violation of Regulation X of such
Board (12 C.F.R. 224), or (iii) take or permit to be taken any other action
which would result in the Loans or the consummation of any of the other
transactions contemplated hereby being violative of such regulations or any
other regulation of such Board.

                  6.12 Amendment of Documents. Change or amend the Articles of
Incorporation or By-Laws, other organizational documents, if any such change or
amendment would affect the Borrower's ability to perform its obligations under
the Loan Documents or the rights and remedies of the Bank, in each case as
determined by the Bank in its sole discretion.

                  6.13 Prepayment of Indebtedness. Make any voluntary
prepayments of Indebtedness other than the Loans if a Default or Event of
Default has occurred and is continuing or if such prepayment will cause the
occurrence of a Default or Event of Default.

                                       20
<PAGE>

                  6.14 Intercompany Restriction. Make any loan or advance to any
Subsidiary, except for (i) normal course of business transactions, or (ii) loans
or advances of less than One Million Dollars ($1,000,000) in the aggregate
outstanding at any time.

                  6.15 Restrictions on Stock Transfer. Directly or indirectly
transfer, sell or otherwise dispose of, or part with control of, or permit the
transfer of any shares of its Capital Stock if the same (i) would have a
material adverse effect on the Borrower's ability to perform its obligations
under the Loan Documents, or (ii) would constitute or result in a material
adverse change in the business, operations, properties or financial position of
the Borrower; provided, however that Fuel Tech N.V. may transfer the Capital
Stock of Borrower owned by it to Fuel Tech, Inc., a Delaware corporation
pursuant to a reorganization as outlined in that certain Form S-4 Registration
Statement filed with the Securities and Exchange Commission on June 5, 2006.

                  6.16 Transactions with Affiliates. Enter into or conduct any
material transaction with any Affiliate except on terms that would be usual and
customary in a similar transaction between Persons not affiliated with each
other and except as disclosed to Bank. Borrower will not make any loans or
extensions of credit to any of its Affiliates, shareholders, directors or
officers, except for (i) the existing loans described in Schedule 6.16 attached
hereto, or (ii) loans of not more than One Million Dollars ($1,000,000) in the
aggregate outstanding at any time. The Borrower will cause all of its
Indebtedness at any time owed to its Affiliates, shareholders, directors and
officers to be subordinated in all respects to all present and future
Indebtedness to the Bank and will not make any payments thereon, except as
approved by the Bank in writing.

                                  ARTICLE VII

                                EVENTS OF DEFAULT

                  An event of default ("Event of Default") under this Agreement
shall be deemed to exist if any one or more of the following events occurs and
is continuing, whatever the reason therefor:

                  7.1 Failure to Pay. The Borrower fails to pay any amount of
principal as and when due under this Agreement or any of the Loan Documents, or
any amount of interest, fees or other sums within three days after the same
becomes due under this Agreement or any of the Loan Documents, or any other
Obligations, whether upon stated maturity, acceleration, or otherwise.

                  7.2 Breach of Covenants or Conditions. The Borrower (a) fails
to perform or observe any term, covenant, agreement or condition in this
Agreement set forth in Sections 5.1, 5.10, 5.12, 5.15, 5.16, 5.17 or 5.18 or in
Article VI hereof or any similar provision of any Loan Documents, or (iii) fail
to perform or observe any other term, covenant agreement or condition in this
Agreement or any of the other Loan Documents or is in violation of or
non-compliance with any provision of this Agreement or any of the other Loan
Documents, and has not remedied and fully cured such non-performance,
non-observance, violation of or non-compliance within twenty (20) Business Days
after the earlier of (a) the date that an officer, director, or shareholder of
the Borrower has knowledge of such violation, or (b) the date that the Borrower
has written notice from the Bank; provided that such cure period shall not apply
to violations referred to in clause (a) above, and provided further, that during
such twenty (20) Business Day period under this clause (b) the Bank's
obligations to make further Loans to the Borrower shall be suspended.

                                       21
<PAGE>

                  7.3 Defaults in Other Agreements. The Borrower fails to
perform or observe any term, covenant, agreement or condition contained in, or
there shall occur any default under or as defined in, any other agreement
applicable to the Borrower with the Bank, or by which the Borrower is bound
involving a liability of the Borrower in excess of One Million Dollars
($1,000,000) which shall not be remedied within the period of time (if any)
within which such other agreement permits such default to be remedied, unless
such default is waived by the other party thereto or excused as a matter of law.

                  7.4 Agreements Invalid. The validity, binding nature of, or
enforceability of any material term or provision of any of the Loan Documents is
disputed by, on behalf of, or in the right or name of the Borrower or any
material term or provision of any such Loan Document is found or declared to be
invalid, avoidable, or non-enforceable by any court of competent jurisdiction.

                  7.5 False Warranties; Breach of Representations. Any warranty
or representation made by the Borrower in this Agreement or in any other Loan
Document or in any certificate or other writing delivered under or pursuant to
this Agreement or any other Loan Document, or in connection with any provision
of this Agreement, or related to the transactions contemplated hereby shall
prove to have been false or incorrect or breached in any material respect on the
date as of which made.

                  7.6 Judgments. A final judgment or judgments is entered, or an
order or orders of any judicial authority or governmental entity is issued
against the Borrower (such judgment(s) and order(s) hereinafter collectively
referred to as "Judgments" and each a "Judgment") (a) for payment of money,
which Judgment or Judgments, in the aggregate, is in excess of Five Hundred
Thousand Dollars ($500,000); or (b) for injunctive or declaratory relief which
would have a material adverse effect on the ability of the Borrower to conduct
its business, and such Judgment is not discharged or execution thereon or
enforcement thereof stayed pending appeal, within thirty days after entry or
issuance thereof, or, in the event of such a stay, such Judgment is not
discharged within thirty days after such stay expires.

                  7.7 Bankruptcy or Insolvency of the Borrower.

                      (a) The Borrower becomes insolvent, or generally fails to
pay, or is generally unable to pay, or admits in writing its inability to pay,
its debts as they become due, or applies for, consents to, or acquiesces in, the
appointment of a trustee, receiver or other custodian for the Borrower or a
substantial part of its property, or makes a general assignment for the benefit
of creditors;

                      (b) The Borrower commences any bankruptcy, reorganization,
debt arrangement, or other case or proceeding under any state or federal
bankruptcy or insolvency law, or any dissolution or liquidation proceeding;

                      (c) Any bankruptcy, reorganization, debt arrangement, or
other case or proceeding under any state or federal bankruptcy or insolvency
law, or any dissolution or liquidation proceeding, is involuntarily commenced
against or in respect of the Borrower and such case or proceeding shall remain
unstayed or undismissed for sixty (60) days; and

                                       22
<PAGE>

                      (d) A trustee, receiver, or other custodian is appointed
for the Borrower or a substantial part of such Person's property.

                  7.8 Other Agreements. There shall occur any default under or
as defined in, any subordination agreement in favor of the Bank.

                  7.9 Material Adverse Change. There shall occur a material
adverse change in the business, operations, properties or financial position of
the Borrower, in the sole judgment of the Bank.

                                  ARTICLE VIII

                                    REMEDIES

                  8.1 Further Advances; Acceleration; Setoff.

                      (a) Upon the occurrence of and during the continuance of
any one or more Events of Default, the Bank may, in its sole discretion, refuse
to make any further advances or Loans to the Borrower;

                      (b) Automatically upon the occurrence of any Event of
Default described in Section 7.7 of this Agreement, and in the sole discretion
of the Bank upon the occurrence of and during the continuance of any other Event
of Default, the unpaid principal balance of all Loans, all interest and fees
accrued and unpaid thereon, and all other amounts and Obligations payable by the
Borrower under this Agreement and the other Loan Documents shall immediately
become due and payable in full, all without protest, presentment, demand, or
further notice of any kind to the Borrower, all of which are expressly waived by
the Borrower and the Loans shall thereafter accrue interest at the Default Rate;

                      (c) If any of the Obligations shall be due and payable or
any one or more Events of Default shall have occurred and be continuing, the
Bank shall have the right, in addition to all other rights and remedies
available to it, without prior notice to the Borrower, to apply toward and
set-off against and apply to the then unpaid balance of the Note and the other
Obligations any items or funds held by the Bank, any and all deposits (whether
general or special, time or demand, matured or unmatured, fixed or contingent,
liquidated or unliquidated) now or hereafter maintained by the Borrower for its
own account with the Bank, and any other indebtedness at any time held or owing
by the Bank to or for the credit or the account of the Borrower. If any of the
Obligations shall be due and payable or any one or more Events of Default shall
have occurred and be continuing, the Bank is hereby authorized to charge any
such account or indebtedness for any amounts due to the Bank. Such right of
set-off shall exist whether or not the Bank shall have made any demand under
this Agreement, the Notes or any other Loan Document and whether or not the
Notes and the other Obligations are matured or unmatured. The Borrower hereby
confirms the Bank's right of set-off, and nothing in this Agreement shall be
deemed any waiver or prohibition of such right of set-off.

                                       23
<PAGE>

                  8.2 Further Remedies.

                      (a) Upon the occurrence of and during the continuance of
any one or more Events of Default, the Bank may proceed to protect and enforce
its rights under this Agreement and the other Loan Documents by exercising such
remedies as are available to the Bank in respect thereof under applicable law,
either by suit in equity or by action at law, or both, whether for specific
performance of any provision contained in this Agreement or any of the other
Loan Documents or in aid of the exercise of any power granted in this Agreement
or any of the other Loan Documents.

                                   ARTICLE IX

                                  MISCELLANEOUS

                  9.1 Remedies Cumulative; No Waiver. The rights, powers and
remedies of the Bank provided in this Agreement and the other Loan Documents are
cumulative and not exclusive of any right, power or remedy provided by law or
equity, and no failure or delay on the part of the Bank in the exercise of any
right, power, or remedy shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, power, or remedy preclude other or further
exercise thereof, or the exercise of any other right, power or remedy.

                  9.2 Notices. Every notice and communication under this
Agreement or any of the other Loan Documents shall be in writing and shall be
given by either (i) hand-delivery, (ii) first class mail (postage prepaid),
(iii) reliable overnight commercial courier (charges prepaid), or (iv) telecopy
or other means of electronic transmission, if confirmed promptly by any of the
methods specified in clauses (i), (ii) and (iii) of this sentence, to the
following addresses:

                           If to the Borrower:

                           Fuel Tech, Inc.
                           512 Kingsland Drive
                           Batavia, Illinois  60510
                           Attn:  Chief Financial Officer

                           With a copy to:

                           Fuel Tech, Inc.
                           Legal Department
                           512 Kingsland Drive
                           Batavia, Illinois  60510

                           If to the Bank:

                           Wachovia Bank, National Association
                           2240 Butler Pike
                           Plymouth Meeting, Pennsylvania 19462
                           Attn:  Patrick Kaufmann, Vice President
                           Fax:  (610) 397-2558

                                       24
<PAGE>

                           With a copy to:

                           Duane Morris, LLP
                           227 West Monroe Street
                           Chicago, Illinois  60606
                           Attn:  Kenneth A. Latimer, Esquire
                           Fax:   312-499-6701

                  Notice given by telecopy or other means of electronic
transmission shall be deemed to have been given and received when sent. Notice
by overnight courier shall be deemed to have been given and received on the date
scheduled for delivery. Notice by mail shall be deemed to have been given and
received three (3) calendar days after the date first deposited in the United
States Mail. Notice by hand delivery shall be deemed to have been given and
received upon delivery. A party may change its address by giving written notice
to the other party as specified herein.

                  9.3 Costs, Expenses and Attorneys' Fees. Whether or not the
transactions contemplated by this Agreement and the other Loan Documents are
fully consummated, the Borrower shall promptly pay (or reimburse, as the Bank
may elect) all reasonable costs and expenses which the Bank has incurred or may
hereafter incur in connection with the negotiation, preparation, reproduction,
interpretation and enforcement of this Agreement and the other Loan Documents,
the collection of all amounts due hereunder and thereunder, and any amendment,
modification, consent or waiver which may be hereafter requested by the Borrower
or otherwise required. Such costs and expenses shall include, without
limitation, the reasonable fees and disbursements of counsel to the Bank, the
costs of appraisal fees, searches of public records, costs of filing and
recording documents with public offices, and similar costs and expenses incurred
by the Bank. Upon the occurrence of an Event of Default, such costs shall also
include the reasonable fees of any accountants, consultants or other
professionals retained by the Bank. The reimbursement obligations of the
Borrower under this Section shall survive any termination of this Agreement.

                  9.4 Survival of Covenants. This Agreement and all covenants,
agreements, representations and warranties made herein and in any certificates
delivered pursuant hereto shall survive the making of the Loans and the
execution and delivery of the Note and, subject to the provisions of Section
9.15 hereof, shall continue in full force and effect until all of the
Obligations have been fully paid, performed, satisfied and discharged.

                  9.5 Counterparts; Effectiveness. This Agreement may be
executed in any number of counterparts and by the different parties on separate
counterparts. Each such counterpart shall be deemed to be an original, but all
such counterparts shall together constitute one and the same Agreement. This
Agreement shall be deemed to have been executed and delivered when the Bank has
received counterparts hereof executed by all parties listed on the signature
page(s) hereto.

                  9.6 Headings. The headings of sections have been included
herein for convenience only and shall not be considered in interpreting this
Agreement.

                                       25
<PAGE>

                  9.7 Payment Due On A Day Other Than A Business Day. If any
payment due or action to be taken under this Agreement or any Loan Document
falls due or is required to be taken on a day which is not a Business Day, such
payment or action shall be made or taken on the next succeeding Business Day and
such extended time shall be included in the computation of interest.

                  9.8 JUDICIAL PROCEEDINGS. BORROWER AGREES THAT ALL ACTIONS OR
PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT MAY BE TRIED AND LITIGATED
ONLY IN STATE OR FEDERAL COURTS LOCATED IN THE COUNTY OF COOK, STATE OF ILLINOIS
OR, AT THE SOLE OPTION OF BANK IN ANY OTHER COURT IN WHICH BANK SHALL INITIATE
LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER JURISDICTION OVER
THE MATTER IN THE CONTROVERSY. EACH OF BORROWER AND BANK WAIVES TO THE FIRST
EXTENT PERMITTED UNDER APPLICABLE LAW ANY RIGHT EACH MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS AGREEMENT. BORROWER ACKNOWLEDGES
AND AGREES THAT THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT
AND THAT THE BANK WOULD NOT EXTEND CREDIT TO THE BORROWER IF THE WAIVERS SET
FORTH IN THIS SECTION WERE NOT A PART OF THIS AGREEMENT. BORROWER IRREVOCABLY
APPOINTS EACH AND EVERY OFFICER OF BORROWER (NOTWITHSTANDING THE PROVISIONS OF
SECTION 9.2), AS ITS ATTORNEYS UPON WHOM MAY BE SERVED BY REGULAR OR CERTIFIED
MAIL AT THE ADDRESS SET FORTH IN SECTION 9.2 HEREOF, ANY NOTICE, PROCESS OR
PLEADING IN ANY ACTION OR PROCEEDING AGAINST IT ARISING OUT OF OR CONNECTION
WITH THIS AGREEMENT.

                  9.9 Governing Law. This Agreement shall be construed in
accordance with and governed by the internal laws of the State of Illinois.

                  9.10 Integration. This Agreement and the other Loan Documents
constitute the sole agreement of the parties with respect to the subject matter
hereof and thereof and supersede all oral negotiations and prior writings with
respect to the subject matter hereof and thereof.

                  9.11 Amendment and Waiver. No amendment of this Agreement, and
no waiver of any one or more of the provisions hereof shall be effective unless
set forth in writing and signed by the parties hereto.

                  9.12 Successors and Assigns.

                      (a) Generally. This Agreement (i) shall be binding upon
the Borrower and upon the Bank, and the respective successors and assigns of
each, and (ii) shall inure to the benefit of the Borrower and the Bank, and the
respective successors and assigns of each, provided, however, that neither the
Borrower nor the Bank may assign its rights hereunder or any interest herein
without the prior written consent of the other party, and any such assignment or
attempted assignment shall be void and of no effect. For the avoidance of doubt,
the Bank hereby consents to the Domestication.

                                       26
<PAGE>

                      (b) Participations. The Bank may from time to time sell or
otherwise grant participations in the Loans and the Note, and the holder of any
such participation, if the participation agreement so provides, (i) shall, with
respect to its participation, be entitled to all of the rights of the Bank and
(ii) may exercise any and all rights of setoff or banker's lien with respect
thereto, in each case as fully as though the Borrower were directly indebted to
the holder of such participation in the amount of such participation. The Bank
may disclose to prospective participants such information regarding the
Borrower's affairs as the Bank possesses. The Bank shall give notice to the
Borrower of the grant of such participations; however, the failure to give such
notice shall not affect any of the Bank's rights hereunder.

                  9.13 Severability of Provisions. Any provision in this
Agreement that is held to be inoperative, unenforceable, voidable, or invalid in
any jurisdiction shall, as to that jurisdiction, be ineffective, unenforceable,
void or invalid without affecting the remaining provisions, and to this end, the
provisions of this Agreement are declared to be severable.

                  9.14 JURY WAIVER. BORROWER AND BANK HEREBY IRREVOCABLY AND
KNOWINGLY WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING (INCLUDING, WITHOUT LIMITATION, ANY
COUNTERCLAIM) ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS
OR TRANSACTIONS RELATED HERETO OR THERETO, INCLUDING WITHOUT LIMITATION, ANY
ACTION OR PROCEEDING (A) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY OTHER AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR (B)
ARISING FROM ANY DISPUTE OR CONTROVERSY IN CONNECTION WITH OR RELATED TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. BANK AND BORROWER AGREE THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE COURT AND NOT A JURY.

                  9.15 Indemnification.

                      (a) If, after receipt of any payment of all or any part of
the Obligations, the Bank is compelled to surrender such payment to any Person
or entity for any reason (including, without limitation, a determination that
such payment is void or voidable as a preference or fraudulent conveyance, an
impermissible setoff, or a diversion of trust funds), then this Agreement and
the other Loan Documents shall continue in full force and effect, and the
Borrower shall be liable for, and shall indemnify, defend and hold harmless the
Bank with respect to the full amount so surrendered.

                      (b) The Borrower shall indemnify, defend and hold harmless
the Bank with respect to any and all claims, expenses, demands, losses, costs,
fines or liabilities of any kind, including reasonable attorneys' fees and
costs, arising from or in any way related to (i) acts or conduct of the Borrower
under, pursuant to or related to this Agreement and the other Loan Documents,
(ii) the Borrower's breach or violation of any representation, warranty,
covenant or undertaking contained in this Agreement or the other Loan Documents,
and (iii) the Borrower's failure to comply with any or all laws, statutes,
ordinances, governmental rules, regulations or standards, whether federal,
state, or local, or court or administrative orders or decrees, including without
limitation those resulting from any Hazardous Materials or dangerous
environmental condition within, on, from, related to or affecting any real
property owned or occupied by the Borrower, unless resulting from the acts or
conduct of the Bank constituting gross negligence or willful misconduct.

                                       27
<PAGE>

                      (c) The provisions of this section shall survive the
termination of this Agreement and the other Loan Documents and shall be and
remain effective, notwithstanding the payment of the Obligations, the
cancellation of the Note, the release of any Encumbrance securing the
Obligations or any other action which the Bank may have taken in reliance upon
its receipt of such payment. Any cancellation of the Note, release of any
Encumbrance or other such action shall be deemed to have been conditioned upon
any payment of the Obligations having become final and irrevocable.

                  9.16 Patriot Act Notice. To help fight the funding of
terrorism and money laundering activities, Federal law requires all financial
institutions to obtain, verify, and record information that identifies each
person who opens an account. For purposes of this section, account shall be
understood to include loan accounts. The Borrower certifies that it is not
identified in any list of known or suspected terrorists published by any United
States government agency, nor is the Borrower an "enemy" or an "ally of the
enemy" within the meaning of Section 2 of the Trading with the Enemy Act (50
U.S.C. App. ss.ss. 1 et seq.), as amended.

                                       28
<PAGE>

                  IN WITNESS WHEREOF, the undersigned have caused this Loan
Agreement to be executed by their duly authorized officers on the date first
above written.

                                   FUEL TECH, INC., a Massachusetts corporation

                                   By:
                                            ------------------------------------
                                   Name:
                                            ------------------------------------
                                   Title:
                                            ------------------------------------

                                   WACHOVIA BANK, NATIONAL ASSOCIATION

                                   By:
                                          --------------------------------------
                                   Name:  Eric M. Del Viscio
                                   Title: Vice President

                                       29
<PAGE>

                                  SCHEDULE 3.6

                                   Guaranties

None

<PAGE>

                                  SCHEDULE 6.1

                                  Subsidiaries

1. Fuel Tech Holdings N.V. (Netherlands Antilles)

2. Fuel Tech Targeted Injection Chemicals, Ltd. (Canada)

3. Fuel Tech Jamaica Limited (Jamaica)

4. Fuel Tech Srl (Italy)

5. Fuel Tech B.V. (Netherlands)

6. Fuel Tech GmbH (Germany)

<PAGE>

                                  SCHEDULE 6.2

                                  Indebtedness

None

<PAGE>

                                  SCHEDULE 6.3

                                  Encumbrances

Transactions With Affiliates

1.       Fuel Tech, Inc. has advances to employees outstanding in the amount of
         $79,010 at June, 30, 2006.

2.       Fuel Tech, Inc. has an intercompany loan agreement with Fuel Tech Srl.
         The outstanding balance due to Fuel Tech, Inc. is 214,000 Euro at June
         30, 2006.

<PAGE>

                                   EXHIBIT "A"
                               NOTICE OF BORROWING

Wachovia Bank, National Association
2240 Butler Pike
Plymouth Meeting, PA 19462
Fax: (610) 941-3149
Attn:

Gentlemen and Ladies:

         The undersigned, FUEL TECH, INC., (the "BORROWER") refer to the Loan
Agreement, dated as of July __, 2006 among the Borrower and Wachovia Bank,
National Association (the "Bank") (as amended, modified and/or extended the
"Loan Agreement"), the terms defined therein being used herein as therein
defined, and hereby:

         [1. Gives you notice, irrevocably, pursuant to the Loan Agreement, that
the Borrower hereby requests a Revolving Credit Loan under the Loan Agreement
and, set forth below the information relating to such Revolving Credit Loan (the
"Proposed Advance") as required under the Loan Agreement:

            (a)  the requested Business Day of the Proposed Advance is
                 _________, ____;

            (b)  the aggregate amount of the Proposed Advance is $_____________;

            (c)  the Proposed Advance should accrue interest as follows:
                 $__________ LIBOR-Based Rate, and/or $______________ Variable
                 Rate;

            (d)  if any portion the Proposed Advance is intended to be a
                 LIBOR-Based Loan, the Interest Period therefor shall be ___
                 month,

            (e)  after this request, the Bank would not administer concurrently
                 more than three LIBOR-Based Loans]

                                       or

         [2. Gives you notice, irrevocably, pursuant to the Loan Agreement, that
the Borrowers hereby requests to continue or convert the interest rate accruing
on certain Revolving Credit Loans under the Loan Agreement and, set forth below
the information relating to such Revolving Credit Loans (the "Portion") as
required under the Loan Agreement:

            (a)  the amount to be converted or continued is
                 $___________________;

            (b)  the Proposed Advance should accrue interest as follows:
                 $______________ at the LIBOR-Based Rate, and/or $_________ at
                 the Variable Rate;

                                      A-1
<PAGE>

            (c)  if any Portion is intended to be an LIBOR Rate Loan the
                 Interest Period therefor shall be ___ month;

            (d)  after this request, the Bank would not administer concurrently
                 more than three LIBOR-Based Loans]

         3. Confirms as follows, both as of the date hereof and as of the date
of the Proposed Advance or Portion: (a) the representations and warranties of
the Borrower contained in Article IV of the Loan Agreement are and shall be
correct on and as of each such date, except that the representation and
warranties in Section 3.4 shall refer to the financial statements most recently
supplied to the Bank pursuant to Section 5.2 of the Loan Agreement; (b) no
Default or Event of Default has occurred and is continuing; (c) no material
adverse change has occurred in the financial condition of the Borrower since the
Closing Date.

Dated: ________________, ______          Very truly yours,

                                         FUEL TECH, INC.

                                         By:
                                              ----------------------------------
                                         Title:
                                               ---------------------------------

                                      A-2
<PAGE>

                                   EXHIBIT "B"

                             COMPLIANCE CERTIFICATE

Wachovia Bank, National Association
2240 Butler Pike
Plymouth Meeting, PA 19462
Fax: (610) 941-3149

Attn:  Patrick Kaufmann

Ladies and Gentlemen:

         This Compliance Certificate ("Compliance Certificate") is executed and
delivered pursuant to Section 5.2(c) of the Loan Agreement, dated as of July __,
2006 (the "Loan Agreement"), by and among FUEL TECH, INC., (the "Borrower") and
Wachovia Bank, National Association (the "Bank"). All capitalized terms used
herein without definition shall have the meanings given to them in the Loan
Agreement.

         3. Attached hereto are: [the financial statements required by Section
5.2(a) of the Loan Agreement; [or] [the financial statements required by Section
5.2(b) and 5.2(c) of the Loan Agreement.

         4. The undersigned has reviewed the terms of the Loan Agreement and has
made, or caused to be made under his supervision, a review in reasonable detail
of the transactions and financial condition of the Borrowers during the fiscal
period covered by this Compliance Certificate.

         5. As of the Certificate Date, the following financial covenants had
the values listed herein:

                                                COVENANT           ACTUAL

(a) Total Funded Debt to EBITDA
                                              ------------       -------------

(b) Minimum Fixed Charge Coverage
                                              ------------       -------------

         6. Attached hereto as Schedule I are the calculations and information
necessary to determine the foregoing covenant values.

         7. As of the date hereof: (a) no Default or Event of Default has
occurred and is continuing under the Loan Agreement; (b) the representations and
warranties of the Borrower contained in Article III (other than Section 3.7) of
the Loan Agreement are true and correct in all material respects as of the date
hereof, except that the representations and warranties in Section 3.4 shall
refer to the financial statements most recently supplied to the Bank pursuant to
Section 5.2 of the Loan Agreement and the representation and warranty in Section
3.14 shall be true and correct only as of the date of the Loan Agreement; and
(c) no material adverse change has occurred in the financial condition of the
Borrower since the date of the most recent Financial Statements supplied to the
Bank pursuant to Section 5.2 of the Loan Agreement.
<PAGE>

         8. [As a result of appointments and/or elections, the Board of
Directors and officers of the Borrower are as follows: _________________________
______________________________________________________].

         This Compliance Certificate is executed on _____________, by the Chief
Financial Officer of the Borrower. The undersigned hereby certifies that each
and every matter contained herein is derived from the Borrower's books and
records and is, to the best knowledge of the undersigned, true and correct.

                                 FUEL TECH, INC.

                                 By:
                                         ---------------------------------------
                                 Title:  Chief Financial Officer
                                         ---------------------------------------

<PAGE>

                                  EXHIBIT "C"

                                 FUEL-TECH N.V.
                             CASH INVESTMENT POLICY

             [FUEL TECH TECHNOLOGY FOR A RENEWED ENVIRONMENT LOGO]

                                                                          Page 1

<PAGE>

             [FUEL TECH TECHNOLOGY FOR A RENEWED ENVIRONMENT LOGO]

                               TABLE OF CONTENTS

CASH INVESTMENT POLICY                                                        3
  OVERVIEW                                                                    3
  ADOPTION                                                                    3
  SCOPE                                                                       3

  INVESTMENT OBJECTIVES                                                       3
    Preservation of Capital                                                   3
    Maintain Liquidity                                                        3
    Maximize Return                                                           4
    Specific Obligations and Future Needs                                     4

  AUTHORIZED INVESTMENTS AND ALLOWABLE CREDIT RATING                          4

  INVESTMENT ALLOCATION                                                       5

  AUTHORIZED BROKER DEALERS and QUALIFICATIONS                                5

  MONITORING OF OBJECTIVES AND RESULTS                                        5

  ADDENDUM A - AUTHORIZED INVESTMENT PERSONNEL                                6

  ADDENDUM B - AUTHORIZED INVESTMENT BROKERS and DEALERS                      7

                                                                          Page 2
<PAGE>

             [FUEL TECH TECHNOLOGY FOR A RENEWED ENVIRONMENT LOGO]

                             CASH INVESTMENT POLICY

OVERVIEW

Fuel-Tech NV {FTNV} recognizes that due to the nature of its operating Business
Segments, excess cash reserves will arise from time to time. Cash reserves are
defined as the balance of funds available after having given consideration to 1)
the amount of funds necessary to meet the operating liquidity needs of the
business, and 2) those funds required for specific legal, contractual or
long-term investment requirements.

The remainder of this document defines the details of the Cash Investment Policy
(the Policy) as follows: Adoption, Scope, Investment Objectives, Authorized
Investments and Allowable Credit Rating, investment Allocation, Authorized
Broker/Dealers, Monitoring of Objectives and Reporting. Again, this Policy will
exclude all specifically identified Cash requirements for any specific legal,
contractual or long-term investment requirements,

ADOPTION

It is the responsibility of the Board of Directors to adopt the Policy as
written and to approve all subsequent changes to the Policy. This Policy will be
reviewed on a recurring basis as defined further below based on input from
FTNV's Chief Financial Officer, its investment advisors and or by other
qualified, approved, and authorized FTNV Finance personnel.

SCOPE

This Policy applies to FTNV and its consolidated subsidiaries, and to all
personnel authorized to engage in cash investment transaction as defined in this
Policy {Addendum A).

INVESTMENT OBJECTIVES

The primary objectives of the Policy are to provide safety and liquidity for
excess cash balances, and only after these requirements are clearly met, to seek
optimum yields. Below, the key financial objectives of the FTNV cash investment
portfolio are defined:

Preservation of Capital

Preserve the principal value of the investment. FTNV shall consider the safety
of its capital as the primary objective in investment activities. Each
investment transaction shall seek to first ensure that capital losses are
avoided, whether they are from security default or the erosion of market value.

Maintain Liquidity

Maintain an investment portfolio that provides access to the cash or cash
equivalents necessary to meet the immediate short-term operating needs of FTNV.
Liquidity needs shall be anticipated by matching investment maturities with
forecasted cash flow requirements and by investing in securities with active
secondary markets.

                                                                          Page 3

<PAGE>

             [FUEL TECH TECHNOLOGY FOR A RENEWED ENVIRONMENT LOGO]

Maximize Return

Attain the maximum return on the investment portfolio (net of investment
management fees if applicable) consistent with the investment objectives set
forth in this Investment Policy. The financial return objective will be reviewed
by FTNV's Chief Financial Officer on a recurring basis.

Specific Obligations and Future Needs

Address and provide for any specific legal, contractual or long-term investment
requirements of FTNV and its subsidiaries.

AUTHORIZED INVESTMENTS AND ALLOWABLE CREDIT RATING

To achieve FTNV investment objective, all excess cash balances shall be invested
in the following securities:

<TABLE>
<S>                                            <C>                                         <C>
-----------------------------------------------------------------------------------------------------------------------------------
      Security                                 Mimimum Allowable Credit Rating              Maximum Duration/Maturity
-----------------------------------------------------------------------------------------------------------------------------------
Direct obligations of the U.S.                              N/A                                      1 Year
Treasury, including Bills, Notes and
Bonds
-----------------------------------------------------------------------------------------------------------------------------------
Federal Agency and Government                               N/A                                      1 Year
Sponsored Entity Securities e.g.
FNMA, GNMA, FHLB, Freddie Mac
-----------------------------------------------------------------------------------------------------------------------------------
Corporate Obligations, including               Rated A1 by Standard and Poors,                       1 Year
Commercial Paper, Bonds and Notes                 Rated P1 by Moody's or
as issued by either domestic or                Rated AAA by Standard & Poors,
foreign entitles                                     Rated Aaa Moody's
-----------------------------------------------------------------------------------------------------------------------------------
Municipal Notes and Bonds                      Rated SP1 by Standard and Poors,                      1 Year
                                                  Rated MIG1 by Moody's
-----------------------------------------------------------------------------------------------------------------------------------
Auction Rate Securities                        Rated AAA by Standard and Poors,                      1 Year
                                                       Rated Aaa Moody's
-----------------------------------------------------------------------------------------------------------------------------------
Money Market Mutual Funds                      Rated AAA by Standard and Poors,                      1 Year
                                                       Rated Aaa Moody's
-----------------------------------------------------------------------------------------------------------------------------------
Money Market instruments, including            Rated AAA by Standard and Poors,                      1 Year
Certificates of Deposits, Banker's                     Rated Aaa Moody's
Acceptances, Bank Time Deposits,
Repurchase Agreements
-----------------------------------------------------------------------------------------------------------------------------------
Asset-Backed Securities                        Rated AAA by Standard & Poors,                        1 Year
                                                       Rated Aaa Moody's
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
All investments will be denominated in United States dollars or in the
functional currency of FTNV subsidiaries.

                                                                          Page 4

<PAGE>

             [FUEL TECH TECHNOLOGY FOR A RENEWED ENVIRONMENT LOGO]

INVESTMENT ALLOCATION

To achieve FTNV's investment objective, all excess cash balances shall be
divided into two separate pools. The pools shall be identified as the Current
investment Pool and the Intermediate-Term investment Pool. The investment time
frame for the Current investment Pool is zero to three months while the time
frame for the Intermediate-Term Investment Pool is four to twelve months.

The purpose of the Current Pool is to provide immediate cash flow to
support the FTNV's operations in the near-term. The percentage of total cash
assets in the Current Pool will be determined by the forecasted cash
requirements of FTNV's operating business segments and an analysis of available
investments and their respective returns.

The purpose of the Intermediate Pool is to invest available cash that is not
required in the near term, but rather, will need to be made available on a
longer term basis. The percentage of total cash assets in the Current Pool will
be determined by the forecasted cash requirements of FTNV's operating business
segments and an analysis of available investments and their respective returns.

AUTHORIZED BROKER DEALERS and QUALIFICATIONS

Listed in Addendum B below are the firms in which FTNV's authorized investment
personnel can invest the available cash reserves. All authorized investment
firms must maintain a net worth of not less than $1 billion and they must be
members in good standing of the Securities Investor Protection Corporation
(SPIC).

MONITORING OF OBJECTIVES AND RESULTS

ALL objectives in this Policy are in effect until modifications are recommended
by the Chief Financial Officer and approved by the FTNV Board of Directors. The
objectives should be reviewed on an annual basis for their continued
appropriateness, or more often if the need arises.

It is the responsibility of FTNV's authorized investment personnel or authorized
broker dealers to advise the Chief Financial Officer if, at any time, any
specific guideline in this Policy inhibits the achievement of any of the stated
objectives.

All investment decisions are to be made with the approval of the Chief
Financial Officer and two signatures from FTNV's list of authorized investment
personnel must evidence the investment transaction. Further, subsequent to
submission of the investment request to the authorized broker-dealer, the
authorized broker dealer must confirm the transaction with Chief Financial
Officer, or another member of FTNV's authorized investment personnel via e-mail
or phone call. There will be no exceptions to the investment Policy without
prior approval from the Board of Directors.

On a monthly basis, a report summarizing the assets held in the investment
portfolio, and all prior month investment activity, will be provided to the
Chief Financial Officer by the authorized investment personnel listed in
Addendum A.

                                                                          Page 5

<PAGE>

             [FUEL TECH TECHNOLOGY FOR A RENEWED ENVIRONMENT LOGO]

ADDENDUM A - AUTHORIZED INVESTMENT PERSONNEL

The following named officers and finance personnel of FTNV, are authorized, for
and on behalf of the FTNV, to establish and maintain one or more accounts with
the approved investment brokers and dealers set forth in Addendum B for the
purpose of buying and selling approved securities described in the investment
Poiicy. All investment decisions and all new accounts are to be authorized by
the Chief Financial Officer:

-----------------------------------------------------------------------
Name                                Title
-----------------------------------------------------------------------
Vincent J. Arnone                   Chief Financial Officer
-----------------------------------------------------------------------
John J. Culligan                    Direct of Financial Reporting and
                                    Compliance
-----------------------------------------------------------------------
Ellen T. Albrecht                   Controller
-----------------------------------------------------------------------

                                                                          Page 6
<PAGE>

             [FUEL TECH TECHNOLOGY FOR A RENEWED ENVIRONMENT LOGO]

ADDENDUM B - AUTHORIZED INVESTMENT BROKERS and DEALERS

The following companies have been approved by the Board of Directors as
companies with whom approved officers and finance personnel may establish and
maintain accounts for the purposes of buying and selling the approved securities
described in the investment policy. Additions to the list will be approved at
quarterly Board meetings. Preference will be given to those firms which are
approved depositories for FTNV. Deletions from the list do not need Board
approval.

                       -----------------------------------
                               BROKER DEALER NAME
                       -----------------------------------
                       Bank of America
                       -----------------------------------
                       Wachovia Securities
                       -----------------------------------

                                                                          Page 7<PAGE>

Exhibit 10.2

                              REVOLVING CREDIT NOTE

$25,000,000.00                                                 July 31, 2006
                                                               Chicago, Illinois

         FOR VALUE RECEIVED, the undersigned, FUEL TECH, INC., a Massachusetts
corporation (the "BORROWER") hereby promises to pay to the order of WACHOVIA
BANK, NATIONAL ASSOCIATION, a national banking association ("LENDER") at its
office at 2240 Butler Pike, Plymouth Meeting, Pennsylvania 19462 or at such
other place as the holder hereof may designate in writing, in lawful money of
the United States of America, the principal sum of Twenty Five Million and
No/100 Dollars ($25,000,000.00), or such lesser principal sum as may then be
owed by the Borrower to the Lender hereunder, on or before the Revolving Credit
Termination Date, as defined in the Loan Agreement referenced herein (the
"STATED MATURITY DATE").

         THE INDEBTEDNESS EVIDENCED HEREBY SHALL BECOME IMMEDIATELY DUE AND
PAYABLE UPON THE EARLIEST TO OCCUR OF (X) THE STATED MATURITY DATE; (Y) THE
ACCELERATION OF THE OBLIGATIONS (AS DEFINED IN THE LOAN AGREEMENT OF EVEN DATE
HEREWITH AMONG THE BORROWER AND THE LENDER (AS AMENDED OR MODIFIED FROM TIME TO
TIME, THE "LOAN AGREEMENT")) PURSUANT TO SECTION 8.1 OF THE LOAN AGREEMENT; AND
(Z) THE TERMINATION OF THE LOAN AGREEMENT (WHETHER BY PREPAYMENT OR OTHERWISE)
IN ACCORDANCE WITH ITS TERMS. Capitalized terms used but not defined herein
shall have the meanings ascribed to such terms in the Loan Agreement.

         This Revolving Credit Note shall bear interest on the unpaid principal
amount hereof from time to time outstanding from the date hereof until the
Stated Maturity Date, or until maturity due to acceleration or otherwise and,
after maturity, until paid, at the rates per annum and upon the terms specified
in the Loan Agreement. Accrued interest on the Revolving Credit Loans (as
defined in the Loan Agreement) shall be due and payable and shall be made by the
Borrower to the Lender in accordance with Section 2.2 of the Loan Agreement.
Interest payments on such Revolving Credit Loans shall be computed using the
interest rate then in effect pursuant to the Loan Agreement and based on the
outstanding principal balance of the Revolving Credit Loans. Upon maturity, the
outstanding principal balance of the Revolving Credit Loans shall be immediately
due and payable, together with any remaining accrued interest thereon.

         All payments on account of indebtedness evidenced by this Revolving
Credit Note shall be first applied to interest on the unpaid balance and the
remainder to principal, unless otherwise specified in the Loan Agreement.
Payments of both principal and interest hereunder are to be made in same day or
immediately available funds.

         This Revolving Credit Note is the Revolving Credit Note referred to in
the Loan Agreement, and is subject to all of the terms and conditions of the
Loan Agreement, as such Loan Agreement may from time to time be amended,
supplemented, or modified, which terms and conditions are hereby made a part of
this Revolving Credit Note to the same extent and with the same force and effect
as if they were fully set forth herein.

<PAGE>

         Upon the occurrence and during the existence of any Event of Default
(as such term is defined in the Loan Agreement), including the failure to pay
any principal, interest and/or fees in accordance with the terms set forth in
the Loan Agreement, which shall constitute an Event of Default under this
Revolving Credit Note, the Lender shall be entitled, at its sole option, to
accelerate the then outstanding indebtedness hereunder and take such other
action as may be provided for in the Loan Agreement or otherwise by law.

         The remedies of the holder hereof as provided in this Revolving Credit
Note, in the Loan Agreement, and in any other Loan Documents (as defined in the
Loan Agreement) shall be cumulative and concurrent, and may be pursued singly,
successively, or together against the Borrower, and/or against any collateral or
guarantor, at the sole discretion of the holder hereof.

         The Borrower hereby waives presentment for payment, demand, notice of
nonpayment, notice of dishonor, protest of any dishonor, notice of protest, and
protest of this Revolving Credit Note and all other notices in connection with
the delivery, acceptance, performance, default, or enforcement of the payment of
this Revolving Credit Note, and agrees that its liability shall be unconditional
without regard to the liability of any other party or person and shall not in
any manner be affected by any indulgence, extension of time, renewal, waiver or
modification granted or consented to by the holder hereof; and the Borrower
agrees that additional makers, endorsers, guarantors, or sureties may become
parties hereto without notice to the Borrower or affecting the Borrower's
liability hereunder.

         It being the intent of the Lender and the Borrower that the rate of
interest and all other charges to the Borrower be lawful, if for any reason the
payment of a portion of the interest or other charges otherwise required to be
paid under this Revolving Credit Note would exceed the limit which the Lender
may lawfully charge the Borrower, then the obligation to pay interest or other
charges shall automatically be reduced to such limit and, if any amounts in
excess of such limit shall have been paid, then such amounts shall at the option
of the Lender either be refunded to the Borrower or credited to the principal
amount of this Revolving Credit Note so that under no circumstances shall the
interest or other charges required to be paid by the Borrower hereunder exceed
the maximum rate allowed by law.

         The holder hereof shall not by any act of omission or commission be
deemed to waive any of its rights or remedies hereunder unless such waiver be in
writing and signed by the holder hereof (and then only to the extent
specifically set forth therein). A waiver of any one event shall not be
construed as continuing or as a bar to or waiver of such right or remedy on a
subsequent event.

         Whenever possible, each provision of this Revolving Credit Note and the
Loan Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Revolving Credit Note or the
Loan Agreement shall be prohibited or invalid under such law, such provision
shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions of this Revolving Credit
Note or the Loan Agreement.

         This Revolving Credit Note shall not be amended, supplemented or
modified except pursuant to a writing signed by both Lender and Borrower.

                                       2
<PAGE>

         Without limiting the expansiveness of any similar provision contained
in the Loan Agreement, if at any time or times, Lender: (a) employs counsel in
good faith for advice or other representation (i) with respect to this Revolving
Credit Note, the Loan Agreement, any of the other Loan Documents, (ii) to
represent Lender in any restructuring, workout, litigation, contest, dispute,
suit or proceeding or to commence, defend or intervene or to take any other
action in or with respect to any litigation, contest, dispute or proceeding
(whether instituted by Lender, Borrower or any other person or entity) in any
way or respect relating to this Revolving Credit Note, the Loan Agreement, any
of the other Loan Documents, or Borrower's affairs, or (iii) to enforce any
rights of Lender against Borrower; and/or (b) attempts to or enforces any of
Lender's rights and remedies against Borrower; the costs and expenses incurred
by Lender in any manner or way with respect to the foregoing shall be part of
the indebtedness evidenced by this Revolving Credit Note, payable by Borrower to
Lender on demand. Without limiting the generality of the foregoing, such
expenses and costs include: court costs, reasonable attorneys' fees and
expenses, and accountants' fees and expenses.

         This Revolving Credit Note shall inure to the benefit of Lender and its
permitted successors and assigns and shall be binding upon the Borrower and its
permitted successors and assigns. As used herein the term "Lender" shall mean
and include the successors and assigns of the identified payee and the holder or
holders of this Revolving Credit Note from time to time.

         THIS REVOLVING CREDIT NOTE SHALL BE CONSTRUED IN ALL RESPECTS IN
ACCORDANCE WITH, AND ENFORCED AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
ILLINOIS, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.

         THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY:

         (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS REVOLVING CREDIT NOTE, OR FOR RECOGNITION AND
ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL
JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS, THE COURTS OF THE UNITED
STATES OF AMERICA FOR THE NORTHERN DISTRICT OF ILLINOIS AND APPELLATE COURTS
FROM ANY THEREOF. NOTWITHSTANDING THE FOREGOING, THE LENDER IN ITS ABSOLUTE
DISCRETION MAY ALSO INITIATE PROCEEDINGS IN THE COURTS OF ANY OTHER JURISDICTION
WHICH HAS SUBJECT MATTER JURISDICTION;

         (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH
COURTS AND WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW IN CONNECTION WITH ANY
SUCH ACTION OR PROCEEDING (i) ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION
OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR
CLAIM THE SAME, (ii) THE RIGHT TO ASSERT OR IMPOSE ANY CLAIM, NONCOMPULSORY
SET-OFF, COUNTERCLAIM OR CROSS-CLAIM IN RESPECT THEREOF IN SUCH PROCEEDING;
PROVIDED, HOWEVER, THIS WAIVER DOES NOT PRECLUDE THE RIGHT TO ASSERT A DEFENSE
IN SUCH ACTION OR PROCEEDING OR TO ASSERT OR IMPOSE ANY CLAIM, COUNTERCLAIM OR
CROSS-CLAIM WHICH THE BORROWER WISHES TO PURSUE IN A SEPARATE PROCEEDING AT ITS
SOLE COST AND EXPENSE, AND (iii) ALL STATUTES OF LIMITATIONS WHICH MAY BE
RELEVANT THERETO; AND

                                       3
<PAGE>

         (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY
BE EFFECTED BY MAILING A COPY THEREOF BY REGULAR OR CERTIFIED MAIL (OR ANY
SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, RETURN RECEIPT REQUESTED,
TO THE BORROWER AT ITS ADDRESS SET FORTH IN THE LOAN AGREEMENT OR AT SUCH OTHER
ADDRESS OF WHICH THE LENDER SHALL HAVE BEEN NOTIFIED PURSUANT THERETO. THE
BORROWER AGREES THAT SUCH SERVICE, TO THE FULLEST EXTENT PERMITTED BY LAW (i)
SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE BORROWER
IN ANY SUIT, ACTION OR PROCEEDING, AND (ii) SHALL BE TAKEN AND HELD TO BE VALID
PERSONAL SERVICE UPON AND PERSONAL DELIVERY TO THE BORROWER. SOLELY TO THE
EXTENT PROVIDED BY APPLICABLE LAW, SHOULD THE BORROWER, AFTER BEING SERVED, FAIL
TO APPEAR OR ANSWER TO ANY SUMMONS, COMPLAINT, PROCESS OR PAPERS SO SERVED
WITHIN THE NUMBER OF DAYS PRESCRIBED BY LAW AFTER THE DELIVERY OR MAILING
THEREOF, THE BORROWER SHALL BE DEEMED IN DEFAULT AND AN ORDER AND/OR JUDGMENT
MAY BE ENTERED BY THE COURT AGAINST THE BORROWER AS DEMANDED OR PRAYED FOR IN
SUCH SUMMONS, COMPLAINT, PROCESS OR PAPERS. NOTHING HEREIN SHALL AFFECT THE
LENDER'S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR LIMIT
THE LENDER'S RIGHT TO BRING PROCEEDINGS AGAINST THE BORROWER OR ITS PROPERTY IN
ANY COURT OR ANY OTHER JURISDICTION.

         THE BORROWER AND THE LENDER HEREBY IRREVOCABLY AND KNOWINGLY WAIVE TO
THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION
OR PROCEEDING (INCLUDING, WITHOUT LIMITATION, ANY COUNTERCLAIM) ARISING OUT OF
THIS REVOLVING CREDIT NOTE, THE LOAN AGREEMENT OR ANY OTHER AGREEMENTS OR
TRANSACTIONS RELATED HERETO OR THERETO, INCLUDING, WITHOUT LIMITATION, ANY
ACTION OR PROCEEDING (A) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN CONNECTION
WITH THIS REVOLVING CREDIT NOTE, THE LOAN AGREEMENT OR ANY INSTRUMENT, DOCUMENT
OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH, OR (B) ARISING FROM ANY DISPUTE OR CONTROVERSY IN CONNECTION WITH OR
RELATED TO THIS REVOLVING CREDIT NOTE AND THE LOAN AGREEMENT. THE LENDER AND THE
BORROWER AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT
AND NOT A JURY.

                            [Signature Page Follows]

                                       4
<PAGE>

Exhibit 10.2

         IN WITNESS WHEREOF, the Borrower has caused this Revolving Credit Note
to be duly executed by its authorized officer as of the date first above
written.

                                   FUEL TECH, INC., a Massachusetts corporation

                                   By:
                                        ----------------------------------------
                                   Its:
                                        ----------------------------------------

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